UNITED ARAB EMIRATES Law and Practice Contributed by: Francesco Bulleri, Beshoy Mounir, Sultan Bahriddini and Noora Al Doseri, ADG Legal
the UAE capital markets framework, the Corporate Governance Guide for Public Joint Stock Companies, and the listing, disclosure and market conduct rules of the relevant exchange. The capital markets framework was materially updated by Federal Decree-Law No 32 of 2025 concerning the CMA and Federal Decree- Law No 33 of 2025 concerning the regulation of the capital market, both of which entered into force on 1 January 2026. The principal governance requirements for listed pub - lic joint stock companies include requirements relat - ing to board composition, board election, independ - ence, non-executive directors, board committees, board meetings, conflicts of interest, related-party transactions, internal controls, risk management, external auditors, shareholder meetings, shareholder rights and disclosure. The board is responsible for the company’s strategic direction, supervision of execu - tive management, protection of shareholders’ rights, approval of internal control and risk management frameworks, and compliance with applicable laws and regulations. Listed companies are also required to establish board committees – inter alia, an audit committee and a nomination and remuneration committee. The audit committee typically oversees financial reporting, external audit, internal audit, risk management, inter - nal controls and related-party transaction review. The nomination and remuneration committee generally addresses board nominations, board composition, remuneration policy and related governance matters. Disclosure is a central component of the listed-com - pany governance regime. Listed companies must: • publish periodic financial information and positions; • disclose material information to the market; • comply with rules on insider dealings and related- party transactions; and • prepare annual corporate governance reports. The Governance Guide also requires transparency around board and senior management matters, com - mittee activities, remuneration, major shareholders, internal controls and risk management.
These requirements are generally mandatory for public joint stock companies within scope. The UAE frame - work is therefore more prescriptive for publicly listed companies than for private companies. Private com - panies may voluntarily adopt enhanced governance arrangements, such as board committees, reserved matters, independent directors or formal internal con - trol frameworks, but these are generally contractual or sector-specific rather than general mandatory require - ments. 1.4 Stock Exchange Requirements Developments There have been recent developments affecting the UAE corporate governance and capital markets framework. The most significant recent development is the enactment of Federal Decree-Law No 32 of 2025 concerning the CMA and Federal Decree-Law No 33 of 2025 concerning the regulation of the capi - tal market. These laws took effect on 1 January 2026 and replaced the former federal securities framework under Federal Law No 4 of 2000. The CMA is the legal successor to the former Securities and Commodities Authority (SCA), and references to the SCA in legisla - tion are replaced with references to the CMA. These reforms are relevant to corporate governance as listed companies, issuers and market participants now operate under a revised statutory capital mar - kets framework. The new regime is expected to affect regulatory supervision, market conduct, offerings, licensing, disclosure and enforcement. From a gov - ernance perspective, listed companies should ensure that their board and compliance functions monitor the transition from the former SCA framework to the new CMA framework and assess whether existing policies, market disclosure procedures and compliance manu - als require updates. A further important development was the 2024 amendment to the Corporate Governance Guide through SCA Board Decision No 2/RM of 2024. The amendments came into effect in January 2024 and focused on strengthening internal controls, gov - ernance structure, reporting and compliance. They increased the emphasis on board responsibility for effective risk management and internal control sys -
697 CHAMBERS.COM
Powered by FlippingBook