INSITE - UAE- Jan 2026
- sukhwinder21
- Mar 2
- 5 min read
UAE OVERHAULS ONSHORE CAPITAL MARKETS FRAMEWORK SCA RECONSTITUTED AS CMA EFFECTIVE 1 JANUARY 2026
Summary: The United Arab Emirates (UAE) has introduced a comprehensive overhaul of its onshore capital markets regime through Federal Law No. 32 of 2025 and Federal Law No. 33 of 2025. The reforms reconstitute the former Securities and Commodities Authority as the Capital Market Authority and significantly expand regulatory supervision, cross-border reach, governance requirements, and enforcement powers.
In Detail: The UAE has enacted two landmark federal laws that collectively reform the onshore capital markets regime, reconstituting the Securities and Commodities Authority (SCA) as the Capital Market Authority (CMA) and significantly expanding supervisory, conduct, and enforcement powers. Both laws came into effect on 1 January 2026 and apply broadly to licensed firms, approved persons, issuers (including foreign issuers), funds, market operators, and participants engaged in cross-border activities connected to the UAE.
The reform is introduced through Federal Law No. 32 of 2025, which formally reconstitutes the former Securities and Commodities Authority as the CMA and establishes its governance structure and supervisory mandate, and Federal Law No. 33 of 2025, which replaces the previous regulatory framework with a substantially expanded capital markets regime. Together, these laws extend regulatory reach, heighten compliance obligations, and strengthen enforcement tools available to the Authority.
A key feature of the new framework is its express extraterritorial reach, the law applies to any person targeting clients in the UAE, even where the activity is conducted from outside the UAE or from a financial free zone, provided it falls within the scope of the legislation. The regime also introduces a licence transfer mechanism, allowing licensed entities to transfer financial activity licences to another person, subject to regulatory approval. Board and senior executive appointments now require prior approval from the Authority, which may reject nominations or renewals.
The CMA has been granted enhanced early-intervention and prudential powers, including the authority to appoint temporary managers in cases of solvency concerns or serious violations, suspend licences (including at the request of the licensee), and continue exercising enforcement powers for up to three years after licence revocation where misconduct is identified. Close-link arrangements must be notified, and the Authority may require restructuring where supervisory visibility is impaired.
The new law also strengthens oversight of foreign issuers and cross-border activity. Foreign issuers even where securities are unlisted must submit documents, financial reports, and comply with disclosure obligations, including those relating to material information and market rumours. The regime expressly covers foreign securities dealings within the UAE and provides tools such as trading halts and transaction nullification in exceptional circumstances.
Additional reforms affect the funds regime, permitting certain funds to adopt commercial company forms under the UAE Companies Law (subject to regulatory approval), and introduce a comprehensive resolution framework for systemic firms. The CMA’s powers in this regard include removal of management, transfer or sale of assets and liabilities, establishment of bridge entities, moratoria, and creditor stays. Importantly, client asset protection is reinforced. Client assets must be segregated and are recoverable on priority, with client claims ranking ahead of other creditors, and shareholders ranking last.
Overall, the 2026 reforms represent a significant recalibration of the UAE’s onshore capital markets framework, aligning it more closely with global supervisory standards while materially increasing compliance, governance, and cross-border regulatory obligations.
Key Links: UAE Capital Market Regulatory Overhaul: Key Changes from 1 January 2026 - Al Tamimi & Company
UAE ENACTS NEW CIVIL TRANSACTIONS LAW
Summary: The UAE has enacted Federal Decree-Law No. 25 of 2025, issuing a new Civil Transactions Law effective June 2026. A key reform is the reduction of the age of legal majority from 21 to 18, granting individuals full legal capacity at 18. This change has significant implications for existing wills, guardianship arrangements, probate matters, and succession planning, particularly where documents assume minority status until 21.
In Detail: The UAE has enacted Federal Decree-Law No. 25 of 2025, issuing a new Civil Transactions Law, which will come into effect in June 2026. The legislation introduces wide-ranging reforms to the UAE’s civil law framework, with significant implications for estate planning, guardianship structures, probate proceedings, and succession arrangements, particularly for expatriates and cross-border families.
A fundamental change under the new law is the reduction of the age of legal majority from 21 to 18 years. From June 2026, an individual who has reached 18 Gregorian years, is of sound mind, and is not legally interdicted will have full legal capacity. This marks a major shift from the previous regime, under which guardianship and court supervision generally continued until age 21. As a result, many existing wills that assume minority status until age 21 may require review, particularly where guardianship appointments or asset control provisions extend beyond age 18. In addition, individuals aged 18 and above will now have full testamentary capacity and may validly execute a will under UAE law.
The law also introduces broader judicial discretion. Under Article 1, where no express statutory provision exists, courts may apply principles of Islamic Sharia in a manner that best achieves justice and public interest, without being confined to a specific school of jurisprudence. This represents a departure from the previous framework, which prioritised the Maliki school and applied a structured hierarchy among other schools. UAE courts are now expressly empowered to exercise independent judicial reasoning within the bounds of public order and justice.
Further, the reform affects ongoing probate matters. Assets historically held under court supervision until beneficiaries reached 21 may now become eligible for earlier release once beneficiaries attain 18. Clients with current estate administration proceedings should assess whether applications for early distribution may be appropriate.
The law also introduces a noteworthy flexibility mechanism under Article 15, permitting courts upon application by a guardian, trustee, or a discerning minor aged 15 or above, to authorise a minor to manage all or part of their assets, subject to conditions. This provision enables earlier, supervised financial autonomy and should be considered carefully in estate structuring and guardianship planning.
Importantly for expatriates, Article 17 confirms that if a foreign national dies without heirs and holds UAE-situated assets, those assets will automatically devolve into a charitable waqf administered by the competent authority. In the absence of a valid and enforceable UAE will, this outcome applies by operation of law. Foreign wills or reliance on foreign succession laws may not provide adequate protection due to enforcement complexities and delays. Properly drafted and registered UAE wills remain critical to avoid unintended statutory outcomes.
With the June 2026 commencement date approaching, clients should proactively review existing wills, guardianship clauses, age-based distribution provisions, and ongoing probate files. Early restructuring, where required will help ensure that estate planning arrangements remain aligned with the new legal framework and avoid unintended consequences once the law takes effect.
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