UAE’s Securities and Commodities Authority Cracks Down on Insider Trading: A Legal Perspective

Overview

Dubai, UAE - The UAE Securities and Commodities Authority (SCA) has been ramping up its efforts to combat insider trading and market manipulation practices in the UAE financial market. These initiatives are significant as the market matures and attracts international investors.

Insider Trading and the Law

Insider Trading: Buying or selling securities based on material, non-public information is considered insider trading.
Penalties: Individuals face imprisonment and/or fines, while corporations may face additional penalties (Article 222, UAE Penal Code).

SCA’s Initiatives

Circular No. 9/R.M of 2022: A reminder of obligations to comply with UAE’s Market Law and insider trading regulations.
Strengthening Regulatory Measures: Exchange initiatives include insider trading awareness campaigns and new technologies.

Global Regulatory Focus on Insider Trading

HSBC Fine: The UK’s Financial Conduct Authority (FCA) fined HSBC £140 million ($181 million) for allowing insider trading.
Global Regulators: Regulators worldwide have been increasing their focus on insider trading.

New SCA Rules on Market Conduct

New Rules: Issued in February 2022 with provisions related to insider trading, market manipulation, and disclosure requirements.
Stricter Penalties: Introduces stricter penalties for market misconduct.

Conclusion

Market Participants: Should review and strengthen insider trading prevention programs.
Benefits: Essential for the development and success of the UAE financial market, driving economic growth.
Investor Trust: Demonstrates SCA’s commitment to building a strong and transparent financial market.