By Staff Reporter
Investor warnings about fraudulent firms posing as legitimate financial institutions are increasing across the UAE, prompting regulators to urge the public to verify companies before investing.
Recently, the Capital Market Authority (CMA) cautioned investors against dealing with firms without first confirming their licensing status. Earlier this month, on February 2, the regulator issued a public alert against an unlicensed marketing company and advised residents not to engage in any business with it.
In the UAE, any entity offering investment services, managing funds, or marketing financial products must be properly licensed. The CMA — formerly known as the Securities and Commodities Authority — oversees securities and capital market activities on the mainland and has strengthened investor protections under updated federal decree-laws.
As scams become more sophisticated, authorities are encouraging investors to take proactive steps to protect themselves.
Verify Through the Official Register
The first and most critical step is checking whether a firm is licensed.
The CMA provides a public register on its official website listing authorised brokers, investment managers and financial advisers. Before transferring money or submitting personal documents, investors should confirm that the company’s name, licence number, and contact details match exactly with the regulator’s records.
Fraudsters often mimic legitimate firms by making slight changes to names — adding words like “Global” or “International,” or altering spellings and domain names. Even small discrepancies in email addresses or website links can signal impersonation.
Know the Correct Regulator
Different financial activities fall under different regulators in the UAE, and each authority maintains its own searchable database.
While the CMA supervises mainland securities activities, firms operating in financial free zones are regulated separately:
- Companies in the Dubai International Financial Centre are regulated by the Dubai Financial Services Authority (DFSA).
- Firms in the Abu Dhabi Global Market fall under the Financial Services Regulatory Authority (FSRA).
- Banks, finance companies, insurance providers and certain payment service providers are licensed by the Central Bank of the UAE.
- Virtual asset businesses in Dubai, excluding the DIFC, are overseen by the Virtual Assets Regulatory Authority (VARA).
Investors should always verify licensing directly through the relevant regulator’s official website rather than relying on documents or links sent by the company itself.
Watch for Red Flags
Unlicensed firms frequently use high-pressure tactics and promise guaranteed or unusually high returns. UAE law prohibits misleading financial promotions and unauthorised investment activities.
Be cautious of:
- “Risk-free” or guaranteed profit claims
- Time-limited offers demanding immediate action
- Cold calls or unsolicited WhatsApp messages
- Social media ads pushing exclusive investment deals
- Requests to transfer funds to personal accounts, overseas accounts unrelated to the licensed firm, or cryptocurrency wallets
Investors should also avoid downloading unfamiliar trading apps without verifying the provider’s credentials.
Report Suspicious Activity
Regulators encourage residents to report suspected scams or unauthorised financial activities promptly. Early reporting helps authorities issue public warnings, investigate misconduct, and protect other investors from potential losses.
With fraudulent schemes evolving rapidly, verifying licensing and exercising due diligence remain the strongest safeguards for investors in the UAE.
