Capital market firms operating in the UAE, from brokers and investment companies to asset managers and financial consultancies, sit at the centre of the country’s anti-money laundering enforcement priorities. With Federal Decree-Law No. 10 of 2025 now in force and the Capital Market Authority (CMA) replacing the Securities and Commodities Authority (SCA), AML regulations for capital market firms in the UAE have become stricter, broader in scope, and far more costly to ignore. This guide explains what has changed, who is affected, and how firms can build AML compliance frameworks that satisfy regulators and protect their licences.
Why AML Compliance Matters for UAE Capital Market Firms
Capital markets are a recognised high-risk channel for money laundering because of the speed, volume, and cross-border nature of securities transactions. Regulators view brokers, investment firms, fund managers, and financial consultancies as gatekeepers who must detect and block illicit funds before they enter the formal financial system.
Following its removal from the Financial Action Task Force (FATF) grey list, the UAE has prioritised sustained AML enforcement to protect that status. For capital market firms, this means:
- Closer scrutiny of client onboarding and source-of-funds checks
- Mandatory registration and active use of the goAML reporting portal
- Board-level accountability for AML governance
- Significantly higher financial and criminal penalties for breaches
The Legal Framework Governing AML for Capital Market Firms in the UAE
Federal Decree-Law No. 10 of 2025
Federal Decree-Law No. 10 of 2025 on Combating Money Laundering, the Financing of Terrorism, and the Financing of Proliferation of Weapons came into effect on 14 October 2025, repealing the previous Federal Decree-Law No. 20 of 2018 and its 2021 amendment. This is the single most important legislative change affecting AML regulations for capital market firms in the UAE. Key features include:
- A new offence of proliferation financing, covering the financing of weapons of mass destruction and dual-use goods
- A lowered evidential threshold for money laundering, so that a firm can be liable where it knew or ought reasonably to have known that funds derived from criminal conduct
- Expansion of predicate offences to include direct and indirect tax evasion
- Direct regulation of virtual asset service providers (VASPs), relevant to capital market firms offering tokenised securities or digital asset products
- Extended Financial Intelligence Unit (FIU) freezing powers, from seven days to up to 30 days, extendable by the Public Prosecutor
- Statutory cross-border cash and asset disclosure obligations under Article 10
Cabinet Resolution No. 134 of 2025
The executive regulations supporting the new law, Cabinet Resolution No. 134 of 2025, took effect on 14 December 2025 and revoked the earlier Cabinet Decision No. 10 of 2019 and Cabinet Resolution No. 24 of 2022. It sets out the detailed, day-to-day obligations capital market firms must follow, including customer due diligence procedures, record-keeping requirements, and the designation of additional non-financial businesses within scope.
Transition from the SCA to the CMA
From 1 January 2026, Federal Decree-Law No. 32 of 2025 and Federal Decree-Law No. 33 of 2025 replaced the SCA with the newly established federal Capital Market Authority (CMA), which now supervises AML compliance for securities brokers, investment firms, and other licensed capital market participants. Existing SCA resolutions, including the SCA Rulebook, continue to apply during a one-year transition period ending 1 January 2027, unless they conflict with the new laws. Capital market firms should expect the CMA to issue updated AML supervisory guidance as this transition progresses.
Who Is Regulated? Capital Market Firms Under the AML/CFT Framework
The AML/CFT regime applies broadly to financial institutions and designated non-financial businesses and professions (DNFBPs). Within the capital markets space, this typically includes:
- Licensed securities brokers and dealers
- Investment companies and portfolio managers
- Financial consultancies and advisory firms
- Fund managers and fund administrators
- Custodians and clearing entities
- Firms dealing in virtual assets linked to capital market products
Firms marketing or soliciting capital market activities to UAE-based clients from outside the country, or from a financial free zone, may also fall within the expanded jurisdictional reach introduced by the new capital markets laws.
