CBUAE moves deeper into market plumbing

Central Bank of the UAE has appointed financial software group VERMEG to develop a central securities depository solution, a move that places the monetary authority more directly inside the country’s post-trade market infrastructure and signals a broader push to tighten the links between payments, settlement and capital markets. The announcement was made on 13 April, with CBUAE saying the project is intended to strengthen market infrastructure and support safer, more efficient securities services.

The plan matters because a central securities depository, or CSD, sits at the heart of how modern markets function. It records ownership of securities, supports transfers after trades, and helps ensure that delivery of securities and payment are completed in a controlled way. In the UAE, existing depository and settlement functions already operate through market-linked entities such as Abu Dhabi Central Depository and Dubai CSD, while CBUAE has also been building a larger role in the cash-settlement layer for capital-market transactions.

CBUAE framed the VERMEG partnership as part of a drive to reinforce financial-market resilience, improve operational efficiency and align the country’s market backbone with international standards. Saif Humaid Al Dhaheri, Assistant Governor for Banking Operations and Support Services at CBUAE, said the development of a central securities depository reflects the central bank’s commitment to modernising financial-market infrastructure and enabling secure, efficient services. His title and role match official CBUAE and affiliated institutional material.

That message fits a wider pattern. Over the past year, CBUAE has been steadily extending its reach beyond traditional monetary and supervisory functions into digital and settlement architecture. In February 2025, it signed an agreement with Abu Dhabi Securities Exchange to process cash settlements in dirhams for trades in listed instruments and related collateral transactions through the central bank network, with the arrangement explicitly described as adhering to IOSCO standards for central counterparty clearing and CSD services. In February 2026, it also announced what it called the world’s first sovereign financial cloud with Core42, again presenting the initiative as part of a resilience and competitiveness agenda.

For market participants, the strategic question is not whether the UAE already has depository structures, but how far the central bank intends to integrate them into a more unified framework. A stronger CBUAE role could help standardise settlement processes, reduce fragmentation across platforms and improve oversight of systemic risks in a market where bonds, exchange-traded funds and other instruments are expected to grow alongside equities. It could also support closer coordination between payment rails and securities settlement, an area that regulators globally have treated as increasingly important after repeated episodes of market stress and operational disruption.

VERMEG’s selection is notable because the company has an established profile in post-trade, collateral management and securities-processing systems. The firm has highlighted its Megara platform for securities services and has been involved in central-bank and market-infrastructure projects in Europe and Asia, including collateral and settlement-related work. That does not guarantee smooth execution in the UAE, but it indicates that CBUAE chose a specialist with experience in highly regulated environments rather than a general technology contractor.

The timing also intersects with a larger reshaping of the UAE regulatory landscape. Legal and regulatory changes this year have pointed to stronger institutional arrangements in capital markets, including new protection and settlement mechanisms under the new capital-markets framework. That means the CSD initiative is arriving at a moment when policymakers appear to be reworking the rules, infrastructure and supervisory architecture together rather than in isolation.

There are, however, practical issues that will determine whether the project becomes transformative or merely incremental. A central-bank-led depository architecture must coexist with exchange-linked entities, custodians, clearing functions and market members that already handle core parts of the post-trade chain. Any overlap in mandates, technology migration risks or delays in interoperability could complicate implementation. Market users will also want clarity on scope: whether the solution is meant to complement existing CSDs, connect them more tightly to central bank money settlement, or evolve into a broader national infrastructure layer across asset classes. Public material released so far sets out the ambition, but not the full operating blueprint.