SCA Warns UAE investors Against Unlicensed Trading Firms

The Securities and Commodities Authority (SCA) has issued a strong public advisory warning UAE residents to avoid dealing with unlicensed trading companies. These companies purported to offer trading services with alleged regulatory approval from concerned authorities and investigations revealed that they lacked the authority.

In an official statement, the SCA confirmed that several firms advertising and trading services in local newspapers have been found to be operating without the necessary regulatory approvals. These entities had allegedly claimed to be licensed or authorised to conduct financial activities in the UAE, misleading potential investors.

The authorities have confirmed that such companies are not recognised under the UAW laws and that any or all financial dealings made with these companies does not fal within the scope of legal protection. “The SCA bears no responsibility for losses or disputes arising from transactions with unlicensed entities,” the advisory stated.

What is the SCA?

The Securities and Commodities Authority is the financial regulator for securities activity in onshore UAE, responsible for overseeing and supervising capital markets. Established under Federal Law No. 4 of 2000, the SCA regulates the Emirates Securities and Commodities Market (including the Dubai Financial Market (DFM) and the Abu Dhabi Financial Market (ADX) ) with the objective of protecting investors, ensuring market transparency, and promoting stability in the financial sector. The Authority continuously works to develop the securities and commodities market based on the legislative, regulatory, and supervisory levels, based on sound scientific and professional principles and adopting the best international standards in the field.

Its core functions include licensing brokerage firms, approving financial products, monitoring listed companies, and enforcing compliance with securities laws. Any entity wishing to offer trading, investment advisory, or asset management services within the UAE must obtain prior approval from the SCA. Through these services, the Authority aims to support a safe and attractive investment environment and achieve the highest standards of governance and transparency in the financial markets.

Investor Protection Measures

As part of its ongoing investor-protection mandate, the SCA urged the public to verify the licensing status of any financial service provider before committing funds. The Authority maintains an official online registry of licensed firms and authorised activities, which is publicly accessible.

“Investors should exercise due diligence and confirm that the company they are dealing with is duly licensed by the SCA. This simple step can prevent significant financial harm,” the advispry noted.

The warning forms part of a broader regulatory effort to combat financial fraud, unregulated investment schemes, and misleading advertisements. The SCA had intensified monitoring of digital platforms, social media promotions, and offshore companies targeting UAE residents.

This regulatory move has been lauded by market analysts, noting that unlicensed trading schemes, particularly those offering unrealistic returns, have become a growing concern globally. With the UAE’s position as a leading financial hub, regulators have reiterated that maintaining market integrity and investor confidence remains a top priority.