President His Highness Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree Legislation No. (6) of 2025, relating to the Central Financial institution, and the regulation of monetary establishments and actions and insurance coverage actions.
The Federal Decree Legislation is a part of UAE’s steady efforts to streamline the legislative and supervisory frameworks of the monetary sector, improve its stability and competitiveness and align the UAE’s monetary ecosystem with the very best worldwide requirements. It’s set to strengthen the Central Financial institution’s independence and very important position in guaranteeing monetary and financial stability.
The Federal Decree Legislation goals to keep up the steadiness of the nationwide forex, promote and shield the steadiness of the monetary system, and guarantee prudent administration of the Central Financial institution’s international reserves.
It defines the principal capabilities of the Central Financial institution of the UAE, primarily to ascertain and implement financial coverage, organise and supervise licenced monetary actions according to worldwide requirements, and concern acceptable laws and requirements to make sure prudent and efficient monetary practices.
The Central Financial institution can be tasked with managing international reserves to cowl the financial base, supporting sustainable financing practices whereas integrating governance ideas, monitoring and analysing regulatory dangers, and growing and overseeing the infrastructure of monetary markets.
By way of buyer safety and monetary inclusion, the Federal Decree Legislation maintains that licenced monetary establishments shall present all group members with entry to correct banking and monetary companies, according to digital transformation and monetary service innovation efforts.
It establishes frameworks for the launch of nationwide consciousness campaigns, in collaboration with the monetary sector and group outreach entities.
The Federal Decree Legislation reaffirms beforehand established optimistic practices when it comes to aligning credit score services with prospects’ earnings, to be able to shield them from irresponsible practices.
It enhances the system of client safety and dispute decision by unifying the complaints course of for purchasers of banks and insurance coverage corporations below the unbiased entity “Sanadak”, liable for receiving and settling complaints. It additionally gives for the institution of specialized judicial committees to adjudicate disputes arising from monetary actions, with the committees’ choices being ultimate and enforceable towards licenced monetary establishments for quantities as much as AED100,000.
The Federal Decree Legislation outlines proactive measures for early intervention to deal with any indicators of monetary deterioration of a licensed establishment to be able to guarantee monetary stability and safety of consumers.
These measures embody implementing restoration plans, imposing extra capital and liquidity necessities, making adjustments to the involved establishment’s enterprise technique, organisational and operational constructions, appoint an interim committee or instantly takeover the administration of the establishment, take steps for the merger, acquisition or liquidation of the involved establishment if obligatory, and apply particular measures on insurance coverage corporations failing to take the steps wanted to rectify their place.
In keeping with the Federal Decree Legislation, the Central Financial institution, because the “Decision Authority”, performs a key position in managing monetary crises. It has the facility to take away and appoint the administration of monetary establishments, and get better monies from accountable individuals.
It additionally has the facility to nominate guardians tasked with managing the establishment and its property, terminate or shut out contracts, switch or promote property and obligations, override rights of shareholders, restructure the capital, set up non permanent entities to handle property or proceed offering key companies, perform an organised liquidation or bailout to make sure the continuity of important capabilities.
By way of administrative penalties, the Federal Decree Legislation stipulates elevating the ceiling for administrative fines to be commensurate with the gravity of the violations and the quantity of transactions. It permits the Central Financial institution to impose a proportional fantastic not exceeding ten occasions the worth of the violation or unjust enrichment. The imposed fines shall be mechanically debited from accounts of the violating individual, held with the Central Financial institution or with any licenced monetary establishment.
The Central Financial institution might attain a reconciliation with the violating individual, earlier than a ultimate judicial choice is made, and it could publish choices associated to such penalties on the official web site of the Central Financial institution, to boost market transparency and self-discipline.