UAE’s Finfluencer license regulates digital financial advisors promoting investments.
Unregulated influencers risk spreading misleading advice without formal credentials.
Coinwire study shows 89% of memecoin investors lost money after following influencers.
The United Arab Emirates has introduced a new regulatory license targeting individuals who promote financial content online. This ambition aims to supervise digital financial advisors, commonly known as "finfluencers," to enhance market integrity and investor protection within the country. The Securities and Commodities Authority (SCA) unveiled the Middle East’s first “Finfluencer” license to govern financial recommendations on digital platforms across the UAE.
Defining the UAE Finfluencer License
The SCA’s updated rules cover those who offer advice on finances, examine investments or share material about regulated financial items. This covers information that goes out through newspapers, TV, radio and online platforms such as social media websites. Anyone wishing to operate in the SCA needs to register and satisfy the required rules.
The objective of the license is to maintain strict rules for financial planning and advice to help maintain public trust in local capital markets. Speaking about the new license, the SCA’s CEO H.E. Waleed Saeed Al Awadhi called it a key improvement in regulation.
He said the initiative aims to adjust the responsibilities of regulators as digital services expand. To maintain worldwide market integrity, the SCA encourages openness and reliability in the financial sector.The license represents part of the authority’s adaptive regulatory model, evolving in step with changes in the investment and financial landscape.
Addressing Risks from Unregulated Financial Influencers
The regulator’s action responds to the growing number of unregulated financial content creators on social media. Many of these individuals have large followings, sometimes surpassing those of licensed financial advisors. However, a significant number lack formal financial credentials or industry experience. This gap increases the risk that followers may receive inaccurate or misleading financial information.
Supporting this concern, a study by Coinwire analyzed memecoin-promoting influencers on the social media platform X. It found that 39% of investors who acted on advice from these influencers incurred losses within one week. After three months, this figure rose to 89%. These results underline the potential harm caused by unregulated financial advice.
The SCA’s new regulation requires finfluencers to register if they provide recommendations about buying, selling, or holding financial products or virtual assets. This rule extends to anyone producing content involving financial advice, visuals, discussions, or recommendations concerning investments within the UAE. The registration aims to formalize oversight of digital financial communications and reduce the chance of harmful or false advice influencing UAE investors.
The introduction of the finfluencer license marks a regulatory milestone in the UAE’s effort to govern emerging digital financial services. By imposing clear obligations on digital financial promoters, the SCA intends to strengthen market discipline and enhance investor confidence.