UAE mulls creation of single financial services regulator to replace IA and SCA

Financial services expert Tom Bicknell of Pinsent Masons, the law firm behind Out-Law, said the move would be significant if completed.

“Multiple regulators often create a maze of procedures and requirements for firms to comply with. These can overlap and even conflict with each other. Coordination between regulators is often hard, and can create so-called 'turf wars', which can stifle competition and innovation across the sector,” Bicknell said.  "The financial services industry in the UAE is growing at a fast rate and the merger of these two regulators means there is the potential for innovative organisations to offer a variety of different financial products in insurance and wealth management." 

The UAE Ministry of Justice issued a ministerial resolution announcing the plans in late September, and has since established a 10-member committee including members of the SCA, the IA, and other bodies such as the Ministry of Finance and the Ministry of Justice to prepare the necessary legislation.

The committee is also tasked with examining the implications of the proposed merger. It has until the end of March 2020 to complete its work.

The merger is expected to improve communication between the regulatory authorities in the country.

In making the proposal, the UAE is following in the footsteps of other countries across the Middle East in terms of merging regulators. For example, Bahrain’s Central Bank became the country’s insurance regulator in 2002, whilst the Saudi Arabian Monetary Authority has regulated the insurance sector since 2004.