CMA Circular No. 1/2024 of 2024 · UAE Federal
Warns licensed companies that contracting with individuals or unlicensed companies to solicit clients breaches the licensing rules for introducing activity, and that licensees must contract only with properly licensed firms after due diligence.
Circular No. 1 of 2024 tells companies licensed by the Securities and Commodities Authority (now the Capital Market Authority) that paying individuals or unlicensed companies to bring in clients is a clear breach of the regulations. Soliciting clients falls within the licensed "introducing" activity, so licensees may contract only with firms the Authority has licensed for introducing.
The Authority issued the circular after finding that some licensed entities had contracted with individuals or unlicensed companies to solicit clients for them. Because those services fall within the scope of the introducing licence, the arrangements violate the Authority's regulations and decisions. Licensed companies must therefore not contract with independent individuals or unlicensed companies to solicit clients, and must limit such contracts to companies licensed for introducing. The stated aim is that everyone involved in providing and introducing financial services, including contacting new clients, is competent to operate within the investor-protection framework.
The circular imposed three immediate requirements. First, each licensee had to send the Authority a list of the entities it had contracted to solicit clients, with copies of all current contracts, by email to Licensing@sca.ae within 5 working days of the circular's date. Second, it had to terminate any current contracts with individuals or unlicensed entities. Third, before entering any new client-acquisition contract, it must confirm that the counterparty holds a proper licence from the Authority and carry out due diligence.
Non-compliance may lead to legal accountability, including financial fines, suspension or cancellation of the licence, or other administrative penalties the Authority considers appropriate. The circular does not state its issue date on its face. The one-off reporting deadline has passed, but the prohibition on unlicensed introducers and the due diligence duty remain in force.
Companies licensed by the Securities and Commodities Authority (now the Capital Market Authority) that use third parties to solicit or introduce clients, and the individuals and unlicensed firms that would otherwise act as their introducers or affiliates.
English official text in 1 passages. Open the full text or jump to a provision:
| Paragraph 1 | Records that some licensed entities contracted with individuals or unlicensed companies to solicit clients, and that this is a clear violation because the service falls under the licence for introducing activity. |
| Paragraph 2 | Licensed companies must not contract with independent individuals or unlicensed companies to solicit clients, and must limit such contracts to companies licensed by the Authority for introducing activity. |
| Item 1 | Licensees had to send the Authority a list of entities contracted to solicit clients, with copies of all current contracts, to Licensing@sca.ae within 5 working days of the circular. |
| Item 2 | Licensees must terminate any current contracts with individuals or unlicensed entities for soliciting clients. |
| Item 3 | Before entering new client-acquisition contracts, licensees must ensure the counterparty holds a proper licence from the Authority and exercise due diligence. |
The circular warns that non-compliance may expose the licensed entity to legal accountability, including financial fines, suspension or cancellation of the licence, or other administrative penalties the Authority considers appropriate.
Polaris is not licensed by the CMA and does not introduce clients to regulated firms. The circular comes up when clients plan finance-related businesses or marketing partnerships: an individual or company paid to bring clients to a CMA-licensed firm needs its own introducing licence. When a client wants to earn referral fees from brokers or fund managers, we explain that this requires a licensed introducing entity, and we form and administer that company around the licensing route while the client's licensed adviser handles the application. We also review referral and affiliate agreements for this point.
No amendments, repeals or cross-references recorded for this instrument.
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
Regulations Manual of the Financial Activities (Rulebook)
Issues the Regulations Manual of the Financial Activities (the CMA rulebook): licensing categories and requirements for financial activities, approved jobs, business cond…
Regulatory Controls for Financial Activities and Services
Administrative resolution setting regulatory controls for licensed financial activities and services, with an attachment and bases for evaluation added by later amendment…
Capital Markets Law
Regulates the onshore capital market from 1 January 2026: financial activities subject to CMA licensing, capital market institutions, offering and listing of securities, …
Capital Market Authority Law
Constitutes the Capital Market Authority as legal successor to the Securities and Commodities Authority, sets its objectives, powers, board and executive structure, keeps…
Finfluencer Regulation
Regulates finfluencers who promote or recommend financial products: conditions and applications for authorisation, obligations of the finfluencer and of issuers and licen…
Whether you are establishing a new venture, restructuring an existing enterprise, or exploring residency pathways — we are here to advise.
Arrange a Consultation →