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ME-ALLIANCE LEGAL UPDATE
Federal Decree Law No. (6) of 2025 concerning the Central Bank and the regulation of financial institutions, activities and insurance
Federal Decree Law No. (6) of 2025 comes within the framework of the UAE’s efforts to enhance financial stability, develop the regulatory system for the financial and insurance sector, and keep pace with the rapid developments in financial technology and digital services.
1.Comprehensive regulation under the umbrella of the Central Bank
✔️The law covers all financial and insurance activities within a single regulatory framework.
✔️Adopting regulatory policies that are in line with the best international standards to ensure the integrity and efficiency of financial practices.
2. Expanding the powers of the Central Bank
✔️Formulate and implement monetary policy and manage foreign state reserves.
✔️Monitor licensed financial activities and issue the necessary regulations and standards.
✔️Direct powers to manage financial crises through the separation of departments, restructuring, appointment of trustees, sale of assets or transfer of liabilities.
3. Enhance consumer protection
✔️Setting standards and regulations to ensure fairness and transparency infinancial institutions’ dealings with customers.
✔️Supporting financial inclusion and providing appropriate services to all segments of society, in line with digital transformation.
✔️Consolidating the financial and insurance complaints process within an independent entity (Sanadak) for settlement, with the establishment of competent judicial committees that issue binding final decisions up to AED 100,000.
4. Keep pace with innovation and digital transformation
✔️Encourage digital financial services and innovation.
✔️Develop national awareness frameworks in cooperation with financialsector institutions.
✔️Continuation of previously applicable consumer protection rules such as alignment of credit facilities with the customer’s income.
5. Early intervention and risk management procedures
The law includes an integrated system for proactively dealing with negativefinancial indicators in licensed establishments, through:
✔️Activate recovery plans and correct financial and operational conditions.
✔️Impose additional capital and liquidity requirements.
✔️Modify operational and administrative structures as needed.
✔️Merger, acquisition or liquidation of troubled companies.
✔️Applying special procedures to insurance companies that do not adhere to financial solvency standards.
✔️The law also establishes the role of the Central Bank as a dissolution and settlement authority, including:
• Isolation of departments and appointment of new departments.Redeem rewards.
• Appoint guardians to manage the facility.
• Transfer or sale of assets and liabilities.
• Capital restructuring or cancellation of shareholders’ equity.
• Establish temporary entities to pursue vital activities.
To viiew the offcial decree: CLICK HERE!
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