Key AML Obligations for Capital Market Firms in the UAE
Capital market firms must build compliance programmes around the following core requirements:
- Risk-based customer due diligence (CDD) and enhanced due diligence (EDD) for higher-risk clients, including politically exposed persons
- Verification and ongoing monitoring of beneficial ownership; a business relationship cannot proceed if the ultimate beneficial owner cannot be identified
- Enterprise-wide AML/CFT risk assessments, reviewed and updated on a continuous basis
- Registration on the goAML platform and timely filing of suspicious transaction reports (STRs) and suspicious activity reports (SARs)
- Sanctions and watchlist screening of clients, counterparties, and transactions
- Transaction monitoring systems calibrated to capital market products and trading patterns
- Record-keeping of client files, transaction data, and internal AML decisions for the statutory retention period
- Staff training on money laundering, terrorist financing, and proliferation financing red flags
- Board and senior management accountability for AML governance, controls, and escalation processes
Penalties for AML Non-Compliance in the UAE Capital Markets Sector
Federal Decree-Law No. 10 of 2025 significantly increases the financial and personal exposure facing non-compliant capital market firms:
- Corporate fines reaching into the tens of millions of dirhams, with some breaches attracting penalties up to AED 100 million
- Fines for terrorism financing offences of up to AED 10 million or double the value of the property involved
- A minimum fine of AED 20,000 for providing misleading or incorrect beneficial ownership information, with potential imprisonment
- Personal liability for directors and senior managers where wilful misconduct, gross negligence, or inadequate controls contribute to a breach, including bans from management roles
- Licence suspension, revocation, or the appointment of a temporary controller for serious or repeated failures
- No statute of limitations for the most serious offences under the new law
How Capital Market Firms Can Build a Robust AML Compliance Framework
Given the scale of these reforms, capital market firms should treat AML compliance as an immediate priority rather than a routine annual review. Practical steps include:
- Conducting a gap analysis comparing existing AML policies against Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025
- Updating CDD, EDD, and beneficial ownership procedures to reflect the lowered evidential threshold
- Refreshing enterprise-wide risk assessments to capture proliferation financing and virtual asset exposure
- Strengthening transaction monitoring and sanctions screening technology
- Reviewing board and senior management accountability structures for AML governance
- Ensuring goAML registration is active and STR filing procedures are tested
- Delivering refresher AML training to compliance officers, MLROs, and front-office staff
- Monitoring CMA guidance as the transition from the SCA framework continues through 2026 and into 2027
Frequently Asked Questions
Does the CMA now supervise AML compliance for capital market firms in the UAE?
Yes. The Capital Market Authority replaced the Securities and Commodities Authority from 1 January 2026 and has assumed its regulatory and supervisory functions, including oversight of AML compliance for licensed capital market participants, during a transition period running to 1 January 2027.
What is the biggest change under Federal Decree-Law No. 10 of 2025 for capital market firms?
The most significant changes are the lowered evidential threshold for establishing a money laundering offence, the introduction of proliferation financing as a distinct crime, and substantially higher penalties, including personal liability for directors and senior management.
Do virtual asset activities linked to capital markets fall under the new AML law?
Yes. Virtual asset service providers and firms offering digital or tokenised capital market products are directly regulated under Federal Decree-Law No. 10 of 2025 and must meet licensing, customer due diligence, and reporting obligations equivalent to traditional financial institutions.
What happens if a capital market firm cannot verify a client’s beneficial owner?
The business relationship cannot proceed. Regulators require capital market firms to identify and verify beneficial ownership before onboarding, and providing misleading ownership information carries fines starting at AED 20,000 with potential imprisonment.
Strengthen Your AML Compliance Framework with Jitendra Chartered Accountants
AML regulations for capital market firms in the UAE are evolving quickly, and the cost of falling behind is far higher than the cost of staying compliant. Jitendra Chartered Accountants supports capital market firms, brokers, and investment companies with AML risk assessments, policy design, goAML registration support, and ongoing compliance advisory tailored to the requirements of Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025.
Contact Jitendra Chartered Accountants today to schedule an AML compliance review and safeguard your firm against regulatory and financial risk.
