CMA Decision No. 9/Chairman of 2022 · UAE Federal
Amending instrument that changes the Regulations Manual of the Financial Activities (Rulebook) (CMA Decision No. 13/Chairman of 2021). The CMA has consolidated its changes into the current text of the amended regulation and keeps this instrument in its archive of amending regulations.
Decision No. 9/R.M of 2022 is a broad amendment to the Regulations Manual of the Financial Activities (the Rulebook, Decision No. 13/Chairman of 2021), touching its glossary, enforcement powers, ownership limits for licensed firms, approved-job rules and client asset protections. Issued in Abu Dhabi on 7 March 2022 and published only in Arabic, it took effect the day after publication in the Official Gazette (Article 2); the Rulebook's consolidated notes record it in force from 1 April 2022.
Article 1 makes five sets of changes. First, it rewrites glossary definitions, renaming securities portfolio as investment portfolio, recasting the OTC derivatives and forex spot broker, the financial products dealer, financial consultancies (recommendation, analysis and planning), portfolio management (discretionary or non-discretionary) and foreign issuer. Second, it adds to Article 17 a fine of up to AED 100 thousand and a power to refer violators to the Public Prosecution. Third, in the licensing section, a licensed firm needs CMA approval before amending its memorandum or articles (public joint stock companies and foreign branches excepted) or merging, may not hold more than 5% of another licensed firm in the same category, needs approval to hold shares in a firm of another category, and, banks apart, may not hold more than 30% of an unlicensed company. One approved employee may cover several activities, and bank licensees may share the bank's compliance and risk officers. Fourth, in business conduct, client financial products must be registered in the client's own account, foreign securities held with a custodian and, if in the firm's client account, with a retail client's written consent; client accounts may not secure the firm's borrowing; records must be reconciled every 7 working days and differences corrected within 3. Fifth, it renames the second-category activity portfolio management and widens the legal forms allowed for general clearing.
Firms licensed by the Capital Market Authority under the Regulations Manual of the Financial Activities, their partners, directors, approved employees and clients, including brokers, dealers, financial consultants, portfolio and fund managers and general clearing members.
Arabic original text in 10 passages. Open the full text or jump to a provision:
| Article 1 (First) | Amends glossary definitions: investment portfolio replaces securities portfolio; redefines the OTC derivatives and forex spot broker, financial products dealer, financial consultancies, portfolio management and foreign issuer, which now includes issuers established in a financial free zone. |
| Article 1 (Second) | Adds paragraph (d) to Article 17(3) of Section One allowing a fine of up to AED 100 thousand, and amends Article 17(5) so the Authority may refer a violator to the Public Prosecution. |
| Article 1 (Third) | Licensed firms need prior approval to amend their memorandum or articles or to merge, may hold no more than 5% of a same-category licensee and, banks apart, no more than 30% of an unlicensed company. |
| Article 1 (Third) | One approved employee may serve several activities within a category, except broker representative; compliance officers may qualify with five years' experience and a listed certificate such as ICA or ACAMS; bank licensees may use the bank's compliance and risk officers. |
| Article 1 (Fourth) | Client financial products registered in the client's own account; foreign securities kept with a custodian, foreign or global custodian, with written consent from retail clients if held in the firm's client account; no borrowing secured on client accounts. |
| Article 1 (Fourth) | Client records reconciled with depository and custodian statements at least every 7 working days and differences corrected within 3 working days; client products frozen only under a court order, the AML law or market procedures. |
| Article 1 (Fifth) | Annex 1 licensing categories: renames securities portfolio management as portfolio management and allows a foreign general clearing company regulated by a similar authority to hold the third-category general clearing licence. |
| Article 2 | Published in the Official Gazette and in force from the day following publication. |
Adds to Article 17 of the Rulebook a fine of up to AED 100 thousand and confirms the Authority's right to refer a violator to the Public Prosecution.
Two parts of this amendment reach our corporate work directly. A CMA-licensed client now needs the regulator's approval before any change to its memorandum or articles or any merger, so we build that step into the timetable before filing with the licensing authority. And the 5% and 30% limits on licensed firms' shareholdings constrain group restructurings, which we check when designing holding structures. Polaris is not licensed by the CMA; we coordinate with the client's compliance adviser and keep corporate, UBO and AML records in order.
| Amends | CMA Decision No. 13/Chairman of 2021 |
“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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