UAE regulator introduces rules for dormant customer accounts at securities brokers

UAE’s Securities and Commodities Authority (SCA) has issued a decision concerning dormant customer accounts held at securities brokerage companies.

The regulator orders brokerage companies to classify customer accounts with no financial activity or data update for three years as dormant.

H.E. Abdullah Al Turifi, CEO of SCA, explained that by introducing this procedure, SCA aims at protect customer assets from potential loss or misuse. Al Turifi also noted that such rules would reduce the financial and administrative burden for brokerage companies that usually face a lot of obligations for maintaining and following up on dormant accounts.

The new rules will allow companies to prohibit transactions in/from dormant accounts. This, of course, will happen after explicitly informing the owner of the account that it has been inactive for the last three years and that it will be classified as dormant. Customers can contact the company to activate the account and make the necessary updates.

The new rules are announced just a couple of weeks after the regulator ordered all UAE-based securities and commodities brokerage companies to work on activating electronic connection with the Anti-Money Laundering and Suspicious Cases Unit of the Central Bank of the UAE (CBUAE), as the SCA is seeking to bolster anti-money laundering mechanisms.

To view the official announcement from SCA on the new rules for dormant customer accounts, click here.

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