sca — securities and commodities authority

The Securities and Commodities Authority (SCA) — now officially branded as the Capital Market Authority (CMA) — is the UAE’s federal securities and commodities market regulator, established under Federal Law No. 4 of 2000. The SCA exercises jurisdiction over securities and commodities markets throughout the UAE, excluding the financial free zones of ADGM and DIFC, and plays a central role in the federal regulatory framework for tokenized securities and virtual assets.

institutional history and mandate

The SCA was established to regulate, develop, and enhance the UAE’s capital markets. Over more than two decades, the authority has built comprehensive regulatory infrastructure covering the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM), public joint-stock company governance, investment fund regulation and oversight, financial services licensing for capital market activities, and anti-money laundering and counter-terrorism financing compliance for regulated entities.

The authority provides a range of services accessible through its digital platform, including legislation access, staff accreditation for licensed companies, investment fund documentation amendments, PJSC articles of association amendments, merger applications, acquisition approvals, and securitization applications. These services reflect the SCA’s broad mandate across the UAE’s onshore capital markets.

The SCA’s regulatory philosophy emphasizes transparency, investor protection, and market efficiency within a legislative framework aligned with international best practices. The authority’s quality policies and corporate governance frameworks reflect this commitment to regulatory excellence.

federal virtual asset jurisdiction

The SCA’s jurisdiction over virtual assets derives from two primary regulatory instruments. Decision No. 23/R.M of 2020 on Crypto Assets established the initial framework for regulating crypto asset activities under SCA supervision, creating the first federal-level regulatory approach to virtual assets in the onshore UAE. Cabinet Decision No. 111 of 2022 designated the SCA as the federal coordination authority for VASP regulation, established the national VASP register, and set baseline standards applicable across all jurisdictions including the financial free zones.

Under Cabinet Decision No. 111, the SCA coordinates the federal VASP regulatory framework while respecting the regulatory autonomy of VARA, ADGM FSRA, and the DFSA within their respective jurisdictions. This coordination role means the SCA maintains the national registry of licensed VASPs across all jurisdictions, ensures baseline standards are met by all regulatory authorities, coordinates with the CBUAE on the boundary between securities and payment token regulation, and reports to the federal government on the overall effectiveness of the multi-authority VASP regulatory framework.

tokenized securities regulation

For tokens classified as securities under UAE federal law, the SCA exercises primary regulatory jurisdiction. The SCA federal securities tokenization rules establish the regulatory treatment of tokenized securities including registration and offering requirements for security token issuances, disclosure obligations for issuers of tokenized securities, trading rules for secondary market activity in security tokens, and reporting and compliance requirements for platforms facilitating security token transactions.

The token classification framework is critical for determining which tokens fall within the SCA’s securities jurisdiction versus the CBUAE’s payment token jurisdiction. The classification analysis considers whether the token confers rights similar to traditional securities (voting rights, profit-sharing, ownership claims), whether the token is primarily a medium of exchange (placing it under CBUAE jurisdiction), and whether the token is a utility token with limited regulatory implications under either framework.

implementing regulations development

The SCA continues to develop implementing regulations under Cabinet Decision No. 111, progressively building the operational detail required for comprehensive onshore VASP licensing and supervision. The implementing regulations cover licensing procedures and application requirements for onshore VASPs, capital adequacy standards calibrated to different VASP activity types, technology governance and cybersecurity requirements, client asset protection and custody standards, reporting obligations including periodic regulatory reporting and ad hoc notifications, and market conduct standards for VASPs.

The SCA’s phased approach to implementing regulations reflects the complexity of building a comprehensive onshore VASP framework that coordinates with established free zone frameworks. The SCA implementing regulations brief tracks development progress. The regulatory framework tracker dashboard monitors the overall status of federal regulatory framework implementation.

institutional developments and capacity building

The SCA reported record growth in January 2026, indicating expanding market development under its supervision. This growth reflects both the maturation of the UAE’s capital markets and the SCA’s expanding mandate over tokenized assets and virtual asset activities.

H.E. Waleed Al Awadhi serves as CEO and chaired the AMERC Plenary Meeting in Abu Dhabi in November 2025, demonstrating the SCA’s international regulatory leadership. The SCA, ADGMA, and Sandooq Al Watan launched the third edition of the Financial Market Pioneers Program in November 2025 under the patronage of Sheikh Nahyan bin Mubarak, building human capital in the financial markets sector.

