SCA Introduction of Anti-Money Laundering Provisions: Key Amendments and Impacts

The United Arab Emirates (“UAE“) Securities & Commodities Authority (the “SCA”) recently issued an amendment to the SCA’s Booklet of the Rules of Financial Activities and the Status Rectification Mechanisms (the “SCA Rulebook”). This amendment, issued in accordance with the decision of the Chairman of the Board of Directors of the SCA (No. 44/R.M) on 28 December 2023 and is yet to be published in the Official Gazette and will become effective from the date of publication (“Rulebook Amendment”).

The Rulebook Amendment introduces a fifth section to the existing four sections of the SCA Rulebook focused on anti-money laundering measures as well as combating the financing of terrorism and financing of unlawful organisations.

Key Amendments

Prior to the Rulebook Amendment, the main sources on anti-money laundering and on combating the financing of terrorism or unlawful organisations for SCA regulated entities was governed by the UAE AML Federal Law and the AML Implementing Regulation. However, there has consistently been anticipation for the SCA to issue more specific AML rules tailored to align with the activities regulated by the SCA similar to approaches taken by other regulators. The Rulebook Amendment applies to entities that are or would be subject to the SCA regulatory supervision . SCA regulated entities would currently need to consider the Rulebook Amendment to ensure full compliance.

Direct Impacts

The impact of the Rulebook Amendment is envisioned as follows:

(a) SCA-licensed entities: such entities would need to review and amend, if required, their internal AML and compliance policies to ensure compliance with the Rulebook Amendment.

(b) Entities with ongoing licensing application with SCA: such entities’ applications and documents will be reviewed by the SCA to ensure that their internal policies are compliant with the Rulebook Amendment. Where such internal policies require amendment, the entities will be informed of the same by SCA.

How can we help?

As a firm well-versed in financial regulations, Al Tamimi & Company offers the necessary expertise to navigate these changes.

For further information, please contact Divya Abrol Gambhir or Ali Awad below.