Sunday, 22 July 2012


Article 1 of Resolution No.126/5/95 defines a broker as “every natural or juridical person, other than a financial institution, authoried to carry out the activities of a financial and monetary brokerage”

Article 2 of the same Resolution  states that the activities of a broker shall be restricted to acting as an interme- diary in the buying and selling of local and foreign shares and stocks, currencies, commodities, and as an inter- mediary in the monetary markets.

4.1     Application and License

An application for a financial and monetary brokerage license may be submitted by either a natural or juridical person. Such application should be made on the prescribed form accompanied by the following:

(a)    A confirmation of the nature and extent of the proposed business and its management structure;

(b)   Name and address of the applicant and passport copies of its promoters;

(c)    Bank guarantee equal to 50% of the share capital of the applicant;

(d)   An undertaking to adhere to the laws and regulations of the Central Bank including the 1980
 Law; and

(e)    Any other documents as required by the Central Bank.

4.2     Pre-License Conditions

The following conditions must be satisfied before an application for a license is submitted to the Central Bank.

(a)    Paid-up capital or the funds allocated for the proposed activities shall not be less than:

(i)    Dhs.1,000,000 if the activities relate to local stocks and   shares only;

  (ii)   Dhs.2,000,000 if the activities relate only to foreign stocks and   shares;

(iii)  Dhs.3, 000,000 if the activities relate only to currencies and commodities and brokerage in the monetary market; or

(iv)  Dhs.6, 000,000 to carry out all the above three activities.

The share capital must be increased by 10% in the event that an application for a branch is submitted.

(b)   The applicant shall be a U.A.E. national (not less than 21 years of age) if the application is submitted by an individual.

If the applicant is a company, then the national shareholding shall not be less than 60% of the total paid- up capital.

(c)    The applicant must be of good personal and professional standing.

(d)   The proposed manager must have sufficient knowledge of the brokerage business. A license, if granted, would be valid for one year, renewable thereafter.

Winston Wambua

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