SCA

The Securities and Commodities Authority (SCA) is the federal regulator for the onshore UAE securities and derivatives market. It was established in 2000 and supervises everything outside the two financial free zones — so a firm soliciting clients in Dubai city, Sharjah or Ajman needs SCA authorisation, while a firm inside the DIFC answers to the DFSA and a firm inside ADGM answers to the FSRA. The three regimes are separate, and a licence from one is not a passport into the others.

What the licence requires

The SCA licenses brokerage activity by category, with separate permissions for dealing in securities, dealing in commodity and currency contracts, and introducing. Its 2020 framework brought over-the-counter derivatives and margin trading firmly into scope, requiring firms to hold minimum paid-up capital, appoint UAE-resident compliance staff and place client money with local banks under segregation rules.

Firms must be UAE-incorporated with a physical presence. The SCA does not authorise offshore entities to serve UAE residents remotely, which is why several international brands operate a separate SCA-licensed subsidiary alongside their offshore book.

Retail protections and leverage

SCA rules require client classification, risk disclosure in Arabic and English, and margin policies filed with the regulator. There is no single published retail leverage ceiling equivalent to the ESMA 30:1 rule; leverage is set within the firm's approved risk framework. Marketing is tightly controlled, and unlicensed solicitation of UAE residents is an enforcement priority the SCA has pursued repeatedly against offshore brands.

If a broker fails

The UAE has no federal retail investor compensation scheme for margin forex. Protection rests on segregation, on the firm's capital, and on UAE civil courts rather than the common-law courts of the free zones. Litigation onshore is conducted in Arabic and follows civil-code procedure, which is a practical difference worth weighing before you choose between an onshore and a free-zone entity.

Verifying a licence

The SCA publishes lists of licensed companies and, separately, public warnings about entities soliciting UAE residents without authorisation. Check both. A broker that appears on the warning list while advertising a free-zone licence is telling you that the entity marketing to you is not the entity holding the licence — a pattern ProForexBrokers.com sees often enough that it is worth building into your own checks.

Who an SCA broker suits

An SCA-licensed broker suits UAE residents who want a locally incorporated counterparty, dirham-denominated accounts and local banking rails, and who value the regulator's willingness to act against unlicensed solicitation. Traders who want English common law and English-language dispute resolution are better served by the DIFC or ADGM entities.