FiveComply is a global consultancy group with local presence in Cyprus, Dubai, Seychelles and Mauritius, specialising in international licensing, setting up corporate/group structures, and operations of Investment Firms, Crypto Asset Service Providers, E-Gaming, Payment Institutions / EMIs and Investment Funds with a specific focus on regulatory compliance matters. FiveComply Group provides comprehensive solutions in forex, crypto, EMI and fund licensing across various offshore and European jurisdictions.
In this interview, we will hear from Gabriel Styllas, the CEO of FiveComply Group, as he provides valuable insights into the UAE Securities and Commodities Authority (SCA) License. We will explore its key characteristics and discuss the growing popularity of the UAE SCA license in today’s financial landscape.
Q1: Why FiveComply decided to expand in Dubai?
FiveComply Group has been among the market leaders in the licensing and regulatory compliance sector for over 20 years, providing clients with tailored roadmaps to navigate the best jurisdictions for their licensing needs. We assist our clients not only in obtaining licenses but also in establishing efficient organizational structures.
We consider the UAE Securities and Commodities Authority (SCA) as a highly credible regulatory body, and we believe that the UAE SCA license is the most suitable option for brokers aiming to serve clients in the UAE. Given the significant demand for the UAE SCA license, we made the strategic decision to invest in the region by establishing FiveComply offices. This expansion allows us to better assist our clients who are interested in obtaining the UAE SCA license.
Q2: How can you acquire a license in the UAE Under SCA Regulations via FiveComply?
The Securities and Commodities Authority (SCA) is the primary financial regulatory body in the UAE, responsible for overseeing the securities, commodities, and financial services sectors. Established to enhance market transparency and investor confidence, the SCA enforces strict compliance with international financial standards. Its role includes licensing and supervising financial service providers, setting regulatory frameworks, and ensuring adherence to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) requirements.
As the UAE continues to solidify its position as a global financial hub, the SCA plays a crucial role in fostering a stable and competitive investment landscape. Financial service providers looking to operate in the country must obtain an appropriate license from the SCA, ensuring compliance with regulatory requirements tailored to different financial activities.
FiveComply assists clients in acquiring their SCA Licence. Our team reviews and advises on the corporate structure, the proposed directors and shareholders CVs and KYC/DD documentation and prepares all the manuals and the Company’s Business Plan according to each client’s business model. Once the application is submitted to the SCA for examination, FiveComply responds to all the queries raised with the SCA and follows-up on a constant basis to ensure a smooth and prompt coordination in regard to each application.
Q3: What are the different SCA License Categories?
SCA offers different licensing categories depending on the nature of financial services. These include:
- Category 1 – Dealing in Investments as Principal: Covers firms engaged in proprietary trading and investment activities.
- Category 2 – Dealing in Investments as Agent: Suitable for firms facilitating transactions between buyers and sellers without taking principal risk.
- Category 3 – Asset Management: Designed for firms managing investment portfolios on behalf of clients.
- Category 4 – Custody: Encompasses firms responsible for safekeeping and administration of financial instruments.
- Category 5 – Arranging and Advice: Focuses on financial consulting, advisory, and promotional activities without direct handling of client funds.
Each category has distinct requirements related to capital, compliance, and operational structure, ensuring that financial services in the UAE adhere to global standards.
Q4: Why Is Category 5 Important for Financial Service Providers?
Securing a Category 5 license under SCA offers significant advantages, such as:
- Regulatory Credibility: Operating under SCA regulation enhances trust and transparency, making firms more attractive to investors.
- Market Access: Enables firms to provide financial consulting and advisory services within the UAE’s expanding financial sector.
- Investor Protection: Ensures compliance with Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) regulations, strengthening the financial ecosystem.
- Business Growth: Firms can establish themselves as reputable financial consultants, helping clients navigate investment opportunities.
Q5: What Are the Requirements to Apply for an SCA Category 5 License?
To apply for a Category 5 license, businesses must meet specific regulatory and operational requirements set by the SCA:
- Legal Entity Establishment: The applicant must be incorporated in the UAE, either as a local entity or within a recognized free zone, provided the free zone law permits such activity.
- Qualified Management Team: The firm must appoint:
- A Head or Manager of the Category
- A Head of Compliance
- Physical Office Presence: A fully operational office within the UAE is mandatory, with local staff hired to manage key functions such as compliance, risk management, and operations.
- Minimum Capital Requirements:
- The paid-up capital must be no less than AED 500,000.
- Compliance with AML & CFT Regulations: Firms must implement stringent AML/CFT policies, conduct customer due diligence, and report suspicious transactions to regulatory authorities.
- Technology and Security Standards: Firms must ensure their platforms have robust cybersecurity measures, data protection policies, and secure transaction processing systems.
Q6: What Services Can a Licensed Financial Service Provider Offer?
Under the SCA’s regulatory framework, a licensed financial service provider under Category 5 may offer a variety of services, depending on the scope of their license. These services include:
- Financial Consulting
- Financial Advisory (Issuance Manager)
- Listing Advisory
- Introducing
- Promotion
Q7: Focusing on Promotion and Introduction Services
Among the available services under Category 5, Promotion and Introduction are the most common choices for companies due to their significant role in financial services expansion and client acquisition.
- Promotion: This activity involves marketing and promoting financial products or investment opportunities to potential clients. Firms engaging in promotion act as intermediaries, ensuring that financial products reach the right investors while adhering to regulatory guidelines. Companies focusing on promotion must appoint a Promotion Manager to oversee compliance and strategic outreach.
- Introduction: This service allows firms to introduce clients to financial institutions, investment firms, or other financial service providers. Unlike advisory services, firms conducting introductions do not provide direct financial guidance but facilitate connections between potential investors and service providers. No specific job title is mandated for this role, offering firms flexibility in structuring their operations.
Q8: How Long Does the Licensing Process Take?
The SCA licensing process typically takes 4-6 months, depending on the completeness of the application and compliance with regulatory requirements. The application process includes:
- Pre-Application Consultation: Meeting with the SCA to discuss business models and regulatory expectations.
- Submission of Application: Providing detailed business plans, compliance policies, and financial documentation.
- Regulatory Review: The SCA assesses the application, including a due diligence review of company directors and key stakeholders.
- Approval and Licensing: Upon successful evaluation, the applicant is granted an SCA Category 5 license to operate as a financial consulting and advisory provider.
Q9: The Future of Financial Consulting Regulations in the UAE
The UAE has positioned itself as a global leader in financial services and investment advisory. With regulations evolving rapidly, businesses operating in the sector must remain vigilant and adaptable to new compliance requirements. The regulatory acceptance of financial consulting services is a strong indicator of the government’s commitment to fostering a secure and innovative financial environment.
Q10: How FiveComply can Assist in Obtaining an SCA Financial Consulting and Advisory License?
Our team specializes in regulatory compliance and licensing for financial service providers in the UAE. We offer end-to-end support, including:
- Guidance on SCA licensing requirements and business structuring.
- Preparation and submission of regulatory applications.
- AML and compliance framework implementation.
- Ongoing compliance monitoring and reporting support.
If you are considering establishing a financial consulting or advisory business in the UAE, reach out to us for expert assistance in navigating the SCA’s licensing process and regulatory framework.
You can reach us at info@fivecomply.com for any information you might need, we are happy to provide further information, arrange a call or a face-to-face meeting!