The UAE has ushered in a new era of financial regulation with the issuance of Federal Decree-Law No. 6 of 2025 (“CB Law 2025”) on 8 September 2025, with affected entities granted a one-year transition period until 16 September 2026 to achieve compliance. The UAE Central Bank (“CBUAE”) has the discretion to extend this period if required. CB Law 2025 replaces the previous 2018 Central Bank Law and the 2023 Insurance Decree-Law, creating a single, unified framework for banks, insurers, payment providers and technology enablers.
Key Highlights of CB Law 2025
1. Unified Regulatory Framework
CB Law 2025 consolidates banking, insurance, and payment services under one legislative umbrella, harmonising prudential, governance, and consumer protection standards across the financial sector. Firms operating across multiple financial verticals now face clearer, consistent rules.
2. Broader Scope of Regulated Activities
The law expands the CBUAE’s oversight to include:
- Open Finance Services: Regulation now covers open finance services.
- Virtual Asset Payment Services: Payment services using virtual assets are licensable under the law.
- Technology and Infrastructure Providers: Platforms, applications or protocols enabling financial services now fall under licensing and supervision - even if they do not interact directly with clients, signifying a transition to a much broader remit of regulation over the financial sector.
3. Integration of Insurance Regulation
Detailed requirements for insurance, reinsurance, brokers, agents, actuaries, and third-party administrators are now included in the law, harmonising standards across banking and insurance sectors.
4. Strengthened Consumer Protection and Fraud Prevention
Financial Institutions (“LFIs”) are subject to much stricter consumer protection and fraud prevention requirements and must:
- Implement robust anti-fraud systems and transaction monitoring;
- Maintain transparent product disclosures and fair lending practices;
- Operate independent complaint handling mechanisms;
- Promote financial literacy and inclusion.
5. Enhanced Enforcement and Penalties
CB Law 2025 introduces significant enforcement powers:
- Maximum administrative fines for institutions has been increased to AED 1 billion;
- Authorised individuals may face fines up to AED 5 million;
- Criminal sanctions have been introduced for unlicensed financial activity, with fines of AED 50,000–AED 500 million and potential imprisonment;
- Marketing or promotion of licensed financial services without authorisation is now itself a regulated activity;
- CBUAE can collect fines by debiting accounts held with it or any LFI
6. Resolution and Recovery Framework
- The law empowers the CBUAE to intervene early in distressed institutions, including:
- Imposing capital or operational adjustments;
- Restructuring operations or management;
- Facilitating mergers or orderly liquidation;
- Ensuring public disclosure of resolution measures and creditor prioritisation.
7. Recognition of the Digital Dirham and ESG Objectives
- The Digital Dirham is now legal tender, supporting regulated digital payments and cross-border use.
- ESG considerations are embedded into the CBUAE’s statutory objectives, reflecting a commitment to sustainable finance and climate risk oversight.
8. Compliance and Transition
Entities affected by CB Law 2025 have until 16 September 2026 to:
- Evaluate their licensing and regulatory classification and determine whether amendments are necessary;
- Update governance, risk management and consumer protection frameworks;
- Assess technology and fintech facilitation models;
- Align operations with ESG and digital asset requirements.
Early assessment and engagement with the CBUAE will be crucial for smooth compliance.
CB Law 2025 represents a fundamental transformation of UAE financial regulation, consolidating multiple legislative frameworks, expanding the regulatory perimeter, and strengthening enforcement. Firms operating in the UAE - whether banks, insurers, fintechs or technology enablers - must act proactively to ensure compliance, protect customers and align with the UAE’s evolving financial landscape.