SCA Securities Content: How to Review Investment Communications for UAE Capital Markets Compliance

The Securities and Commodities Authority (SCA) is the UAE's federal securities regulator, overseeing capital markets, investment funds, and financial intermediaries operating outside the DIFC and ADGM free zones. The SCA's regulatory framework — including SCA Board Decision No. 3/R.M of 2017 on Mutual Funds and its various circulars on market conduct — establishes detailed requirements for how investment products and services can be marketed to UAE investors.

With the UAE's capital markets growing rapidly and retail investment participation increasing, the SCA has intensified its oversight of securities advertising and investor communications. Organizations that publish investment content without complying with SCA requirements face enforcement actions including license suspension, monetary penalties, and public censure.

The Regulatory Framework

Key SCA Content Regulations

Interaction With Free Zone Regulators

The UAE's securities regulatory landscape includes three distinct jurisdictions:

• SCA — governs securities activities outside free zones
• DFSA (DIFC) — Dubai International Financial Centre regulator
• FSRA (ADGM) — Abu Dhabi Global Market regulator

Organizations operating across these jurisdictions must ensure their investment content complies with the applicable regulator. Content distributed to the general UAE public (outside free zones) falls under SCA jurisdiction.

Common Securities Content Compliance Issues

1. Performance Advertising

The SCA requires that investment fund performance advertising:

• Present net-of-fee returns calculated using standardized methodology
• Include all required time periods (typically 1, 3, 5 years and since inception)
• Disclose the benchmark used for comparison
• Include a clear warning that past performance does not guarantee future results
• Not present simulated or hypothetical returns without explicit disclaimers

2. Risk Disclosures

Every piece of investment marketing must include risk disclosures proportionate to the return claims. The SCA requires:

• General market risk warnings in all securities advertising
• Product-specific risk factors (credit risk, liquidity risk, currency risk)
• Capital loss warning — investors must be told they could lose some or all of their investment
• Sharia compliance risks for Islamic investment products (where applicable)

3. Prospectus and Offering Document Content

SCA-registered investment funds must maintain prospectuses that include:

• Complete description of the fund's investment strategy and restrictions
• Fee structure including management fees, performance fees, and all other charges
• Risk factors specific to the fund's strategy and market exposure
• Minimum investment amounts and redemption terms
• Fund manager and key personnel qualifications

4. Social Media and Digital Marketing

The SCA has issued guidance on digital securities marketing:

• Social media posts promoting investment products must link to complete prospectus or offering documents
• Risk warnings must be included in every post, not just in linked documents
• Influencer promotions of investment products require SCA pre-approval
• Investment performance screenshots shared on social media must include full context and disclaimers

Securities Content Review Criteria

For Each Piece of Investment Content, Evaluate:

1. Registration status: Is the product or fund properly registered with the SCA?
2. Performance presentation: Are returns presented net of fees with all required time periods?
3. Risk disclosure: Are risk warnings proportionate to return claims and product-specific?
4. Capital loss warning: Is it clearly stated that investors may lose their investment?
5. Fee transparency: Are all fees and charges fully disclosed?
6. Qualification claims: Are fund manager credentials accurate and verifiable?
7. Sharia compliance: If marketed as Islamic, is the Sharia compliance status and board disclosed?
8. Regulatory status: Is the entity's SCA registration clearly identified?

Content Review Checklist

• Fund/product SCA registration number is displayed
• Performance data is net-of-fee with standardized calculation
• All required time periods are included in performance presentation
• Benchmark is disclosed and appropriate
• "Past performance does not guarantee future results" warning is present
• Capital loss warning is clearly stated
• Risk disclosures are proportionate to benefit claims
• Fee structure is completely and clearly disclosed
• Fund manager qualifications are accurate
• Social media content includes risk warnings and links to full documents
• Arabic and English versions maintain equivalent compliance
• Content has been submitted for SCA pre-approval where required

Building a Securities Content Review Process

Investment firms operating under SCA jurisdiction should implement:

1. Content classification: Identify the content type and applicable SCA regulation
2. Compliance template review: Use approved templates with mandatory disclosure elements
3. Pre-publication AI review: Scan content for missing disclosures, unbalanced risk/return presentation, and performance data formatting
4. SCA submission: Submit for pre-approval where required
5. Post-publication monitoring: Audit published content for continued accuracy and regulatory changes

TeamBench enables UAE investment firms to build SCA-specific content reviewers that evaluate securities marketing against regulatory standards. Custom criteria can check performance data formatting, risk disclosure proportionality, fee transparency, and registration disclosure — creating a systematic first-pass review that catches compliance gaps before they reach the regulator.

In a capital markets environment where the SCA is actively expanding its oversight of investor-facing content, systematic review is not a luxury — it is a regulatory requirement.