Federal Law No.(4) OF 2000 Concerning The Emirates Securities & Commodities Authority And Market (economy and business law)

Article (1) Definitions  
In the application of the provisions of this law, the words and expressions hereunder shall have the meanings set forth opposite each of them, unless the context of the provision 
indicates otherwise:  
The State : The State of the United Arab Emirates.  
The Ministry : The Ministry of Economy & Commerce.  
The Authority : The Securities & Commodities Authority.  
The Chairman of the Board : The Chairman of the Board of Economy & Commerce.  
The Board : The board of directors of the Authority.  
Market : A securities and commodities market licensed in the State by the Authority.  
Securities : Shares, bonds and notes issued by joint stock companies, bonds and notes issued by the Federal Government or Local Governments, public authorities and public 
institutions in the State, and any other domestic or non- domestic fina ncial instruments 
accepted by the Authority.  
Commodities : Agricultural produce and natural resources extracted from under the ground 
and the seas after being processed and prepared for commercial use.  
Broker : A juristic person authorized pursuant to the provisions of this Law to conduct 
brokerage business in the Market.  
Broker's Representative : A natural person appointed by a Broker to conduct on its behalf 
brokerage business in transactions relating to Securities and Commodities.  
  
Part One Securities &  Commodities Authority 
  
Chapter One The Incorporation of the Authority, its Objects and its Powers

Article (2)  
A public authority shall be established in the capital of the State under the name of  
 "Securities and Commodities Authority" which shall have a legal personality, financial and 
administrative independence in addition to supervisory and executive authorities 
necessary to exercise its duties subject to provisions of this Law and regulations issued for 
the execution of such law. This Authority shall follow the Cabinet.  
The Authority shall be entitled to establish branches or offices for it to manage duties of 
supervision and control over markets.  
The Authority shall be prohibited to exercise businesses, to have any private interest in any 
project, to own or issue any securities.

Article (3)  
The Authority shall have as its purpose the achieving of the following objects:  
1 - To provide the opportunity to invest savings and funds in Securities and Commodities in 
a manner that serves the interest of the na tional economy, secures the integrity and 
accuracy of transactions, ensures interaction of the forces of supply and demand in order to determine prices and protection of investors by establishing the bases for sound and just 
dealings between the various in vestors.  
2 - To develop investment awareness by conducting studies and presenting 
recommendations.  
3 - To work to secure financial and economic stability.

Article (4)  
First: In the achieving of its objects, the Authority may exercise the following powers:  
(1) To propose the regulations as to the following, to be issued by resolution of the Council of Chairman of the Boards:  
(a) Regulations concerning its functioning.  
(b) Regulations concerning the licensing and monitoring of the Market.  
(c) Regulations conc erning the acceptance, listing, and canceling or suspending the listing 
of any Securities or Commodities from being traded in the Market.  
(2) To make the following regulations, in consultation and coordination with the Markets 
licensed in the State:  
(a) Re gulations concerning the functioning of the Market.  
(b) Regulations concerning Brokers and the regulating of their functions and the cessation 
thereof.  
(c) Regulations concerning trading, clearance, settlement, transfer of ownership and 
custody of Securiti es.  
 (d) Regulations concerning membership of the Market.  
(e) Regulations concerning disclosure and transparency.  
(f) Arbitration regulations in disputes arising from trading in securities and commodities.  
(3) To form specialist technical committees, and to  specify the scope of their work and the 
remuneration therefor.  
(4) To be in contact with international markets in order to obtain and exchange information 
and know -how, and to join relevant Arab and international organizations and federations.  
(5) To perf orm all other acts which assist the achieving of the Authority's objects or the 
exercise of its powers pursuant to the law.  
Second: Markets licensed in the State may propose amendments they deem appropriate to the regulations provided for in this Article.

Article (5)  
The Authority shall, within the scope of the objects for which it has been established, enjoy 
the exemptions and facilities enjoyed by State institutions.  
  
Chapter Two The Organs of the Authority and their Competences

Article (6)  
The Authority shall have a Board of Directors that shall be formed upon a resolution issued by the Cabinet, provided that formation resolution shall nominate the Chairman of the 
Board, remunerations of board directors, way of its meetings and how to take i ts decisions.

Article (7)  
The Council of Chairman of the Boards shall determine the remuneration of the members of 
the Board.

Article (8)  
The membership period shall be four years, renewable once excluding the executive 
Chairman of the authority. If the se at of any member becomes vacant for any reason 
before the end of his period of membership, a successor shall be appointed for him, for the remaining period of office of the Board.

