On June 10, 2025, the Dubai Financial Market (DFM) issued a new circular announcing the adoption of updated rules to regulate margin trading through licensed financial institutions. This step, made in cooperation with the Securities and Commodities Authority (SCA), aims to enable investors to access financing facilities in an organized and secure manner, thereby enhancing market liquidity and ensuring effective risk management practices.
According to the new rules, market members are allowed to offer margin trading services to their clients provided that the financing is issued by a licensed financial institution and that a tripartite agreement is signed between the member, the client, and the financial institution. The rules also include detailed provisions regarding the obligations of members and financial institutions, including ensuring licensing, opening dedicated accounts, submitting detailed reports, and safeguarding the rights of all parties.
Article (13.12) emphasizes the need to clarify trading mechanisms, determine margin ratios and commissions, and ensure the financial institution’s right to use securities as collateral. Meanwhile, Article (14.12) outlines the responsibilities of financial institutions, such as providing the initial margin, appointing a legal representative, and identifying securities eligible for margin trading.
These amendments represent a significant step toward a more flexible and secure investment environment and pave the way for greater innovation and transparency in the UAE’s capital markets.