The SCA’s December 2025 announcement about developing an innovative risk-assessment methodology signals investment in enhanced supervisory capabilities. Advanced risk assessment tools are particularly important for the virtual asset sector, where the pace of innovation requires adaptive supervisory approaches.

regulatory tools and infrastructure

The SCA maintains several regulatory tools relevant to the tokenization ecosystem. The licensed company registers document all entities authorized to conduct regulated activities under SCA supervision. The violations and violators database provides transparency on enforcement actions, serving as both a public accountability mechanism and a deterrent against non-compliance.

The FinTech Regulatory Sandbox provides a structured testing environment for innovative financial technology firms, including those developing tokenization-related products and services. The sandbox allows firms to test products under regulatory supervision with tailored requirements before pursuing full licensing.

The SCA’s regulations listing provides the complete regulatory instrument database. The open data portal includes investor information, registered companies, warnings, and market statistics, reflecting the authority’s commitment to regulatory transparency.

international engagement

The SCA is a member of several international organizations that inform its regulatory approach. The International Organization of Securities Commissions (IOSCO) sets global standards for securities regulation, including emerging standards for crypto-asset markets. The Union of Arab Securities Authorities (UASA) facilitates regional regulatory coordination. The Islamic Financial Services Board (IFSB) develops standards for Islamic financial services, relevant to the UAE’s significant Islamic finance sector. The Association of National Numbering Agencies (ANNA) supports securities identification standards.

The SCA’s participation in IOSCO working groups on crypto-asset regulation provides exposure to international best practices and influences the development of UAE-specific regulatory standards. The AMERC Plenary Meeting hosted by the SCA in November 2025 demonstrated the authority’s commitment to international regulatory engagement and leadership.

investor protection and market integrity

The SCA’s approach to investor protection in the tokenized asset context builds on its established framework for traditional securities markets. Key investor protection mechanisms include mandatory disclosure requirements for tokenized securities issuances, market conduct rules prohibiting insider trading, market manipulation, and misleading communications in tokenized asset markets, fitness and propriety standards for personnel at licensed VASPs, and client asset segregation requirements ensuring that VASP insolvency does not affect client holdings.

The SCA maintains a warnings page that identifies entities operating without authorization, providing a public resource for investors to verify the legitimacy of firms offering virtual asset services. The violations and violators database documents enforcement actions, creating transparency and accountability in the regulatory process.

The SCA’s Investor Portal provides additional resources for market participants. The authority’s December 2025 participation in the UAE Government’s “Community Participation in Zero Bureaucracy” initiative reflects its commitment to accessible and responsive regulatory engagement.

sustainable finance and emerging priorities

The SCA actively participates in the UAE Sustainable Finance Working Group, which published its fourth statement during Abu Dhabi Finance Week in December 2025. This engagement positions the SCA to develop regulatory frameworks for sustainable finance-related tokenization, including green bonds issued on blockchain, carbon credit tokenization, and ESG-linked digital securities.

The intersection of sustainable finance and tokenization represents a growing regulatory priority as institutional interest in tokenized sustainable finance instruments increases. The SCA’s participation in international sustainable finance initiatives, including through IOSCO’s Sustainable Finance Task Force, provides exposure to emerging best practices.

cross-authority coordination

The SCA coordinates with the CBUAE on aspects of virtual asset regulation involving monetary and payment system dimensions, ensuring clear delineation between securities and payment token regulation. The SCA coordinates with VARA and ADGM FSRA on matters crossing the boundary between federal and free zone jurisdiction, including cross-border activities and multi-jurisdictional operations.

In October 2025, the SCA and DFSA signed a Memorandum of Understanding strengthening cooperation on auditor oversight, demonstrating the expanding scope of cross-authority coordination beyond virtual assets into foundational regulatory infrastructure.

For deep analysis, see the SCA federal securities tokenization rules, the Cabinet Decision No. 111 analysis, the federal vs free zone comparison, the cross-emirate regulatory arbitrage analysis, the SCA implementing regulations brief, and the regulatory framework tracker dashboard.

aml/cft supervision and enforcement

The SCA’s AML/CFT supervisory capacity extends to all entities licensed under its jurisdiction. The authority implements the federal AML/CFT framework through supervisory assessments that examine CDD program adequacy, transaction monitoring effectiveness, STR filing quality and timeliness, sanctions screening coverage, and Travel Rule implementation. Enforcement actions for AML/CFT deficiencies are documented in the violations database, providing transparency on the SCA’s approach to non-compliance. The SCA’s AML/CFT supervision was a factor in the UAE’s FATF grey list remediation, and the authority maintains enhanced supervisory focus on AML/CFT effectiveness in the virtual asset sector.

Website: sca.gov.ae Location: Abu Dhabi, United Arab Emirates