Article (9)  
Each member of the Board shall, forthwith upon assuming his duti es, make a declaration in  
 writing to the Authority as to the securities owned by himself, his spouse and minor 
children. He shall also make a declaration in writing as to any change occurring therein 
within one week at most from the date he becomes aware of the change.

Article (10)  
Any member convicted of an offence of dishonour or breach of trust or declared bankrupt shall forfeit his membership. Membership shall also be forfeit where a member fails to 
attend three consecutive meetings without acceptable e xcuse.

Article (11)  
The Board shall meet upon invitation by its Chairman or his deputy when he was absent at least four times annually, and whenever necessary.  
A written invitation including the agenda shall be sent in sufficient time prior to the date of 
the meeting.  
Board meetings shall be deemed valid if attended by the majority of the members thereof, provided that the Chairman or his deputy is amongst them. Its resolutions shall be issued 
with the majority of the votes of those present. In the case of an equality of votes, the winning side shall be that which includes the person chairing over the meeting.

Article (12)  
The Board of Directors shall exercise the following competences:  
1 - To ensure that the regulations mentioned in Article 4 of this Law ar e applied.  
2 - To receive notifications and complaints relating to the activity of the Market or Brokers 
and take appropriate resolutions thereon according to the provisions of this Law and the 
regulations issued pursuant thereto.  
3 - To require the Market  and Brokers to submit balance sheets, profit and loss accounts, 
and annual financial statements audited by an accredited auditor, within one month 
following the end of the financial year.  
4 - To require the Market to take the necessary measures for disclosure by the companies 
whose Securities are listed therein of any substantial developments occurring in such 
companies.  
5 - To ensure transparency and disclosure as prescribed in this Law an d the resolutions 
implementing it.  
6 - To issue the requisite resolutions concerning approval of membership of the Market and 
trading in securities and commodities in accordance with the provisions of this Law and the 
regulations issued pursuant thereto.  
7 - To undertake all other acts which assist the Board in achieving the objective of the  
 Authority.

Article (13)  
The Board shall submit a report to the Council of Chairman of the Boards on the Market's 
activities every six months.

Article (14)  
"The Authorit y shall have an administrative body set in place and organized by a resolution 
of the Board. The administrative body shall be headed by a full time chief executive with 
the degree of undersecretary and a number of deputy chief executives having the rank of  
assistant undersecretary, all of whom shall be appointed by a Federal Decree as per the suggestions of the Board. The regulations applicable to the Authority staff shall have effect 
in connection with them."  
  
Chapter Three The Authority's Financial Affai rs

Article (15)  
The Authority shall have an annual budget prepared by the Chief Executive and approved 
by the Board. Its fiscal year shall commence on first January and end at the end of 
December each year. Exceptionally, the Authority's first fiscal year shall commence on the 
date when this law comes into force and shall end at the end of the following fiscal year.

Article (16)  
First: The Authority's sources of income shall consist of the following:  
1 - Annual funds allotted to the Authority by the Federal  Government.  
2 - That which accrues to the Authority under the regulations provided for in this law from 
the following:  
a - Listing fees and annual fees levied on the companies and the Brokers in the Market.  
b - Fees levied on trading, and fees for the services rendered by the Market.  
c - Fines levied on Brokers and companies whose securities are listed for trading, and any 
other fines.  
Second: The Authority's properties shall be deemed public properties.

Article (17)  
The Federal Government shall bear the expenses of establishing the Authority.

Article (18)  
The Authority shall keep regular books of account in order to monitor its operations and 
reflect its true financial position in accordance with the bases of accounti ng employed in the 
State.  
The prior- control provisions prescribed in Federal Law No. 7 of 1976 aforesaid shall not 
apply to the Authority.

Article (19)  
The Authority shall have one or more auditors from amongst the statutory accountants 
entered on the roll  of practising auditors. Appointment, and the determining of fees, shall 
be by Board resolution passed annually.  
  
Part Two Securities and Commodities Market 
  
Chapter One Establishment and Administration of the Market

Article (20)  
1- Markets for trading i n Securities and Commodities shall be established in the State. Each 
Market shall be in the form of a local public establishment or a public joint- stock company 
licensed by the Authority. It shall be a prerequisite that Markets are reciprocally and 
electronically linked at State level.  
2- If the market took the form of local public establishment, it shall be administered by a 
board of directors constituted pursuant to a resolution promulgated by the competent local 
authority, provided that none of its membe rs is a member in the board of directors of a 
public joint stock company or a financial broker. The members of the board of directors of the Market shall be subject to the provisions of Article (10)
 herein.  
If the market took the form of public joint- stock company, the members of its board of 
directors shall be elected according to provisions of companies act and its bylaw.

