First-step analysis: fintech regulation in United Arab Emirates


Financial regulation

Regulatory bodies

Which bodies regulate the provision of fintech products and services?

For banking and lending-related activities in onshore UAE, the financial services regulator is the UAE Central Bank, while for securities and capital markets-related matters, the UAE Securities and Commodities Authority (SCA) is the relevant regulator. Following the merger between the UAE Central Bank and the UAE Insurance Authority under Decretal Federal Law No. 25 of 2020, the UAE Central Bank is now also the Onshore UAE insurance sector regulator.  For all regulated financial activities in the Dubai International Financial Centre (DIFC), the regulator is the Dubai Financial Services Authority (DFSA). For all regulated financial activities in the Abu Dhabi Global Market (ADGM), the regulator is the Financial Services Regulatory Authority (FSRA).

Regulated activities

Which activities trigger a licensing requirement in your jurisdiction?

The onshore UAE regulatory regime is separate and different from the regulatory regime found in the DIFC and the ADGM. So, when considering the UAE, it is important to first ask which specific jurisdiction and financial regulatory regime is applicable.

As financial free zones, both the DIFC and the ADGM have their own common law-based commercial and civil legal and financial services regulatory frameworks, as well as their own dedicated courts. The DFSA is the financial services regulator for activities conducted in or from the DIFC and the FSRA regulates financial services activities in or from the ADGM. The relevant federal onshore UAE (ie, in the UAE but outside the DIFC and ADGM) financial regulators are the SCA and the UAE Central Bank. The UAE Central Bank is the prudential regulator for onshore UAE and mainly regulates activities relating to banking and lending activities such as:

  • deposit taking (including sweep deposit accounts);
  • foreign exchange trading;
  • guarantees and commitments;
  • payment services (including the issuance of payment instruments and other means of payments);
  • primary lending;
  • factoring;
  • invoice discounting;
  • arranging primary loans;
  • secondary market loan trading; and
  • secondary market loan intermediation.


Outside the banking and lending context, the UAE Central Bank was historically the sole financial services regulator for onshore UAE prior to the establishment of the SCA (in 2001) and the UAE Insurance Authority (IA) (in 2007). However, the IA has now been absorbed by the UAE Central Bank following a merger between the two institutions in 2020. There are therefore some other areas of financial activity that the UAE Central Bank continues to regulate – such as, among other things, currency brokerage, money exchange and some activities that would be typically associated with investment banking.

Generally, the types of regulated activities in onshore UAE, the DIFC and the ADGM include, among other things:

  • the marketing and sale of securities;
  • providing investment advice;
  • dealing in products and investments (either as principal or agent);
  • underwriting and placing financial products;
  • offering and providing discretionary investment management services;
  • marketing or selling funds (including the provision of investment advice);
  • accepting deposits;
  • providing credit;
  • providing money services;
  • arranging deals in investments;
  • managing assets;
  • managing a collective investment fund;
  • advising on financial products; and
  • insurance intermediation.


Securities and financial products that are regulated by the respective financial services regulators across onshore UAE, the DIFC and the ADGM include, but are not limited to, equity securities, debt securities, linked products, derivatives, structured products, deposits, notes and warrants.

Consumer lending

Is consumer lending regulated in your jurisdiction?

Yes. Article 65 of UAE Decretal Federal Law No. 14 of 2018 Regarding the Central Bank and Organisation of Financial Institutions and Activities provides that the UAE Central Bank will regulate, among other things, the activities of ‘providing credit facilities of all types’, ‘providing stored values services, electronic retail payments and digital money services’ and ‘providing virtual banking services’.

With regard to the provision and booking of these services ‘in or from’ either the DIFC or the ADGM, these activities are likely to be considered as ‘providing credit’, which will require a licence from either the DFSA or FSRA respectively. To the extent that these services are only ‘advised’ on or ‘arranged’ from the same jurisdictions, an appropriate licence would also be required from either the DFSA or FSRA. If these services are merely promoted (with no ‘advising’ or ‘arranging’) ‘in or from’ either financial free zone, unless an exemption applies, a Representative Office licence would be required from either the DFSA or the FSRA respectively.

In November 2020, the UAE Central Bank issued the Consumer Protection Regulations 2020 to ensure the protection of consumers’ interests in their use of any financial product, service or relationship with licensed financial institutions. This ensures that ensure that the licensed financial institutions’ approach to consumer protection is in line with international standards. Along with the objective of promoting a culture within licensed financial institutions of respecting and acting in the best interest of consumers, it specifically aims to protect consumers by defining the institutional obligations for the protection of consumers.

Secondary market loan trading

Are there restrictions on trading loans in the secondary market in your jurisdiction?

Secondary market loan trading is an activity regulated by the UAE Central Bank. It constitutes primary lending and is regulated whether or not the loan has been fully drawn. The trading of loans would also constitute a regulated financial services activity in the DIFC and the ADGM.

Collective investment schemes

Describe the regulatory regime for collective investment schemes and whether fintech companies providing alternative finance products or services would fall within its scope.

In onshore UAE, there is a general prohibition on marketing unregistered collective investment schemes (ie, funds) unless they have been registered with the SCA accordingly (either for private or public promotion). However, the onshore UAE marketing prohibition does not apply to the promotion of foreign funds to a non-natural ‘qualified investor’. A non-natural qualified investor is defined in the SCA rules and includes the federal government, among others.

There is a private placement regime under the SCA rules, where if the potential investor is a natural person, foreign funds can be registered for private placement by an SCA-licensed promoter subject to several conditions.

With regard to the DIFC, there is a prohibition on marketing unregistered funds in the DIFC except through a DFSA-licensed intermediary with the appropriate type of licence, unless an exemption applies. The prohibition on the offer or sale of a fund only applies where this activity is carried out ‘in or from’ the DIFC. It is not possible to reg
ister a foreign fund for distribution in the DIFC. Funds need only be registered with the DFSA if they are domiciled in the DIFC. There are currently relatively few funds domiciled in the DIFC and so most funds marketed in the DIFC are foreign (ie, non-DIFC-domiciled) and, therefore, unregistered. However, all funds and collective investment schemes promoted ‘in or from’ the DIFC need to meet a fund eligibility criteria.

Once a marketing entity holds the appropriate licence it may market foreign domiciled funds or DIFC-domiciled funds, provided it markets only to investors within the scope of its licence, and in the case of any foreign fund:

  • the fund qualifies as a ‘designated’ or ‘non-designated fund’;
  • the marketing entity has a reasonable basis for recommending a fund as suitable to a particular client; or
  • the fund offered discreetly to persons who are professional clients and the minimum subscription per investor is US$50,000.


Similar provisions exist with regard to the ADGM.

Following public consultation, with effect from 31 August 2017, the DFSA updated its rules to include ‘operating a crowdfunding platform’ as a regulated activity.

With regard to onshore UAE, while the UAE Central Bank is reported to be in the process of drafting regulations relevant to crowdfunding, no specific regulatory…


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