UAE Central Bank pursues single rulebook for financial services

Dubai-based Marie Chowdhry and Jessa White of Pinsent Masons said the plans, set out by the Central Bank of the UAE (CBUAE) during a briefing to market participants last week, should make it easier for firms to understand – and comply with – their regulatory obligations.

During the briefing, attended by Pinsent Masons, the CBUAE confirmed that it intends to consolidate nine existing activity-based regulations into one rulebook. The nine regulatory areas are: retail payment systems; large-value payment systems; retail payment services and card schemes; open finance; payment token services; stored value facilities; exchange businesses; finance companies; and crowdfunding.

As part of the harmonisation exercise, the CBAUE plans to review and update these rules.

The CBUAE has framed the project around three core objectives: establishing a clear regulatory policy position and framework capable of capturing evolving business models; improving clarity for applicants, including enabling firms to better self‑assess their regulatory position; and delivering enhanced and harmonised regulations anchored in a unified regulatory rulebook.

The initiative forms part of a wider effort to simplify licensing and ongoing regulatory compliance for fintechs and financial institutions in the UAE, according to Chowdhry and White, who cited broader reforms including the introduction of a digital lending licence to support micro finance, increased coordination with the Dubai Virtual Assets Regulatory Authority (VARA) for the use of foreign stablecoins in the market, and biometric digital payments forming part of the overall picture.

The move to a single rulebook is not expected to lead to new requirements being imposed on fintechs and financial institutions, the CBUAE has indicated, but Chowdhry and White said new regulatory categories are anticipated, which may result in some activities being subject to registration rather than licensing.

“The CBUAE’s harmonisation initiative represents a material step towards a more coherent and proportionate regulatory framework for payments, fintech and digital finance firms operating in the UAE,” said Chowdhry. “The consolidation of multiple activity related regimes into a single rulebook is intended to reduce regulatory overlap and improve clarity, particularly for firms whose activities span across multiple activity-based regulations.”

“From a commercial perspective, confirmation that the harmonisation exercise is not expected to impose additional requirements on existing firms provides a degree of certainty for incumbents. At the same time, the introduction of new regulatory categories and registration-based models for certain activities signals an approach to regulation which may benefit newer or more specialised business models,” she said.

During the briefing, the CBUAE indicated that it will hold public consultations on the move to a single rulebook, which Chowdhry and White said would give market participants, including licensed institutions and fintechs, a chance to contribute to how the revised framework is developed.

White said: “The inclusion of payment token services and the anticipated relaxation of Dirham stablecoin rules within the consolidated framework also underline the Central Bank’s intent to streamline the use of stablecoin payments into the regulated payments ecosystem.”

“Firms should monitor the forthcoming consultation process closely, assess how their current and planned activities align with the revised regulatory perimeter, and consider engaging early with the CBUAE to ensure their licensing and compliance strategies remain aligned as the framework develops,” she added.