Securities and Commodities Authority in the UAE

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Table of Contents

Introduction
Financial Disclosure
Auditing Practices
Financial Market
Conclusion
Works Cited

Introduction

Created by Federal Law No. (4) of 2000, Securities and Commodities Authority (SCA) of the UAE is a governmental body that provides the legislative regulations and instructions meant for the protection and development of investment, improvement of the UAE markets’ efficiency, promotion of sound relevant practices, and improvement of legal awareness (“About SCA” par. 1-4; “Vision, Mission and Values” par. 2). Apart from that, the Authority performs licensing and supervision and provides support and organizational services. SCA is of supreme importance for the financial activities in the UAE.

Financial Disclosure

Transparency is one of the fundamental values of SCA (“Vision, Mission and Values” par. 5). “Decision No. (3R) of 2001″ demands the timely disclosure of necessary financial information as a mandatory condition of market functioning (4). The most recent update on the disclosure policy that was provided by the Authority is contained in the “The Authority’s Board of Directors’ Decision No (16) of 2014” (1).

Auditing Practices

SCA licenses auditors and provides rules and instructions for their practices. All the requirements and procedures for the licensing of various kinds of financial consultancy and auditing services are presented on the website of the Authority. Apart from competence and qualifications, SCA demands that the applicants have a good reputation (have never committed a crime against honor) and requires that they are full-timers, although this condition may apply to the manager or CEO of a company (“Licensing of Financial Consultation and Financial Analysis” par. 16-18). SCA has issued a number of regulations meant for auditing practices. The most recent one (“Board of Directors’ Decision No. (25) of 2015″) updated the requirements and procedures for the registration of “Auditors of Public Shareholding Companies and Mutual Funds” (1-9). The “Ministerial Resolution No. (518) of 2009″ created by the Minister of Economy and the Authority states the rules and regulations for the creation and functioning of Audit Committees and the nomination of External Auditor as well as defining the scope of their activities (13-17). For example, Audit Committees must consist of at least three members, and at least one of them is supposed to be an expert in finance and accounting. The majority of them is supposed to be Independent Board Members. In a similar manner, all the possible aspects of auditing are regulated by relevant instructions.

Financial Market

The development and regulation of the UAE financial market are the primary mission and goals of SCA (“Vision, Mission and Values” par. 2). Dubai Financial Market and Abu Dhabi Securities Exchange are supervised by this governmental body (Paltrinieri 369). According to the Authority, it regulates the “markets for trading in securities and commodities [that] have been set up in the UAE” (“About SCA” par. 3). SCA states that all the markets must be SCA-licensed local public establishments; apart from that, they are all supposed to be connected electronically. SCA also defines the rules for the market board establishing and membership as per Decision No. (2R): the members are appointed by a local authority, which ensures that none of them is a broker or happens to be included in a governing body of a listed company.

The regulations for the securities markets’ creation, functioning, licensing, and supervision (which includes the Decision No. (3R)), Decision No. (11), Decision No. (70R), and Decision No. (2R) as well); listed companies, fees, fines, as well as arbitration and money laundering, are listed on the “Rules and Regulations” webpage of SCA (par. 1-6).

Conclusion

SCA provides the necessary regulation, licensing, and supervision for various aspects of financial activities in the UAE and ensures that the information can be easily accessed through the Authority’s website.

Works Cited

“About SCA.” Securities and Commodities Authority. Securities and Commodities Authority, 2013. Web.

“Board of Directors’ Decision No. (25) of 2015 Concerning the Registration of Auditors of Public Shareholding Companies and Mutual Funds.” Securities and Commodities Authority. Securities and Commodities Authority, 2015. Web.

“Decision No. (3R) of 2001 Concerning the Regulations as to the Functioning of the Market.” Securities and Commodities Authority. Securities and Commodities Authority, 2001. Web.

“Licensing of Financial Consultation and Financial Analysis.” Securities and Commodities Authority. Securities and Commodities Authority, 2015. Web.

“Ministerial Resolution No. (518) of 2009 Concerning Governance Rules and Corporate Discipline Standards.” Securities and Commodities Authority. Securities and Commodities Authority, 2009. Web.

Paltrinieri, Andrea. “Stock Exchange Industry In UAE”. International Journal of Emerging Markets 10.3 (2015): 362-382. Emerald. Web.

“Rules and Regulations.” Securities and Commodities Authority. Securities and Commodities Authority, 2015. Web.

“The Authority’s Board of Directors’ Decision No (16) of 2014.” Securities and Commodities Authority. Securities and Commodities Authority, 2014 Web.

“Vision, Mission and Values.” Securities and Commodities Authority. Securities and Commodities Authority, 2015. Web.

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