Dubai Brokers’ Rapid Growth Outpaces Staff Trading Compliance

The Dubai Financial Services Authority (DFSA) has flagged that many brokerage firms in the Dubai International Financial Centre are failing to keep staff trading rules up to date with their rapid expansion, following a review of how these firms monitor employee personal dealing.

In its first Conduct Supervisory Pulse, released Monday, the regulator noted that some firms lacked basic policies, registers and monitoring for personal account dealing, even as industry headcount and profits surged.

The Pulse covers the initial phase of a broader 2026 review into broker oversight of trading environments, with personal account dealing addressed first, while best execution and communications record-keeping will be examined later.

The review occurs against a backdrop of strong growth: authorized brokerage firms in the DIFC rose to 72 in March 2026 from 49 in 2022, a 68% increase, while staff numbers nearly doubled over the same period.

The boom has strained the DFSA, which accelerated its licensing process last year after applications jumped 18% in the first nine months of 2025.

Combined net profit at DIFC brokerage firms climbed to $301 million in 2025 from $80 million in 2023, according to the regulator, a 276% increase.

An industry-wide survey conducted as part of an earlier conflicts-of-interest review revealed that 18% of firms had no documented personal-account-dealing policies, and 32% kept no register of staff trades in any form, manual or electronic.

A further 59% of firms applied approval or notification rules only to certain transaction types, indicating wide variation in handling of the issue.

The DFSA also reported discrepancies between what some firms recorded about employee trades and independent findings, with one firm logging no policy breaches when breaches had occurred.

Poorly designed or ineffective controls, the DFSA stated, "are a sign of weak culture, governance, and oversight."

The regulatory push coincides with Dubai solidifying its role as a licensing hub for retail trading firms, with Pepperstone securing a DFSA license for its DIFC subsidiary after a multi-year process.

Other brokers, including XM, Plus500, XTB and RoboMarkets, have obtained licenses through either the DFSA or the Securities and Commodities Authority, drawn by the region’s high-value traders and its position between European and Asian trading hours.

ThinkMarkets also gained DFSA approval to onboard UAE clients, part of a wave the regulator has tried to manage by automating parts of its authorization workflow, and the Pulse signals that supervision is now catching up with that intake.

The DFSA’s approach echoes the UK’s Financial Conduct Authority, where staff-dealing and surveillance rules have long supported market-abuse enforcement, and the DFSA is now led by Mark Steward, the former FCA enforcement chief who became chief executive in May.

The DFSA framed personal account dealing as part of broader market-conduct risk, warning that firms failing to manage it could face regulatory action, and pointed to over-reliance on employee declarations, thin post-trade monitoring and weak record-keeping as common shortfalls.

Best execution, which will be the focus of a later phase, has driven enforcement at peer regulators before, including a FINRA fine against Deutsche Bank Securities for order-routing practices, and communications and record-keeping will complete the review.

As the sector grows, the DFSA said firms should align their controls with the size and complexity of their business and may later be asked to demonstrate how they have responded.