SCA
Definition
Securities and Commodities Authority — UAE federal markets regulator.
Also known as
- Securities and Commodities Authority
- UAE Securities Regulator
Attributes
| Type | Federal regulatory authority |
|---|---|
| Jurisdiction | United Arab Emirates |
| Established | 2000 |
| Governing law | Federal Law No. 4 of 2000 |
| Headquartered | Abu Dhabi, United Arab Emirates |
| Reports to | UAE Cabinet |
| Area served | Mainland UAE (excluding DIFC and ADGM) |
What it is
The Securities and Commodities Authority (SCA) is the UAE's federal regulator for securities, commodities, and derivatives markets. Established under Federal Law No. 4 of 2000, it supervises stock exchanges, clearing and settlement entities, securities brokers, investment funds, and crowdfunding platforms operating onshore in the UAE. The SCA issues licenses, sets disclosure standards, and enforces market conduct rules for public joint stock companies listed on the Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM). It also regulates commodity derivatives traded on the Dubai Gold & Commodities Exchange (DGCX). The SCA works alongside the Central Bank of the UAE and the Ministry of Economy to maintain market integrity and combat financial crime. Its mandate covers investor protection, market transparency, and systemic risk mitigation in non-financial free zone territories. Companies in the DIFC and ADGM fall under separate regulatory frameworks administered by the DFSA and ADGM FSRA respectively.
Key characteristics
- Legal basis
- Federal Law No. 4 of 2000 (as amended) establishes the SCA and its powers.
- Jurisdiction
- Federal onshore UAE; DIFC and ADGM are excluded from direct SCA oversight.
- Markets regulated
- ADX, DFM, DGCX, and over-the-counter securities and commodities activities.
- Key functions
- Licensing, rulemaking, market surveillance, enforcement, and investor protection.
- Governance
- Board of Directors appointed by federal decree; CEO manages daily operations.
- International alignment
- IOSCO member; applies international standards on disclosure and market abuse.
How it works
- The SCA issues regulations and circulars governing market participants, including brokers, fund managers, and crowdfunding operators.
- It reviews and approves prospectuses for public offerings and listings on UAE federal exchanges.
- It conducts inspections and investigations into licensed entities for compliance with anti-manipulation and disclosure rules.
- It imposes administrative sanctions, fines, or license suspensions for violations of securities laws.
- It cooperates with international regulators through IOSCO membership and bilateral agreements.
Examples
A Dubai-based asset management firm must obtain an SCA license to manage a UAE-domiciled investment fund marketed to retail investors. A public joint stock company seeking to list on the DFM must submit its prospectus to the SCA for approval before the initial public offering. A fintech platform offering equity crowdfunding to UAE residents must register with the SCA under its crowdfunding regulations issued in 2020.
Why it matters
Any business involved in capital raising, fund management, or securities trading onshore in the UAE must understand SCA requirements. Non-compliance can result in license revocation, trading suspensions, or criminal referral. The SCA's rules also affect foreign funds seeking to market to UAE investors, as private placement exemptions have strict conditions.
Common misconceptions
Misconception
The SCA regulates all financial services in the UAE including banks and insurance companies.
Reality
The Central Bank of the UAE regulates banks and insurers; the SCA focuses on securities, commodities, and derivatives markets.
Misconception
Companies in the DIFC and ADGM need SCA approval for their activities.
Reality
The DIFC and ADGM have their own regulators (DFSA and ADGM FSRA); SCA jurisdiction applies to onshore UAE.
Misconception
The SCA approves all investment products sold in the UAE.
Reality
The SCA approves securities offerings and licenses fund managers, but certain products may fall under Central Bank or free zone authority.
FAQs
- What is the difference between the SCA and the DFSA?
- The SCA is the federal regulator for onshore UAE securities markets. The DFSA regulates financial services within the Dubai International Financial Centre (DIFC), a common law free zone.
- Do I need an SCA license to operate a securities brokerage in mainland UAE?
- Yes. Any entity conducting brokerage, dealing, or fund management activities onshore must obtain the relevant SCA license category.
- Does the SCA regulate cryptocurrency trading in the UAE?
- Virtual assets in onshore UAE fall under the Securities and Commodities Authority or the Virtual Assets Regulatory Authority (VARA) in Dubai, depending on the activity and location.
- How does a company list on the Dubai Financial Market?
- The company must submit a listing application and prospectus to the SCA for approval, then apply to the DFM for admission to trading.
- Can a foreign fund manager market to UAE investors without SCA registration?
- Generally no. Marketing to UAE investors typically requires SCA registration or reliance on a licensed local promoter under strict private placement exemptions.
