UAE
Remuneration Regulation for Banks and Insurance Companies (Circular No. 5/2026)
Impact date: The Regulation takes effect immediately upon publication in the Official Gazette. Banks and insurance companies must submit a gap analysis and action plan within 180 days of the effective date, and achieve full compliance within 15 months of that date.
The Central Bank of the UAE has introduced new remuneration regulations for banks and insurance companies, requiring robust frameworks aligned with risk management. Full compliance is required within 15 months of publication (awaited).
Employer implications/action needed Banks and insurance companies must implement a Board approved remuneration framework aligned with risk management and long term performance. Required actions include: conducting a comprehensive gap analysis of existing remuneration arrangements; developing an action plan to address identified gaps; reviewing and updating remuneration policies (including variable pay, malus/clawback, deferral, severance and disclosure); ensuring enhanced governance oversight by the Board, remuneration committee and risk committee; and reviewing existing contracts for compliance within the transitional period.
Employer risk Failure to comply may result in supervisory, administrative and / or financial sanctions by the Central Bank. Supervisory action and sanctions by the Central Bank may include withdrawing, replacing or restricting the powers of Senior Management or members of the Board, providing for the interim management of a Financial Institution, or barring individuals from the UAE financial sector.
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