Securities & Commodities Authority Licencing Process

This article summarises the Securities and Commodities Authority (“SCA”) licencing process with a particular emphasis on the Category Five Licence.

Introduction

SCA is the regulatory body responsible for overseeing and regulating the securities and commodities markets within the United Arab Emirates, excluding the financial free zones.

SCA has several categories of licence, ranging from Category 1 (Dealing in Securities) to Category 7 (Virtual Assets Service Providers).

Within the Category 5 licence, the following activities can be conducted:

• Introducing
• Promotion
• Financial Consulting
• Financial Adviser
• Listing Adviser

SCA has a dedicated portal for filing applications.  SCA use the portal to communicate updates as they review.

The SCA licencing application process works as follows:

 

1. Preparation and submission of Initial Approval Application

The first steps towards SCA licence authorisation is to obtain Initial Approval  from SCA.  There are various elements to obtaining this including but not limited to:

Preparation of Business Plan

The Business Plan is a core document which should outline to SCA what the applicant wants to do and how they intend to do it.  The Business Plan will include market research underpinning the model, ownership details, the human and financial resources to be implemented; and the systems and controls in place to adhere to regulatory requirements. 

The Business Plan provides SCA with an understanding of how organized and prepared you are to operate as a licenced company; and your understanding of regulatory requirements.

Preparation of Financial Projections

SCA require detailed Financial Projections to demonstrate that the applicant has sufficient financial resources to meet its operational expenses and its capital requirements.

The regulatory requirement for paid-up capital should not be less than AED 500,000.

Collation of Supporting Documentation

Accompanying the Business Plan and Financial Projections are various documents that must be provided to SCA.  This includes:

• SCA application form
• Evidence of incorporation
• Fit and proper submissions related to shareholders
• Shareholders ID information
• Police Clearance Reports
• Credit Bureau Checks

Once the documentation has been obtained, the initial application can be submitted to SCA.

Submission of Initial Application with Security and Commodity Authority

All required documentation is submitted to SCA via their portal. 

• Application form for an Initial approval provided on SCA Portal
• Initial Application Fee (See Fees section below)
• Review and Verification
• Submission of Application via SCA Portal.
• The Authority shall issue its decision of approval or dismissal of the request within a period not exceeding (20) business days from the date of filing the request in accordance to its requirements, provided that, in the event of dismissal of the request, the Authority shall clarify the reasons behind dismissal.
• The license applicant shall meet the license conditions and requests within a period not exceeding (6) months from issuance of the initial approval. The Authority may extend such period for another one similar period only. In the event of not meeting the license conditions within that period, it shall be required to re-evaluate.

 

2. Preparation and Submission of Final Licence Application

After receiving Initial Approval from SCA, the next part of the process is the formal Application for Licencing.  This consists of the following:

• Application form for final license must be completed on SCA Portal
• Drafting and Submission of required documents, including but not limited to:
• Policy, Procedures and Manuals
• Outsourcing regulation
• Complaints regulation
• Internal Audit regulation
• Risks Management regulation
• Professional qualification of key personnel and employees
• Staff accreditation for approved jobs and employees.
• Submission of Final License Application on SCA Portal
• Payment of the financial activity licensing fees that is decided by the Authority

Regarding the Senior Management it is important to note the examination requirements.  SCA prescribe specific exams / equivalency process.  All Senior Management appointments must demonstrate they meet the SCA criteria regarding qualifications. We recommend you plan ahead and ensure your Senior Management has obtained the required qualifications.

The Authority shall issue its decision of approval or dismissal of the request within a period not exceeding (30) business days from the date of filing the request according to the required conditions, provided that the Authority provided that, in the event of dismissal of the request, shall clarify the reasons behind dismissal.

 

Application Fees

The fee below is payable for each category five licence activity being applied for.

Type of Activity/Service	Consideration of the Application (Fees in AED)   Payable upon filing initial	License/registration/recording/approval/accreditation (Fees in AED)   Payable upon final application
Introduction	5000	10000
Promotion	3000	10000
Financial Consulting	1000	5000
Financial Adviser (Issuance Manager)	3000	5000
Listing Adviser	3000	5000

 

Timeline

SCA states that it can take approximately 20 business days to review and issue a decision on an Initial Approval application and further 30 business days on final licensing Application submission.  This time frame can vary depending on the complexity of the application and the quality of the submission made.

The license applicant shall meet the license conditions and requests within a period not exceeding (6) months from issuance of the initial approval. The Authority may extend such period for another one similar period only.  In the event of not meeting the license conditions within that period, it shall be required to re-evaluate the initial approval request.

 

How can Reg Wise Partners support you with your SCA licencing application?

Obtaining a Securities and Commodities Authority (SCA) license involves navigating a complex regulatory landscape, meeting stringent requirements, and demonstrating compliance with various legal and financial standards.  Reg Wise Partners can support you in this process:

• Project management of licencing application

We provide full project management of your application.  We assist you in preparing the business plan, populating the SCA portal, gathering the required documentation that must be submitted to SCA and where required liaise with SCA.  Reg Wise provides you with the knowledge and expertise of the process.

• Policies & Procedures

We understand the various policies and procedures required for SCA submission.  Reg Wise can prepare all documentation and work with you to tailor accordingly to your intended business model and regulatory requirements.

• Financial Projections

We work with you to understand your business and your forecasts and prepare financial projection in accordance with SCA requirements, allowing you to prepare your financial resources accordingly.

 

For further information, please contact:

[email protected]
www.regwisepartners.com

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About Reg Wise Partners

Reg Wise Partners is an owner-operated, ADGM incorporated business. We place our clients at the forefront of everything we do. Our commitment lies in delivering tailored solutions to meet our clients’ needs and fostering a sense of value and appreciation in every engagement.

At Reg Wise, we offer comprehensive support in:

• Regulatory authorisation applications
• Outsourcing of mandatory functions
• (Compliance Officer / Money Laundering Reporting Officer / Finance Officer).
• Regulatory advice and guidance
• Regulatory remediation support as an approved Skilled Person
• Accountancy and bookkeeping
• Company incorporations
• Visa applications

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