Table of Contents
CISI UAE FRR
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The UAE Capital Market Authority, formerly the Securities and Commodities Authority, uses licence categories in the Financial Activities Rulebook. The current annex does not support a simple rule that Category 1 is always the highest-risk category and every later category requires less capital. Some categories have one minimum; Category 2 and Category 7 use activity-level amounts.
Quick answer: Category 1, Dealing in Securities, requires at least AED 30 million. Category 5, Arranging and Advice, requires at least AED 500,000. Category 2 cannot be reduced to one figure because the amount depends on the activity and the amounts are added when a firm conducts more than one Category 2 activity.
Current Licence Categories and Paid-Up Capital
| Category | Licence group | Current minimum stated in the annex |
|---|---|---|
| 1 | Dealing in Securities | AED 30 million |
| 2 | Dealing in Investment | Activity-specific: AED 1 million for investment-fund management, AED 3 million for portfolio management, AED 1 million for fund administration, and AED 35 million for managing a profit-sharing investment account |
| 3 | Custody, Clearing and Recording | AED 50 million |
| 4 | Credit Rating Agencies | AED 5 million |
| 5 | Arranging and Advice | AED 500,000 |
| 6 | Crowdfunding Platform Operator | AED 1 million |
| 7 | Virtual Asset Service Providers | Activity-specific; use the current virtual-assets framework for the exact activity and operating-expense requirement |
The table is a licensing summary, not a statement that every activity available to a firm has identical conditions. Legal form, approved jobs, guarantees and any separate prudential rules must also be checked.
Why Older Capital Tables Conflict
Decision No. 13 of 2021 created the base rulebook, but later resolutions changed its annex. In particular, Category 2 moved to minimum capital for each financial activity, and Category 5 now states AED 500,000. A table that still shows AED 50 million for all Category 2 firms or AED 1 million for Category 5 is not using the current annex.
The category labels are also frequently misstated. Category 1 is Dealing in Securities, Category 2 is Dealing in Investment, and Category 3 is Custody, Clearing and Recording. Underwriting, custody, asset management and advice should not be moved between categories to create a simplified risk ladder.
How Multiple Category 2 Activities Are Calculated
The Category 2 annex says that when a firm conducts more than one financial activity in that category, the required capital is the sum of the activity minimums. A firm licensed for portfolio management at AED 3 million and fund administration at AED 1 million would therefore start with a combined Category 2 paid-up-capital minimum of AED 4 million, before checking any other applicable condition.
This is different from the common but incorrect shortcut of applying only the amount for the supposedly highest-risk activity.
Free CISI UAE FRR Practice Questions & Exam Preview
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A private investment fund is preparing a promotional campaign. Which advertising restriction applies to that campaign?
Flashcards
When was the SCA established and where is it headquartered?
Focus Learn
- Establishment and functions of the SCA under Federal Law No. 4 of 2000
- SCA Board: appointed by Cabinet resolution for 4-year terms, renewable once
- Five licence categories and their paid-up capital requirements (AED 30M, 50M, 50M, 5M)
- Corporate governance requirements for PJSCs
- CISI Code of Conduct eight principles
- SCA powers: licensing, investigation, enforcement, penalties
- Related-party transaction 5% threshold requiring General Assembly approval
- Gift restrictions: AED 500 or less for symbolic gifts
- SCA budget timeline: approved 1 month before fiscal year; final accounts within 90 days
1. Regulatory Foundation
This chapter establishes the UAE's regulatory foundation through Federal Law No. 4 of 2000, which created the Securities & Commodities Authority (SCA).
The SCA operates as an independent public authority in Abu Dhabi with its own legal personality, full financial, and administrative independence. It is prohibited from entering into commercial activities, having private interests of its own in any undertaking, or owning/issuing securities.
2. SCA Board & Operations
The SCA is managed by a Board of Directors:
- Constitution: Appointed by resolution of the Cabinet of Ministers.
- Tenure: Members are appointed for 4 years, renewable once only.
- Meetings: The Board must meet at least once every 2 months. Emergency meetings c…
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How to Revise the Figures Without Mixing the Rules
Use four fields for each card: category, activity, minimum and combination rule. For example, “Category 2, portfolio management, AED 3 million, add to other Category 2 activity minimums.” This prevents Category 1’s category-wide AED 30 million from being confused with Category 2’s activity-level approach. Mark any figure from past papers or exam dumps as unverified until it matches the current annex, and keep the source date on each card when using digital flashcards.
Keep licensing capital separate from ongoing capital adequacy. Decision No. 11 of 2026 amended the capital-adequacy section, including the composition of Tier 1 capital and a leverage requirement. It did not turn the licence-category annex into a single seven-step risk ladder.
Conclusion
For a reliable answer, name the exact licensed activity first, then read the matching row in the current annex. Do not infer the amount from the category number or reuse a pre-amendment summary.
Frequently Asked Questions
1 What is the minimum capital requirement for a Category 1 firm in the UAE?
The current Financial Activities Rulebook sets Category 1, Dealing in Securities, at not less than AED 30 million in paid-up capital.
2 Do all financial firms in the UAE need the same minimum capital?
No. The UAE CMA (formerly SCA) uses a risk-based approach. A firm that only provides advice (Category 4) requires significantly less capital than a firm dealing as principal or managing assets.
3 Can a firm use client money to meet its minimum capital requirements?
Absolutely not. Client money must be strictly segregated from the firm's own funds. Minimum paid-up capital must be the firm's own unencumbered money.
4 How does the UAE CMA (formerly SCA) categorize financial activities for licensing?
The current rulebook has seven licence categories. The number identifies a group of activities; it is not a simple highest-to-lowest risk ranking, and some categories use activity-specific capital rather than one category-wide amount.
5 Why do candidates fail UAE CMA (formerly SCA) capital requirement questions on the CISI exam?
Older summaries may pre-date amendments that introduced activity-level figures for Category 2 and AED 500,000 for Category 5. Candidates should match their exam date to the applicable syllabus and current rulebook annex.
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