Ensuring employee personal trading compliance is critical for banks and financial services firms across the United Arab Emirates (UAE) to maintain market integrity, protect clients and the firm, and meet regulatory expectations.
To keep pace, the compliance team must actively monitor all employee trading activity, flagging breaches for investigation or enforcement.
Employee personal trading compliance in the UAE for financial services firms is overseen by key regulators—including the Securities and Commodities Authority (SCA), Dubai Financial Services Authority (DFSA) and the Virtual Assets Regulatory Authority (VARA) through a strict framework of licensing, conduct standards, and risk controls focused on trading activities, disclosure, and governance.
Read A Guide to Financial Services Regulators and Compliance Regulations in the Middle East
Financial services employees, directors, and managers must comply with firm policies and regulator rules on personal trading, which include:
The SCA’s Rulebook includes Business Practice – Conditions for Providing Financial Service to a Client, which covers obligations including conflicts of interest and general conduct standards for licensed entities.
Under DFSA’s COB 6.2 – Personal Account Transactions the Conduct of Business module, the rules impose conditions, record-keeping and controls on personal trading by employees of authorized firms, imposing the following conditions:
An Authorised Firm must issue a written notice to the employee specifying the conditions under which the employee may carry out personal account transactions, and make that notice part of the employment contract.
The employee must obtain written permission from the firm (for that specific transaction or in general) before executing a personal account transaction involving a regulated instrument or cryptocurrency token.
The firm must ensure that any approved employee personal account transaction does not conflict with the firm’s duties to its clients.
The firm must receive prompt notification or otherwise become aware of each employee’s personal account transactions.
If an employee’s personal account transactions are conducted with the Authorised Firm, that account must be clearly identified and distinguishable from client accounts.
The firm must maintain adequate records of personal account transactions in accordance with the record-keeping provisions of COB 6.2.
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The Dubai Virtual Assets Law (Law No. 4 of 2022) and Cabinet Resolutions 111 and 112 of 2022 establish VARA’s authority over regulated virtual-asset service providers (VASPs) in Dubai.
Within the VARA Rulebook, there is a requirement that “the Board shall implement rules to govern and monitor the transactions of Board members and its Staff” (i.e., insiders) under the Market Conduct Rulebook.
VARA’s Insider Lists rule requires VASPs to maintain updated insider lists of all persons with access to inside information, retain them for at least 8 years, and provide them to VARA on request.
VARA’s Insider Dealing rule defines prohibited behaviors involving inside information and requires that insiders not engage in transactions using inside information.
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Best practices require employees to obtain pre-approval for trades, disclose personal trading activity, observe blackout periods, and report any conflicts of interest to ensure transparency and regulatory compliance.
Below are best practices for compliance to ensure effective oversight of employee personal trading, maintain regulatory compliance, and promote a strong culture of accountability:
Robust monitoring of employee trading is essential for maintaining compliance and protecting market integrity. Compliance functions or internal audit teams should actively monitor trades, flag suspicious patterns, and investigate potential breaches to ensure compliance. Regulators, including the SCA, DFSA, and VARA, have broad powers to inspect, audit, impose fines, suspend or ban individuals, and sanction firms for non-compliance with regulations. This oversight is particularly critical for virtual-asset firms, where VARA relies on its Market Conduct rulebooks to assess staff conduct and prevent insider misuse. Together, these measures help ensure a culture of accountability, transparency, and regulatory adherence across the organization.
The system enables compliance teams to track employee trades in real-time, enforce blackout periods, flag potential conflicts of interest, and maintain comprehensive audit trails to meet regulatory requirements. With configurable workflows, automated approvals, and robust reporting capabilities, MCO helps firms stay aligned with SCA, DFSA, and VARA regulations, reduce operational risk, and promote a culture of accountability and transparency across their workforce.