CMA Decision No. 48/R of 2012 · UAE Federal
Board regulations on short selling of securities, now listed by the CMA among superseded regulations.
Board Decision No. 48 of 2012 was the Securities and Commodities Authority's (now the Capital Market Authority) rulebook for short selling on the UAE securities markets. Issued in Abu Dhabi on 12 August 2012 under Federal Law No. 4 of 2000, it took effect the day after publication in the Official Gazette (Article 13). The CMA now lists it among superseded regulations, so it is a historical reference only.
Article 1 defined short selling as an investor selling securities he does not own or selling borrowed securities. Article 2 permitted it only to a licensed market maker carrying on market making or in other cases the Authority approved. Under Article 3 the market chose the eligible securities, no security could be sold short until one month after listing, and rights issues and covered warrants were excluded. Article 4 let the Authority suspend short selling in exceptional conditions and required an automatic stop on the same and next business day when a security fell by 5% to 10% in one session.
Article 5 put the burden on the broker: confirm the client can deliver by settlement date, give no guarantee for borrowed securities, sell only above the last executed price and enter orders at a specific price. Article 6 required daily public disclosure of short-sold volumes and a report to the Authority on any investor whose short position in one security exceeded 0.25% of the free float. Article 8 let the market fine and charge compensation for failed deliveries and call the bank guarantee, with an appeal to the Authority within 30 days. Article 11 extended the rules to Sharia-compliant arrangements with the same effect, and Article 12 set the Authority's sanctions.
Licensed securities markets in the UAE, their brokers and market makers, and investors who sold securities short on those markets while the regulations were in force; it no longer governs new transactions.
English official text in 13 articles. Open the full text or jump to a provision:
| Article 2 | Short selling permitted only to a market maker carrying on market making and in other cases approved by the Authority. |
| Article 3 | The market designates eligible securities under Authority-approved standards; no short selling until one month after listing; excluded for securities subject to subscription rights in a capital increase and for covered warrants. |
| Article 4 | The Authority may suspend short selling in exceptional circumstances; it stops automatically on the same and next business day when a security falls between 5% and 10% in one trading day, the exact trigger set by the market. |
| Article 5 | Brokers must confirm the client can deliver by settlement date, may not guarantee borrowed securities, may sell short only above the last executed price and must enter short orders at a specific price. |
| Article 6 | Daily public disclosure of short-sold volumes, and daily notice to the Authority of any single investor whose short sales of one security exceed 0.25% of the securities available for trading. |
| Article 8 | The market fines and charges compensation for failed deliveries, calls the bank guarantee if unpaid, reports short selling weekly to the Authority; appeals lie to the Authority within 30 days. |
| Article 12 | On a proven violation the Authority may warn and order correction, fine up to the statutory maximum, or suspend the violator's short selling temporarily or permanently. |
Article 8 let the market fine a broker or market maker that failed to deliver short-sold securities, charge compensation and call its bank guarantee. Article 12 let the Authority warn the violator and order correction, impose a fine up to the maximum in the Law and its regulations, or suspend its short selling temporarily or permanently.
Short selling sits inside licensed brokerage and market-making activity, which Polaris does not carry on and is not licensed to carry on. These regulations matter to us only when we review the corporate and contractual history of a client group that held a broker or market-maker licence before the current rulebook, or when an older agreement still refers to them. We note that the CMA lists the decision as superseded, refer the client to its licensed compliance adviser for the current trading rules, and keep the corporate records, UBO filings and AML files of the entity in order.
| 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.
Former Market Makers Regulations
Board regulations on market makers, amended in 2014 and now listed by the CMA among superseded regulations.
Former Securities Lending and Borrowing Regulation
Board regulation on lending and borrowing of securities, amended in 2014 and 2015 and now listed by the CMA among superseded regulations.
Former SCA Law
Former federal law establishing the Emirates Securities and Commodities Authority and Market and regulating licensing, listing, trading and disclosure in the securities m…
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…
Former Trading, Clearing, Settlement and Custody Regulations
Board regulations on trading, clearing, settlement, transfer of ownership and custody of securities, amended many times and now listed by the CMA among superseded regulat…
Former Market Functioning Regulations
Board regulations on the functioning of the market, now listed by the CMA among superseded regulations.
Whether you are establishing a new venture, restructuring an existing enterprise, or exploring residency pathways — we are here to advise.
Arrange a Consultation →