XM Secures Dubai SCA Category 5 Licence

XM, a leading contracts for differences (CFDs) broker, has obtained a Category 5 licence from Dubai's Securities and Commodities Authority (SCA), marking its strategic expansion into the UAE's lucrative trading market. The broker plans to activate this regulatory approval before the end of 2025.

The regulatory milestone enables XM to operate as an introducing broker in Dubai through its newly established entity, XM Financial Products Promotion, which was incorporated in January 2025. The company has set up operations in Dubai's prestigious Opus Building at Business Bay, positioning itself within the emirate's thriving financial district.

SCA Licence Categories Explained

Dubai's Category 5 licence permits brokers to promote financial services to UAE residents while directing client onboarding to their offshore entities. This differs significantly from a Category 1 licence, which allows local client fund custody and trade execution. XM chose the Category 5 option as it aligns with their business model of maintaining promotional activities in Dubai while conducting actual trading operations through their international platforms.

The broker already holds a Dubai Financial Services Authority (DFSA) license for free-zone operations, but the SCA licence expands its reach to mainland UAE markets. XM maintains additional regulatory oversight from Cyprus, Belize, Seychelles, Mauritius, and South Africa, with sister brand Trading.com regulated in the UK and Australia.

Middle East Trading Boom Drives Expansion

The UAE market presents exceptional opportunities for CFD brokers, with regional traders demonstrating significantly higher trading volumes than their European counterparts. Capital.com recently disclosed that 52% of its H1 trading volume originated from the Middle East, despite having fewer regional clients compared to Europe.

UAE-based traders generated 71.7% of Capital.com's $804.1 billion Middle East trading volume, highlighting the market's concentration of high-value participants. This trend has attracted multiple brokers to seek Dubai SCA regulation, with Exinity, VT Markets, Eightcap, EC Markets, and Taurex all securing Category 5 licences.

Regulatory Competition Intensifies

While most brokers opt for Category 5 licences, some competitors have pursued full Dubai brokerage authorisation. Plus500, XTB, and RoboMarkets obtained Category 1 licences, enabling comprehensive local operations, including client fund management and direct trade execution.

CFI Financial exemplifies the region's growth potential, reporting a record $1.51 trillion trading volume during Q2 2025. This quarterly figure represents over half of their entire 2024 annual volume of $2.79 trillion, demonstrating accelerating market activity in the Middle East.

Strategic Market Positioning

XM's Dubai expansion reflects broader industry recognition of the UAE's importance as a trading hub. The emirate's regulatory framework attracts international brokers seeking access to sophisticated investors and institutional clients across the MENA region.

The broker's flexible licensing approach maintains operational efficiency while ensuring compliance with local regulations. XM has indicated potential future interest in upgrading to a Category 1 licence should business requirements evolve.

About XM Broker: XM is a global multi-asset broker offering CFDs on forex, commodities, indices, and stocks across multiple regulated jurisdictions worldwide.