The Central Bank of the United Arab Emirates (CBUAE) issued its new Remuneration Regulation for Banks and Insurance Companies (Circular No. 5/2026) (the Regulation) on 13 March 2026, introducing a comprehensive governance framework addressing remuneration across UAE-regulated banks and insurance companies. The Regulation came into effect on 14 April 2026.
The Regulation applies to all banks and insurance companies regulated by the CBUAE, with implementation required within 15 months of its effective date. Institutions must also assess their existing remuneration frameworks within 180 days of the Regulation coming into effect and report their findings and implementation plans to the CBUAE.
A Shift from Remuneration to Governance
The Regulation makes clear that remuneration is no longer viewed as simply an HR or compensation issue. Instead, remuneration must form part of an institution's overall governance and risk management framework.
Financial institutions are now required to maintain a Board-approved remuneration framework that, among other things
Institutions must review their remuneration framework at least annually, with an independent comprehensive review taking place every three years.
Increased Board Accountability
The Regulation significantly expands the Board’s...
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