SCA to regulate financial content creators in the UAE

The UAE Securities and Commodities Authority, or SCA, has changed the way that Financial services can be marketed in the Emirates via a ruling that requires a licence for content creators who discuss investment products in their work. The move from the regulator, which is often seen as the more “serious” of the two UAE authorities,  could reshape how financial marketing operates across the Gulf region, and perhaps, further afield.

Is this the end of fake Finfluencers in the UAE?

The SCA’s licensing requirement extends beyond traditional advertising channels and covers most forms of financial content creation.
Educational webinars, cryptocurrency analysis, videos, and investment recommendation posts now fall under its regulatory oversight.

This comprehensive approach reflects the growing global concern about unvetted financial advice reaching retail investors through digital channels.

The new regulation’s wording leaves little room for misinterpretation.

Anyone providing statements, opinions, or analysis about the present or future value, price, or expected performance of financial products must secure appropriate authorisation.

Who will be affected?

This definition covers not only explicit investment recommendations, but also market commentary and educational content, that might influence investment decisions.

Marketing partnerships and external lead generation funnels, so popular among brokers, are likely to face immediate scrutiny under these new requirements.
Affiliate marketers in the UAE, who had previously operated with minimal oversight, will now need to register for a license.

But the new rules will also affect finance educators, cryptocurrency analysts, and investment commentary channels, all of whom must now decide whether their content needs to be regulated.

The wording and the breadth of activities covered in the new rules suggest that even general market discussions could fall within the SCA’s regulatory scope.

Operational challenges for creators and regulators

However, the new rules will cut both ways and their implementation is likely to test the SCA’s administrative capacity.

Processing new applications from hundreds or possibly even thousands of content creators could require substantial resources. However, tracking and moderating financial promotions, to ensure that the content is only produced by authorised participants, will be an immense task.

The fact that the SCA has offered a fee-free registration period, which extends for three years, could suggest that it’s confident in its ability to do this.

Market participants in the UAE will now likely need to reassess their promotional and marketing strategies. And traditional advertising channels might gain renewed importance, as digital content creation becomes more regulated.

Not just a problem for the UAE

Of course, the issue with unregulated, unsuitable, and misleading content and financial promotions is not peculiar to the UAE; rather, it’s a global phenomenon that’s been driven by the growth and availability of social media and networking platforms.

And the ease with which professional-looking content can be produced, and the potential rewards available to its creators.
Content that would have once taken a dedicated team of professionals in a studio to put together can now be created by individuals with a high-end smartphone camera and AI editing tools.

The UK FCA cracked down on twenty influencers, who it interviewed under caution in October 2024, in relation to social media accounts. Which may have contained illegal financial promotions.
Steve Smart, the joint executive director of enforcement and market oversight at the FCA, said then that:

“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.”

And a year ago, the FCA charged 9 influencers with involvement in an unauthorised foreign exchange trading scheme.

The tip of the Iceberg

However, this is just the tip of the iceberg. Social media channels are often full of dubious get-rich-quick schemes and images that suggest a jet-set lifestyle is available to all traders or investors.

If something looks to be good to be true, then it generally is.

Even the Good Money Guide contributors are not immune to the scammers. Our own Michael Hewson, host of the Good Money Guide Podcast, had his identity cloned recently as part of a scam aimed at unsuspecting investors on WhatsApp.

The incident and fraudulent WhatsApp group and post were reported to Meta (owners of Facebook, Instagram and WhatsApp) immediately.

However, the post remained available and racked up 29,000 views, many of whom may have been from people who didn’t realise that it was a scam.

A long history of highlighting scams

The Good Money Guide has a long history of highlighting fraudulent content to Meta. Founder, Richard Berry, wrote recently that it took Meta 1024 days to remove an advert that the Good Money Guide reported to it as a scam.

And that’s the thing, the volume of content on social media that either breaks the UK’s financial promotion rules or is an outright scam is immense. And likely beyond the capabilities of regulators and the advertising authorities to monitor it effectively.

Even when content is reported to the social media platforms, they are unwilling or unable to remove such content in a timely fashion.

Nor is it clear that the platforms have any kind of effective compliance procedures in place to stop fraudulent financial promotions from making it onto their platforms in the first instance.

Few incentives for social media platforms to change their ways

AI could perhaps be used to police the suitability, appropriateness and legality of financial promotions, and finfluencer content, on social media and networking channels.
However, there is no real incentive for the social media companies to clean up their act, because they are earning millions of dollars out of these adverts, posts, videos, etc, and the click-throughs they generate.

The move to a regulated environment for content creators and financial promoters in the UAE will be an interesting test case.
But how effectively the authorities there will be able to enforce the new rules, in the real world, particularly in regard to content created outside of the region, remains to be seen.