Article (21)  
The Market's director general, his deputy, and each member of the Market, shall, forthwith 
upon assuming his duties, make a declaration in writing as to the securities owned by  
himself, his spouse and his minor children, as well as the holdings of himself and the 
holdings of his spouse and his minor children with any Broker. He shall also make a 
declaration in writing as to any change occurring therein within one week at most fr om the 
date he becomes aware of the change.

Article (22)  
The Market's board of directors shall exercise the following competences:  
1 - To appoint the Market's director general and his deputy.  
2 - To establish the organizational structure and the annexes th ereto, the internal 
regulations and all administrative rules and instructions.  
3 - To monitor on a daily basis the trading transactions in Securities and Commodities, so 
as to ensure justice as between transacting parties.  
4 - To present reports and data to the Authority and make the necessary press releases so 
as to ensure transparency of information and disclosure.

Article (23)  
Subject to the provisions of Article 16 of this Law, the Market shall be financed from the 
following sources:  
1 - Listing fees an d annual fees levied on companies and Brokers in the Market.  
2 - Fees levied on trading, and fees for the services rendered by the Market.  
3 - Any fines levied on Brokers or companies whose Securities are listed for trading.

Article (24)  
1 - All transactio ns in Securities listed in the Market shall be entered in its records.  
2 - An entity whose Securities are the subject of a transaction outside the Market shall 
notify it of the transactions in such Securities in accordance with the rules in force issued by  
the Board.  
3 - Any transaction in Securities listed in the Market not recorded according to the 
provisions of this Law and the regulations and resolutions issued in implementation thereof 
shall be null and void.  
  
Chapter Two Brokers

Article (25)  
Transact ing in the Securities listed on the Market shall be restricted to licensed brokers.

Article (26)   
 Licensed brokers and their representatives shall abide by the following:  
1- Compliance with the provisions of this Law and the regulations issued in implementation 
thereof, and all resolutions and instructions relating to the Market.  
2 - Refraining from any act such as to harm the reputation of the Market, its members or 
transa cting parties therein, or arranging or participating in any fictitious transactions not 
conducive to a true transfer of the Securities or funds which are the subject of the dealing.

Article (27)  
The board of directors of the Market may impose on Brokers an y of the following penalties:  
1 - A warning.  
2 - A monetary fine not exceeding one hundred thousand Dirhams.  
3 - Encashment of the bank guarantee in part or in full.  
4 - Suspension of the Broker from activity for a period not exceeding one week, and if the  
period of suspension exceeds one week, the matter shall be referred to the Authority to 
take action as it sees fit. 
5 - A recommendation to the Authority to remove the broker from the register of Brokers 
licensed in the Market.

Article (28)  
Decisions of t he Market's board of directors as to the penalties provided for in paragraphs 
1 and 2 of Article 27 of this Law may be appealed before the Authority within thirty days of 
notification.  
The Authority's decision on the appeal shall be final.

Article (29)  
Decisions as to the penalties provided for in paragraphs 3 and 4 of Article 27 and also the 
Authority's decisions for the removal of Brokers pursuant to this Law may be appealed 
before the competent court. In such cases the appeal shall be made within thirty days from 
the date of notification of the decision imposing the penalty.  
  
Chapter Three Clearing, Settlement, Transfer of Ownership and Custody

Article (30)  
The prices of Securities and Commodities shall be displayed in the Market in accordance 
with the r egulations issued pursuant to the provisions of this law, which regulations shall  
 include the procedures for selling, buying, clearing and settlement.

Article (31)  
The transfer of ownership of Securities in the Market, registration in its rec ords and custody 
shall be in accordance with the regulations issued pursuant to the provisions of this Law. 
The issuer of these Securities shall carry out the procedures on its side for transfer of 
ownership without delay.  
  
Chapter Four Supervision and In spection Procedures

Article (32)  
The Board may resolve, by a majority of its members present, temporarily to halt trading in the Securities Market, or in the shares of any company, or transactions in any Securities, upon the occurrence of exceptional circu mstances or that which threatens the proper and 
regular working of that Market.  
The Board may also resolve, by the same majority, to freeze, suspend or bring back into 
force any rules or regulations relating to the Market or any of its operations.  
  
