1.1 SCA — establishment & mandate
▼The Securities & Commodities Authority (SCA) syllabus 1.1
The SCA is the UAE federal regulator for capital markets, established by Federal Law No. 4 of 2000. It supervises the licensed markets (ADX, DFM, NASDAQ Dubai for onshore activities) and the licensed bodies practising financial activities (Cat 1–5).
It does NOT regulate banking (that's the Central Bank), insurance (now also the Central Bank since the regulator was merged), or the DIFC/ADGM free zones (which have their own regulators — DFSA and FSRA respectively).
Core objectives syllabus 1.1
- Protect investors against unfair practices
- Develop the capital markets in an efficient and transparent manner
- Promote financial literacy and investor awareness
- Combat market abuse, money laundering and terrorism financing
- Coordinate with international regulators (IOSCO, FATF, GCC peer authorities)
SCA values syllabus 1.1
Often tested: which of these is NOT an SCA value? The list is — Integrity, Transparency, Excellence, Innovation, Cooperation.
1.2 SCA governance & finances
▼Board of Directors — appointment & terms syllabus 1.2
Fiscal year & financial governance syllabus 1.2
- Fiscal year: 1 January – 31 December (calendar year)
- Final accounts to board: within 90 days of FY end
- Budget submission: at least 1 month before the start of new FY
- Cabinet of Ministers reporting: every 6 months
1.3 The five license categories
▼Categories & capital requirements syllabus 1.3
| Cat | Activity | Capital | Notes |
|---|---|---|---|
| 1 | Securities (broker-dealer) | AED 30 million | Includes market-making, dealing on own account |
| 2 | Investment (asset management) | AED 50 million | Discretionary management; fund management |
| 3 | Custody & Clearing | AED 50 million | Often integrated with depository banks |
| 4 | Credit Rating | AED 5 million | Lowest capital — narrower risk profile |
| 5 | Ranking & Advice | None | The "advisory only" category — no capital |
Legal form — Cat 2 trap syllabus 1.3
Categories 1, 2 and 3 must take the legal form of a public joint-stock company (PJSC) or equivalent corporate vehicle. Cat 4 and Cat 5 are more flexible — a Cat 5 firm can operate as an LLC.
1.4 Market licensing process
▼Market license application timeline syllabus 1.4
| Step | Timing |
|---|---|
| SCA review of application | Within 15 days |
| Board decision on COMPLETE application | Within 30 days |
| Cancellation publication | 2 daily newspapers (≥1 Arabic) |
| Document retention | ≥ 10 years |
1.5 Corporate Governance rules
▼The five CG pillars syllabus 1.5
- Accountability — board members answer for decisions
- Responsibility — appropriate allocation of duties
- Transparency — full and prompt disclosure
- Fairness — equitable treatment of all shareholders, esp. minorities
- Social responsibility — broader impact considered
Symbolic gifts — AED 500 cap syllabus 1.5
Board members may accept gifts only up to AED 500 per gift. Anything above triggers disclosure and potential decline. The deliberately low threshold prevents normalisation of routine inducement.
1.6 CISI Code of Conduct
▼The CISI Code's eight principles syllabus 1.6
- Integrity
- Skill, care, and diligence
- Compliance with regulatory and legal requirements
- Personal accountability for actions
- Acting professionally in dealings
- Respect for others
- Continuing professional development
- Achieving a positive outcome for clients, employer and society
Spirit vs letter of the Code syllabus 1.6
The Code requires members to follow the spirit of the rules, not just the literal text. Technical compliance combined with unethical intent is still a breach.
1.7 Appeals & sanctions
▼SCA as appellate forum syllabus 1.7
When the board of directors of a MARKET imposes penalties (warning + monetary fine) on a broker, the broker may appeal to the SCA. The SCA may adjudicate. Beyond the SCA, judicial appeal is available via UAE courts.
Suspending trading — quorum requirement syllabus 1.7
The market's board may suspend trading by a majority of the MEMBERS PRESENT at the meeting (not a majority of the entire board membership in office). Classic wording trap.
1.8 Cheat sheet — all the numbers
▼Every Ch 1 threshold in one place exam day
| Topic | Threshold |
|---|---|
| SCA board term | 4 years, renewable once |
| Missed meetings → removal | 3 consecutive |
| Securities disclosure to SCA | Within 1 week |
| SCA fiscal year | 1 Jan – 31 Dec |
| Final accounts to board | Within 90 days |
| Budget submission before new FY | ≥ 1 month |
| Cabinet reporting cadence | Every 6 months |
| Market licence app — SCA review | Within 15 days |
| Market licence app — board decision | Within 30 days |
| Symbolic gift cap | AED 500 |
| Related-party — board only | < 5% of capital |
| Related-party — GA + assessor | ≥ 5% of capital |
| Related-party — sister defn | ≥ 30% common ownership |
| Document retention | ≥ 10 years |
| Cat 1 capital (Securities) | AED 30 million |
| Cat 2 capital (Investment) | AED 50 million |
| Cat 3 capital (Custody/Clearing) | AED 50 million |
| Cat 4 capital (Credit Rating) | AED 5 million |
| Cat 5 capital (Ranking & Advice) | None |
Ready to drill?
- 🎯 Practice Ch 1 questions on the quiz app — the bank has 75 calibrated MCQs.
- 📊 Run a full mock after a couple of chapters to test integration.
- 🔄 Review missed mode revisits previously-wrong Qs.