The Dubai
Financial Services Authority (DFSA) said many brokerage firms in the city’s
financial center are not keeping pace with the rules on staff trading. The
conclusion follows a review of how those firms police their employees’ personal
dealing.
In its
first Conduct Supervisory Pulse, published today (Monday), the regulator said
some firms lacked basic policies, registers and monitoring for personal account
dealing, even as the sector’s headcount and profits climbed.
The Pulse
covers the opening phase of a wider 2026 review into how brokers oversee their
trading environment. Personal account dealing came first, with best execution
and communications record-keeping due in later phases.
A Sector Outgrowing Its
Controls
The review
landed against a fast-growing backdrop. The number of authorized brokerage
firms in the Dubai International Financial Centre rose to 72 in March 2026 from
49 in 2022, an increase of 68%, while staff numbers nearly doubled over the
same period.
The boom
has stretched the regulator, which sped up its licensing process last
year after
applications jumped 18% in the first nine months of 2025.
Profits
moved in the same direction. Combined net profit at DIFC brokerage firms
climbed to $301 million in 2025 from $80 million in 2023, according to the
regulator, a rise of 276%.
Gaps in Policies and
Records
The harder
numbers came from an industry-wide survey the Dubai Financial Services Authority ran as part of an earlier
conflicts-of-interest review.
It found
that 18% of firms had no documented personal-account-dealing policies, while
32% kept no register of staff trades in any form, manual or electronic.
A further
59% said approval or notification rules applied only to certain types of
transaction, pointing to wide variation in how firms handle the issue.
The
regulator also said its own checks had turned up differences between what some
firms reported about employee trades and what independent enquiries found. In
one case, a firm logged no policy breaches when breaches had in fact occurred.
Poorly
designed or ineffective controls, the DFSA said, “are a sign of weak
culture, governance, and oversight.”
Dubai’s Pull on Global
Brokers
The conduct
push comes as Dubai cements its place as a licensing hub for retail trading
firms. Pepperstone secured a DFSA license for its DIFC subsidiary after a
multi-year application process, joining a steady stream of brokers setting up
in the emirate.
Others have
come through the DFSA or the separate Securities and Commodities Authority,
including XM, Plus500, XTB and RoboMarkets, drawn by the region’s high-value
traders and its position between European and Asian trading hours.
ThinkMarkets won DFSA approval to onboard UAE clients, part
of a wave the regulator has tried to manage by automating parts of its
authorization workflow. The Pulse signals that supervision is now catching up
with that intake.
Personal
account dealing is well-trodden ground for the kind of conduct regulator Dubai
is starting to resemble.
The
approach echoes the FCA in London, where staff-dealing and surveillance rules
have long underpinned market-abuse enforcement, and the DFSA is now led by Mark Steward, the former FCA
enforcement chief who took over as chief executive in May.
What Comes Next
The DFSA
framed personal account dealing as one piece of broader market-conduct risk,
and warned that firms failing to manage it could face regulatory action.
It pointed
to over-reliance on employee declarations, thin post-trade monitoring and weak
record-keeping as the most common shortfalls.
Best
execution, the focus of a later phase, has driven enforcement at peer
regulators before, including a FINRA fine against Deutsche Bank
Securities over
order-routing practices. Communications and record-keeping will round out the
review.
As the
sector grows, the DFSA said, firms should keep their controls aligned to the
size and complexity of their business, and may later be asked to show how they
have responded.
This article was written by Damian Chmiel at www.financemagnates.com.
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