Chapte r Five Disclosure and Transparency

Article (33)  
The Board may compel any person having a connection with activities in Securities, 
whether a natural or a juristic person, to make public or private disclosure, and to submit 
any information related to his ac tivity.  
In performance of its duties, it may also order the making of any investigation it deems 
necessary in applying the provisions of this law or the implementing resolutions it issues in 
relation thereto.

Article (34)  
Companies whose Securities have be en listed in the Market shall promptly furnish it with 
any information which affects the prices of these Securities, upon the same becoming 
available to them.  
The Market's board of directors shall have the right to publish such information in the local 
press and other media it deems appropriate.

Article (35)   
 Companies whose Securities have been listed in the Market shall publish, when so 
requested, any explanatory information which relates to their circumstances and activities 
and is such as to secure the i ntegrity of transactions and the confidence of investors.

Article (36)  
The furnishing of false information, statements or data such as to affect the market value of Securities and an investor's decision to invest or otherwise shall not be permitted.

Article (37)  
The exploitation of undisclosed information which could affect prices of Securities in order to achieve personal benefits shall not be permitted. Any dealing effected in contravention 
of this shall be null and void.

Article (38)  
It shall be perm itted for the chairman and the members of the board of directors of a 
company whose Securities are listed in the Market, and its general manager, or any of its 
employees, to effect dealings himself or through others in any transaction in the Securities 
of such company, subject to disclosure through the Market of the purchase or sale 
transaction, the quantities and prices therein, and any other information required by the Market, and the obtaining of the approval of its board of directors for the transaction . Any 
transaction not effected pursuant to such disclosure shall be null and void.

Article (39)  
It shall not be permitted for any person to deal in Securities on the basis of unpublicised or 
undisclosed information he acquired by virtue of his position.  
It shall not be permitted for any person to spread rumours regarding the selling or buying 
of shares. Nor shall it be permitted for the chairman and members of any company's 
management or its employees to exploit their inside information as to the company in  the 
purchase of shares or the sale thereof in the Market.  
Any transaction effected by any person in contravention of the provisions of the two preceding paragraphs shall be null and void.  
  
Part Three Penalties

Article (40)  
Any broker, or representative of his, or any employee or auditor in the Market, and any person concerned in the execution of Market operations, who fails to respect professional  
 confidentiality and secrecy of client names shall be liable to imprisonment and to a fine not 
exceeding one h undred thousand Dirhams, or to either of these penalties, this being in 
addition to the disciplinary penalties provided for in Article 27 of this Law.

Article (41)  
Any person who contravenes the provisions of Articles 36, 37 and 39 of this Law shall be 
liable to imprisonment for a period of not less than three months and not more than three 
years, and to a fine of not less than one hundred thousand Dirhams and not more than one million Dirhams, or to either of these penalties.

Article (42)  
Any person who co ntravenes the provisions of Article 38 of this Law shall be liable to 
imprisonment for a period of not more than three years, and a fine of not less than one hundred thousand Dirhams and not more than one million Dirhams, or to either of these 
penalties.

Article (43)  
Without prejudice to the penalties prescribed in this Law or in any other law, any person 
who contravenes any other provision of this Law and the regulations issued pursuant 
thereto shall be liable to imprisonment and a fine, or to either of th ese penalties.  
  
Part Four Final Provisions

Article (44)  
The Authority shall, in consultation with the Markets, determine the fees required to 
implement the provisions of this law and the regulations issued thereunder.

Article (45)  
As an exception to the evidential provisions and rules prescribed in any other law, proof in 
cases relating to Securities shall be permissible by all means of proof, including electronic 
data, data emanating from a computer, telephone recordings, and telex  and facsimile 
messages.

Article (46)  
The regulations concerning the functioning of the Authority and the rules and directions 
related thereto shall be issued within a period of three months at most as from date of its 
establishment.   
 Likewise, the regulati ons provided for in Article 4 of this law shall be issued within a period 
of six months at most.

Article (47)  
The Board shall issue the resolutions necessary for the implementation of this law.

Article (48)  
Any provision of any other law or legislation contrary to or incompatible with the provisions 
of this law and the regulations and resolutions issued pursuant thereto shall be repealed.

Article (49)  
This law shall be published in the Official Gazette and shall come into force from th e date of 
its gazetting.  
  
[Signed]  
Zayed Bin Sultan Al Nahyan  
President of the United Arab Emirates  
Issued by Us at the Presidential Palace, Abu Dhabi  
On 23 Shawwal 1420 Hijri 
Corresponding to 29 January 2000 AD