The Capital Markets Authority (CMA) in the United Arab Emirates (UAE) has started displaying a risk warning for firms that hold Category 5 licenses on its website.
Users who visit the CMA’s registry and access the page of a Category 5 license holder are now greeted with a warning pop-up. This states that the firm is only able to undertake marketing and introducing services.
The warning also notes that the firm is not permitted to undertake various financial services, including dealing in derivatives and FX products.
TradeInformer accessed several providers with a Category 5 license and found the warning appeared on all of them as a pop-up, which has to be closed before the provider’s registration can be accessed.
Category 5 holders appear on the CMA’s own warning list
Even more bizarrely, the CMA has added several Category 5 license holders to its own public warning list.
Typically regulators list firms that are not operating with their license and seek to protect consumers from unregulated firms.
Over the last month, the CMA has added Naqdi and Mohican Markets to its own warning list.
Both firms are regulated by the CMA with Category 5 licenses. However, the warnings are very similar to the pop-ups that appear on the registry, noting that the two firms are not allowed to provide services beyond marketing and introducing services.
Category 5 over?
The moves by the regulator fit with market rumours that changes are coming to the Category 5 licensing regime, something TradeInformer has reported on previously.
A huge number of firms hold the license and then use a license in the Seychelles or Mauritius to actually onboard clients.
However, the actual onboarding flow and setup often gives little indication to the end user that this is happening.
