Sign in
SCA rolls out regs for SPVs: The Securities and Commodities Authority (SCA) has issued regulations for special purpose vehicles (SPVs), aimed at strengthening the UAE’s securities sector and boosting investments in domestic capital markets, Wam reports. The framework sets out requirements for SPV incorporation, classification, licensing, and liquidation procedures for SPVs that fall outside the jurisdiction of financial freezones like the Dubai International Financial Center and the Abu Dhabi Global Market.
Also exempt: Federal or local government entities and their companies — unless the debt issuances offered by the SPVs are public.
Background: In 2021, the SCA issued the decision (pdf) permitting the establishment of SPVs and special purpose acquisition companies (SPACs). SPVs were introduced to facilitate debt issuances by allowing them to back sukuk and other debt instruments with assets transferred to the SPVs. The decision came into effect in January 2022.
Applications for SPVs must be submitted to the SCA for approval, with the authority either approving or rejecting the application within five days.
The SCA has also introduced a new SPV manager role to oversee the operations of the vehicle, ensuring that they comply with their designated purposes. Accordingly, the decision bars these managers from conducting mergers, legally restructuring of the SPV, or splitting the SPV.
