UAE Capital Markets Regulator Plans Investor Protection Fund As It Steps Up Safeguards

(MENAFN- Khaleej Times) The UAE's Capital Market Authority (CMA) is planning to establish an Investor Protection Fund and introduce new safeguards for exceptional market circumstances as part of efforts to strengthen investor confidence and broaden participation in the country's capital markets.

The proposed measures will also include improvements to complaints, appeals and amicable settlement procedures, Waleed Saeed Al Awadhi, chief executive of the CMA, told Khaleej Times in an interview.

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The regulator is also examining a framework for retail and fractional sukuk, which could allow residents to access fixed-income investments with smaller amounts of money.

“Protecting retail investors requires more than regulatory enforcement. It means ensuring investors have access to reliable information, understand the risks they are taking and have effective channels to raise concerns when things go wrong,” Al Awadhi said.

The CMA conducted 224 investor awareness activities during the first nine months of 2026, including five dedicated campaigns to improve financial literacy and help investors identify potential market risks.

It also registered 88 new financial influencers during the period, taking the total number of registered influencers to 198 by the end of September. The authority refunded approximately Dh1.2 billion to clients over the same period.

Enforcement and market supervision

Alongside investor education and compensation, the regulator is strengthening its oversight of market misconduct, including manipulation, insider trading, misleading financial disclosures and investment fraud.

Financial penalties imposed by the CMA reached Dh12.9 million during the first nine months of 2026, Al Awadhi said.

The authority uses a Unified Risk-Based Supervisory Framework to assess licensed firms across areas such as financial resilience, corporate governance, market conduct, regulatory compliance and operational effectiveness. The approach allows it to prioritise supervision according to risk and identify potential compliance concerns earlier.

“Our focus is on timely intervention, effective enforcement and holding those responsible for violations accountable. The objective is to deter misconduct and protect investors, rather than simply increase the number of penalties imposed,” he said.

The CMA did not disclose the number of investigations or individual enforcement actions undertaken during the period.

Three priorities for 2027

The authority has identified investor protection, broader market access and digital transformation as its three main priorities for 2027.

Beyond the proposed Investor Protection Fund and additional safeguards, it is progressing regulations covering systemically important entities, the division of public joint stock companies and instant licensing. Draft regulations are targeted for completion by the end of 2026.

On the technology front, the CMA is simplifying licensing and regulatory services while exploring the use of artificial intelligence to strengthen supervision, speed up processing and identify emerging risks earlier.

Family businesses and SMEs

The CMA is also working to create more opportunities for family-owned businesses and small and medium-sized enterprises (SMEs) to raise funds through the capital markets without compromising governance and disclosure standards.

It is developing resolutions to regulate private placements of securities by private joint stock companies and businesses operating in free zones. The proposed measures would broaden financing options for companies that may not yet be ready for a public listing, subject to final approval and implementation.

In 2027, the authority also plans to review regulations governing securities offerings and issuers, including foreign issuers, as well as the types and classes of securities that can be issued. The review is intended to identify ways to improve market access and accommodate different financing requirements.

"For family businesses and SMEs, the objective is to provide appropriate pathways to capital market financing while ensuring companies are prepared for the responsibilities of public ownership," Al Awadhi said.

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