The Securities and Commodities Authority regulates financial markets in mainland UAE - everywhere outside the Dubai International Financial Centre (DIFC). The SCA licenses brokers, exchanges, and clearing houses under UAE federal law, while the DFSA handles the DIFC zone separately. This split matters for forex traders because an SCA license and a DFSA license are two completely different things.
SCA-licensed brokers operate under UAE federal regulations. The SCA introduced new forex and CFD trading regulations in 2020, requiring brokers to hold a specific license for derivative trading, maintain minimum capital, and segregate client funds. But enforcement has lagged behind legislation. The SCA has issued multiple rounds of warnings against unlicensed brokers targeting UAE residents, but actual license revocations and fines against forex firms remain rare compared to tier-1 regulators.
For traders, the main appeal of an SCA license is local presence - SCA-licensed brokers typically have physical offices in mainland UAE and operate in Arabic with local bank accounts. There is no statutory compensation fund for forex traders, no leverage caps comparable to ESMA, and the SCA's complaints process can be slow. Traders in the UAE who want stronger protections should look for a DFSA-licensed broker in the DIFC or an FCA/Australian-regulated broker with a UAE office.
Leverage Limits
The SCA does not impose statutory leverage caps. Brokers typically offer 50:1 to 500:1 depending on the instrument and client classification.
| Instrument | Max Leverage |
|---|---|
| Major currency pairs | 100:1 to 500:1 (broker discretion) |
| Minor and exotic currency pairs | 50:1 to 200:1 (broker discretion) |
Trader Protections
- 2020 regulations require client fund segregation for licensed brokers
- Minimum capital requirements exist but are not publicly disclosed per category
- SCA issues public warnings against unlicensed brokers targeting UAE residents
- Local presence requirement - licensed brokers must have a physical UAE office
- No investor compensation fund for forex or CFD traders
How to Verify a License
- Visit the SCA website at sca.ae and navigate to the licensed entities directory
- Search by broker name in Arabic or English
- Confirm the license covers derivative/forex trading - not just general securities
- Check the broker's registered address is in mainland UAE (not DIFC)
Complaints & Disputes
SCA Investor Complaints - www.sca.ae
The SCA accepts complaints against licensed entities and can mediate disputes. But the process is administrative, not judicial - the SCA can impose fines but cannot award compensation. If a broker is insolvent, there is no statutory fund to cover client losses.
Brokers Regulated by SCA
- Plus500
- MultiBank
Frequently Asked Questions
- What's the difference between SCA and DFSA regulation?
- SCA regulates brokers in mainland UAE. DFSA regulates brokers in the Dubai International Financial Centre (DIFC). They are separate regulators with different rules and different legal systems. An SCA-licensed broker operates under UAE federal law. A DFSA-licensed broker operates under DIFC law (based on English common law). If a broker says 'regulated in the UAE' without specifying which regulator, ask which one and verify it on the relevant register.
- Can SCA-licensed brokers accept non-UAE clients?
- Most SCA-licensed brokers target UAE residents and the GCC market, and many accept international clients as well. But the SCA's regulatory protections - such as they are - apply to the firm, not to the client's location. If your account is held with an SCA-licensed entity, you fall under SCA rules regardless of your country of residence. Just be aware that SCA protections are modest compared to EU or UK standards.
- Is my money safe with an SCA-licensed broker?
- Safer than with an unlicensed broker - the 2020 regulations do require client fund segregation and minimum capital - but there is no compensation scheme, and enforcement has a limited track record. In a broker insolvency, recovering your funds would depend on whether client money was properly segregated and how liquidation proceeds under UAE law. If broker safety is your priority, a DFSA-licensed broker or an FCA-regulated broker providing services in the UAE offers stronger protections.