CBUAE Loan-based Crowdfunding Activities Regulationchapter by chapter

Article 2.1-2.3Categories

Classifies loan-based crowdfunding activities into Category 1 (large, AED 5,000,000 or more lending per year) or Category 2 (small), and requires companies to apply for the matching licence category.

Article 2.4-2.5Categories

A Category 2 crowdfunding company seeking Category 1 status must prove it meets all Category 1 requirements before its upgrade application is considered, and cannot revert without prior written Central Bank approval.

Article 3.1-3.9, 3.18Application for Licence, Category and Core Information

Crowdfunding companies must apply to the Central Bank with core information and a justified licence category; the Central Bank may grant with conditions or reject with reasons.

Article 3.10-3.11, 3.17Validity, Fees and Bank Guarantee

Crowdfunding licences are valid for 12 months and renewable with Central Bank approval; applicants pay an application fee at submission, an annual licence fee at renewal, and a bank guarantee equal to required paid-up capital.

Article 3.12-3.14Cancellation and Modification of Licence

The Central Bank may cancel or modify a crowdfunding licence for non-commencement, prolonged cessation, regulatory breach or undue risk, with 20 days' notice, and assesses voluntary surrender requests.

Article 3.15-3.16Ongoing Licensing Obligations

Companies must continuously meet licensing criteria and comply with all conditions, as verified by Central Bank inspections.

Article 4.1-4.2Capital Requirement

A company must maintain a minimum capital of AED 1,000,000 (Category 1) or AED 300,000 (Category 2), whichever is higher than 5% of outstanding lending.

Article 5.1-5.3Staffing and Fit and Proper Persons

The company must employ adequate qualified staff and ensure Board members, CEO, CFO, CRO, Head of Compliance, MLRO and Sharia advisor are fit and proper, free of listed disqualifying history.

Article 5.4Emiratisation

Licensed crowdfunding companies must comply with applicable Emiratisation requirements issued by UAE government authorities and any subsequent Central Bank requirements.

Article 6.1-6.4Risk Governance Framework - Establishment

Companies must maintain a risk governance framework to identify, measure and control material risks, including operational, conduct, fraud, cybercrime, money laundering, and terrorist financing risks.

Article 6.5-6.7Risk Governance Framework - Board Accountability and Exit Plan

The Board is accountable for risk governance, the Chief Risk Officer must report directly to the Board, and the company must maintain an orderly wind-down exit plan.

Article 7.1Systems and Controls

Crowdfunding companies must maintain adequate internal controls, enforce segregation of duties within their organisational structure, and conduct operations under clearly documented policies, authorities and procedures.

Article 7.2-7.3Outsourcing

Companies must obtain prior Central Bank approval before entering any material outsourcing arrangement, with outsourced systems and controls meeting at least the Regulation's standards and Central Bank requirements.

Article 7.4-7.6External Audit

Crowdfunding companies must obtain Central Bank approval before appointing or re-appointing external auditors, who cannot audit for over six successive years, with partners rotated every three years.

Article 8.1-8.4Lender Selection and Suitability

Companies must carefully assess lender suitability, verify identities, and classify lenders correctly as Retail Clients or Market Counterparties.

Article 8.5-8.6Lending Structure

Crowdfunding platform operators must structure activities transparently in plain language within enforceable lending contracts, and ensure each platform loan is backed by a written, legally enforceable loan agreement between borrower and lender.

Article 8.7-8.11Borrower Risk Scoring, Loan Pricing and Due Diligence

Crowdfunding companies must use a publicly disclosed risk scoring and loan pricing methodology, assess borrowers' risk and due diligence, conduct AML and UBO checks, and review borrowers annually.

Article 8.10-8.11 (Ceilings on lending context), Article 8 general - continuedBorrower Monitoring and Cross-Platform Borrowing

Platforms must notify lenders and create an action plan when a borrower's risk score rises, and require borrowers to declare cross-platform borrowing each calendar year.

Article 8.12-8.15Ceilings on Lending and Borrowing

Crowdfunding platforms must cap retail and market counterparty lending per person per project and in total annually, cap borrower annual borrowing at AED 10,000,000, and allow borrowers one platform per project.

Article 8.16Loan Release

Crowdfunding company must block borrowers' access to raised funds until the full funding goal is reached, and must block access to any amount above the funding goal.

Article 8.17-8.22Client Information Confidentiality and Client Money Protection

Crowdfunding companies must keep client information strictly confidential, avoid taking ownership of client money, and hold client funds only in segregated escrow accounts at Central Bank-licensed local retail banks.

Article 8.23-8.27Information Disclosures to Clients and Lenders

Crowdfunding companies must disclose business terms and risk warnings to all clients, coordinate with Al Etihad Credit Bureau on lender and borrower information, and give lenders detailed borrower project information.

Article 8.28-8.31Conflicts of Interest

Crowdfunding companies must identify, disclose and manage conflicts of interest, bar insiders from borrowing on the platform, and must not advise or directly market offers to clients.

Article 8.32Dispute Management

Crowdfunding companies must set up complaint and grievance redress procedures, a collections policy for late-paying borrowers, and keep records proving controls to the Central Bank.

Article 8.33-8.35Contingency Portfolio Administration Arrangements

Crowdfunding companies must maintain documented contingency arrangements so the loan portfolio stays administered if the company fails or is wound up, with the Board ultimately responsible.

Article 9.1-9.2Reporting to the Central Bank

The company must submit prescribed-form reports to the Central Bank within 30 days of period end, quarterly or semi-annually by category, plus annual audited financial statements.

Article 9.3-9.4, 9.6General Record Keeping and Inspection Access

The crowdfunding company must keep adequate books and records available for Central Bank inspection, including promotional, client suitability, corporate, financial, HR and IT security records.

Article 9.5Client Money and Transaction Record Retention

Entities must retain records of Client Money and completed transactions for at least ten years.

Article 9.7Board Responsibility for Reporting Breaches

The crowdfunding company's Board must report breaches directly to the Central Bank.

Appendix 1: Detailed Licensing Requirements

The licence application for crowdfunding must include comprehensive business and financial details.

Appendix 2.2Appendix 2: Additional Terms for Crowdfunding Platforms - Lender Agreements

Client agreements between crowdfunding companies and lenders must cover loan administration, payment mechanics, default handling, lending limit compliance for market counterparty lenders, and platform failure contingency arrangements.

Appendix 2.3Appendix 2: Additional Terms for Crowdfunding Platforms - Borrower Agreements

Crowdfunding platform client agreements with borrowers must restrict competing platforms, borrower lending and off-platform solicitation during commitment, require notice of material changes, and mandate annual financial statements.

Appendix 3: Required Crowdfunding Company Disclosures

Crowdfunding platform operators must prominently disclose fees, conflicts, eligibility, risks, cooling-off rights and client money safeguards publicly, and give 30 days' notice of fee changes.

Article 9.5-retRecord Retention — Records of Client Money and completed transactions

Records of client money and completed transactions must be retained for a minimum of ten years from the record date or transaction completion under crowdfunding rules.