CMA Decision No. 25/R of 2008 · UAE Federal
Board regulation of margin trading by brokerage firms, amended several times and now listed by the CMA among superseded regulations.
Decision No. 25/R of 2008 regulated margin trading: a brokerage company financing part of a client's purchase of listed securities, secured on those securities. It was issued on 11 June 2008 and took effect three months after Official Gazette publication (Article 14). It was amended by Decisions No. 5 of 2011, No. 50 of 2012 and No. 3 of 2014. The CMA now lists it among superseded regulations, so it should be read as the historical framework behind older margin facility agreements; current margin financing is dealt with in the CMA's later regulations, including Decision No. 7/Chairman of 2026, which permits the Dubai Financial Market to finance investors' margin trading through its iVestor platform.
Under the 2008 rules, a broker needed a separate Authority licence to offer margin trading (Article 2), conditional on technical and administrative capacity, financial solvency, no material solvency or account-segregation breach in the previous six months and Authority-approved account opening and agreement forms (Article 3); the Authority decided within thirty days (Article 5). The broker had to open a separate margin account with the clearing house, keep it apart from the client's cash account, collect the initial margin before purchase, register the financed securities in the client's name, send monthly statements, review each account daily and give the client two working days to meet a margin call before selling (Article 6). Article 7 set an initial margin of at least 50% and a maintenance margin of at least 25% of market value, capped total margin lending at 300% of Tier 1 and Tier 2 capital, and limited any one client to 10% of that pool. Collateral was limited to the financed securities, with listed securities or bank guarantees accepted only in exceptional market falls or suspensions longer than seven working days (Article 10). Shari'a-compliant financing was permitted (Article 11).
Historically: brokerage companies licensed by the Authority that financed clients' purchases of listed securities on margin, their clients holding margin trading accounts, and the markets and clearing houses that monitored those accounts.
English official text in 14 articles. Open the full text or jump to a provision:
| Article 2 | A brokerage company needed an Authority licence under this decision before conducting margin trading. |
| Article 3 | Licence conditions: technical and administrative capability, financial solvency, no material solvency or segregation breach in the prior six months, and Authority-approved account and agreement forms setting out risks, margins, fees and default powers. |
| Article 6 | Broker duties: separate margin account at the clearing house, initial margin before purchase, securities registered in the client's name, monthly statements, daily review and a two-working-day margin call before forced sale. |
| Article 7 | Initial margin at least 50% and maintenance margin at least 25% of market value; total margin lending capped at 300% of Tier 1 and Tier 2 capital; single client limited to 10% of the pool. |
| Article 10 | Collateral limited to the financed securities, except listed securities or bank guarantees during continuing exceptional falls or suspensions over seven working days. |
| Article 12 | The Authority could suspend a broker's margin trading for exceeding the limits, gross solvency breaches or failure to meet licence conditions. |
Article 12 allowed the Authority to suspend a broker from margin trading for exceeding the prescribed percentages, gross breach of solvency criteria or failure to meet licence conditions. Article 13 applied the penalties in Federal Law No. 4 of 2000 and the regulations under it to other breaches.
Investment holding companies and family vehicles we administer sometimes hold margin facility agreements signed under these rules, and the 50% initial margin, 25% maintenance margin and two-day margin call explain how those agreements were drafted. We read this regulation when reviewing such documents or a historic forced sale. For a new facility we check the broker's current terms and the CMA's current rules, and prepare the board resolutions and pledge authorities the broker requires.
| Cites | Former SCA Law |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
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