SCA Develops Four Key Legislations On Carbon Credits And Retail Sukuk To Enhance Financial Markets

The Securities and Commodities Authority (SCA) is developing four regulatory projects to boost financial market competitiveness, transparency, and investor protection. Waleed Al Awadhi, CEO of the SCA, shared this with the Emirates News Agency (WAM). These initiatives include regulations for carbon credit trading platforms, supporting national carbon neutrality goals.

Al Awadhi highlighted that the SCA is finalising a draft regulation for retail Sukuk. This aims to broaden the investor base by allowing access to bonds and Sukuk markets through fractional investments. The framework will protect investors’ rights while enhancing liquidity and financial inclusion.

The SCA is updating capital market authority laws and financial sector regulations. These updates aim to expand the authority's powers, enabling it to keep pace with modern financial activities. Advanced supervisory mechanisms will be implemented to manage risks and protect investors effectively.

Another legislative focus involves public joint stock companies' division. This aims to provide greater flexibility in corporate structuring and improve operational efficiency. The Board of Directors has approved a framework for recognising goodwill in these companies as an intangible asset.

The SCA has made strides in sustainable finance by issuing a regulatory framework for green bonds, green Sukuk, and sustainability-linked instruments. This aligns with global best practices, requiring issuers to fund environmentally sustainable projects. Registration fee exemptions encourage listing green bonds and Sukuk.

Since implementing these regulations, 11 green bond and Sukuk issues have been registered, totalling approximately AED24.6 billion. The total value of sustainability-linked issuances reached US$8.7 billion, with US$6.7 billion listed on local and international markets.

Expanding Financial Inclusion

Al Awadhi emphasised that all initiatives aim to enhance market efficiency and expand financial inclusion. They offer diverse financial products catering to various investor needs while maintaining innovation support alongside financial stability and investor protection.

This comprehensive approach consolidates the UAE’s position as a leading global financial centre known for efficiency, reliability, and sustainable growth.

With inputs from WAM