Broker Dealer Selling Agreement Template for the United Arab Emirates

A Broker Dealer Selling Agreement is a specialized contract that governs the relationship between financial product issuers and broker-dealers in the United Arab Emirates. This agreement establishes the legal framework for distributing securities, investment products, and other financial instruments through licensed broker-dealers operating under UAE jurisdiction. The document ensures compliance with regulatory requirements while protecting the interests of both parties in complex financial transactions.

When do you need this document?

You need this agreement when establishing a distribution relationship between a product issuer and a broker-dealer in the UAE financial markets. This includes situations where investment companies want to engage broker-dealers to sell mutual funds, asset management companies seeking distribution partners for their products, or securities firms entering into selling arrangements with financial institutions. The agreement is also essential when international financial institutions enter the UAE market and need to engage local broker-dealers for product distribution. Additionally, you'll need this document when restructuring existing distribution relationships to ensure ongoing compliance with evolving SCA regulations.

Key legal considerations

The agreement must address critical regulatory compliance obligations, including adherence to anti-money laundering requirements under Federal Law No. 20 of 2018. You should carefully define the scope of authorized activities, ensuring the broker-dealer operates within their licensed capacity as regulated by the Securities and Commodities Authority. Risk allocation clauses are essential, particularly regarding liability for regulatory violations or client complaints. The compensation structure must comply with UAE commercial law and avoid conflicts of interest that could compromise client protection. Termination provisions should address the orderly wind-down of client relationships and transfer of records in accordance with SCA requirements. Due diligence obligations must be clearly specified, including know-your-customer procedures and suitability assessments.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 4 of 2000, both parties must hold appropriate licenses from the Securities and Commodities Authority before executing this agreement. The broker-dealer must maintain valid authorization for the specific products and services covered by the agreement. Compliance with SCA Board Decision No. 3/R of 2001 is mandatory, particularly regarding operational procedures and client protection measures. If operating within financial free zones like DIFC or ADGM, additional compliance with Federal Law No. 8 of 2004 may apply. The agreement must incorporate anti-money laundering compliance measures as required by Federal Law No. 20 of 2018, including client identification and suspicious transaction reporting procedures. Commercial relationships must align with the UAE Commercial Companies Law (Federal Law No. 32 of 2021), ensuring proper corporate governance and contractual validity under UAE law.