UAE regulators are preparing a safety net for investors. The country’s Capital Market Authority (CMA) says it plans to establish an Investor Protection Fund and add new safeguards for exceptional market circumstances, as part of a push to strengthen confidence and widen participation in the markets.
Waleed Saeed Al Awadhi, the authority’s chief executive, outlined the plans to
What a protection fund does
An investor protection fund is designed to compensate clients of a licensed broker or asset manager that collapses and cannot return their money or securities. For small investors, it can be the difference between a total loss and partial recovery.
The authority has not yet said how big the fund will be, when it will launch or where its money will come from. Those are the details investors will want to see before judging how much protection it gives.
Safeguards for stressed markets
The CMA is also drafting rules for exceptional market conditions, which would give it tools to respond if trading becomes disorderly. It is working on improvements to complaints, appeals and settlement procedures, and on rules that would let private joint-stock companies and free-zone businesses raise capital through private placements.
The regulator is also examining a framework for retail and fractional sukuk. Such a structure could let residents buy Islamic fixed-income products with much smaller sums than today, widening access to an asset class that has often been limited to larger investors.
Three priorities for 2027
The authority has identified investor protection, broader market access and digital transformation as its three main priorities for next year. Beyond the proposed fund and safeguards, it is progressing regulations on systemically important entities, the division of public joint-stock companies and instant licensing.
It is also strengthening supervision of market misconduct, including price manipulation, insider trading, misleading financial disclosures and investment fraud.
The legal backdrop
The announcement builds on a major overhaul. Federal Decree-Laws 32 and 33 of 2025 came into force on January 1, 2026, replacing the former Securities and Commodities Authority with the CMA and giving it broader powers and greater independence. Law firms say the framework allows the authority to create investor protection and settlement guarantee funds, and to impose administrative fines of up to AED 200 million or ten times the profit gained or loss avoided.
So far this year, the CMA reports that the number of companies it licenses rose 43 per cent year on year in the first nine months of 2026. The number of local investment funds increased 94 per cent to 97, and their assets under management grew 30 per cent to Dh28.6 billion. Enforcement has also stepped up. Arab News reported that the number of financial fines rose 246 per cent over the same period, while their total value increased 23 per cent to Dh12.9 million.
Why the timing matters
Investor confidence has had a tougher year. Regional conflict has weighed on sentiment, and UAE equity markets broke their winning streaks in October, according to analysis from Enterprise. Against that background, a visible safety net could help reassure savers who are considering a move into markets.
What investors should do now
The fund is still a plan, so it offers no protection today. In the meantime, investors can:
- Deal only with firms licensed by the CMA or by a recognised free-zone regulator.
- Check that a broker holds client assets separately.
- Be cautious about “financial influencers” and unsolicited investment tips. The CMA has reported a rise in registered influencers, a sign that regulators are paying attention to online promotion.
- Read the terms of any new product before investing, especially if it promises unusually high returns.
What to watch
Key questions remain open: the fund’s size, funding model, eligibility rules and launch date. Regulators will also need to explain how retail sukuk would work in practice, including minimum investment sizes and liquidity. Further details are likely as the authority moves toward its 2027 goals.
For a market that wants to attract more first-time investors, clear answers on those points may prove as important as the fund itself.
