UAE Market Regulator Plans an Investor Protection Fund and New Private Placement Rules: What Founders Raising Capital Should Know

DUBAI — The UAE’s capital markets regulator wants more family businesses and small and medium-sized companies to raise money through the markets, and it is drafting the rules to make that possible. The Capital Market Authority (CMA) is developing resolutions to regulate private placements of securities by private joint stock companies and businesses operating in free zones, its chief executive Waleed Saeed Al Awadhi told Khaleej Times in an interview published on November 3. The regulator is also planning an Investor Protection Fund.

For founders, the private placement work is the part to watch. It points to a more formal route to raise capital for companies that have outgrown friends-and-family money but are nowhere near an IPO.

What the CMA Said

According to Khaleej Times, the CMA’s plans include:

• An Investor Protection Fund, plus new safeguards for “exceptional market circumstances” and better complaints, appeals and amicable settlement procedures.
• Private placement rules for private joint stock companies and free zone businesses. The newspaper reported that the measures “would broaden financing options for companies that may not yet be ready for a public listing, subject to final approval and implementation.”
• A framework for retail and fractional sukuk, which could let residents access fixed-income investments with smaller amounts.
• Draft regulations by the end of 2026 covering systemically important entities, the division of public joint stock companies and instant licensing.
• A 2027 review of rules on securities offerings and issuers, including foreign issuers, and the types and classes of securities that can be issued.

Al Awadhi said: “For family businesses and SMEs, the objective is to provide appropriate pathways to capital market financing while ensuring companies are prepared for the responsibilities of public ownership.”

The CMA named investor protection, broader market access and digital transformation as its three priorities for 2027.

The Enforcement Side

The same interview gave a picture of how the regulator is policing the market. In the first nine months of 2026, the CMA imposed Dh12.9 million in financial penalties, ran 224 investor awareness activities, registered 88 new financial influencers (taking the total to 198 by the end of September) and refunded about Dh1.2 billion to clients, Khaleej Times reported.

“The objective is to deter misconduct and protect investors, rather than simply increase the number of penalties imposed,” Al Awadhi said.

Why This Builds on Earlier Reforms

The CMA itself is new. The Securities and Commodities Authority was reconstituted as the Capital Market Authority with effect from January 1, 2026, under Federal Decree-Law No. 32 of 2025 and Federal Decree-Law No. 33 of 2025, according to a client alert from law firm Latham & Watkins. The firm noted that the new regime extends the CMA’s reach to financial activities in free zones, including DIFC and ADGM, with a transition period for compliance until January 1, 2027, and raises maximum administrative fines to AED 200 million for serious violations. The regulator’s official site is uaecma.gov.ae.

Company law has also been moving in the same direction. Under amendments to the Commercial Companies Law, explained at a Ministry of Economy and Tourism briefing in January, the lock-in period for private joint stock companies was cut from two years to one, and such companies are exempt from it when carrying out a private placement in financial markets, Khaleej Times reported. The amendments also introduced drag-along and tag-along rights and let free zone companies operate across the country through branches.

Taken together, the pieces point towards a system where a growing company can restructure, bring in outside investors under clear rules and, later, list.

What Founders Should Take From It

This is our reading, not legal advice.

• Nothing changes yet. The private placement rules are still being developed and need final approval. Do not plan a raise around them until they are published.
• Know your legal form. The proposed rules refer to private joint stock companies and free zone businesses. Many founders operate as LLCs. If structured outside investment is part of your plan, ask your adviser whether, and when, converting makes sense.
• Governance is the price of entry. The CMA’s message is that access to capital comes with disclosure and governance standards. Audited accounts, a functioning board and clean shareholder records will matter well before any placement.
• Family businesses have a new option to consider. For family-owned companies that want growth capital without a full listing, a regulated private placement could become a middle path. Pair this with succession planning.
• Be careful how you talk about your raise. The CMA registers financial influencers and says it is stepping up oversight of misleading disclosures and investment fraud, so get advice before marketing investment opportunities publicly, especially across free zone and onshore lines.
• Watch the end-of-year drafts. The CMA is targeting draft regulations by the end of 2026, including instant licensing. Consultations may give founders and investors a chance to comment.

Details are from Khaleej Times, the Capital Market Authority and Latham & Watkins as of November 4, 2026. Proposals described here are not final. Consult a licensed adviser before acting.