They could be, if the uncertainties in the current laws are any indication. In a recent legal brief, Philip Jolowicz at Hadef & Partners outlines a couple of the main areas in which current laws lack clarity and could spur legal reform. Mr Jolowicz goes into them in detail, but I'll focus here on two key areas for those of you who don't have time to read the whole thing. Keep in mind, Jolowicz is talking mainly about laws that apply outside of the DIFC, a tightly-regulated environment where there's far more clarity about securities regulation.

• It's unclear what the rules are re: marketing and selling foreign securities in the UAE. Lawyers have developed a set of informal guidelines, but there's little legal backing for them. That means that when foreign companies come in and want to sell foreign securities to investors in the UAE, they could be open to enormous liabilities - or not. The law just doesn't say. Jolowicz:

Outside the DIFC and in the UAE, there is very little by way of hard letter law to guide those from outside the UAE who wish sell foreign securities. On the face of it, both the activity and the subject matter ... need licensing/approval by the Central Bank. However, a consensus has emerged that there is limited activity that may take place and which is 'tolerated' by the Central Bank.

The informal guidelines, which involve discreet private placements with plenty of disclaimers and no outright public marketing, have worked so farm, Jolowicz says, but "there are stirrings" that a more formal set of regulations could be on the way.

• It's not always clear who regulates what. Jolowicz cites the case of foreign exchange brokers and traders who set up in the UAE as a prime example. Are they regulated by the Emirates Securities and Commodities Authority or by the Central Bank? Forex trading "is heavily regulated and we have encountered situations where foreign companies thought they could conduct FOREX business under a particular free zone license but were mistaken," he writes.

Jolowicz concludes by noting a recent development that he believes is a precursor to more-robust securities laws in the UAE: a memorandum of understanding signed in February between the Central Bank and ESCA. The belief is, according to Jolowicz, that the "MOU is designed to pave the way for the enactment of an amended Federal Securities and Commodities Law."

The new law appears likely to prescribe a larger role for ESCA and a smaller role for the Central Bank in securities regulation. ESCA, Jolowicz says, would regulate funds and fund management that is done outside of the banks. ESCA will also regulate financial advisers and people who promote both local and foreign securities in the UAE. "Additionally," he writes, "ESCA will be responsible for the regulation of underwriting, public offers of securities, custodial services, clearing and settlement of securities trading, and commodities trading."

The Central Bank and ESCA would also form a committee to decide how to move licensees under Central Bank supervision into ESCA's orbit: currently, the Central Bank issues licenses to all sorts of financial firms to operate locally in the UAE.

Jolowicz again:

It is reasonably clear that the centre of regulatory gravity is going to shift from the Central Bank to ESCA, and whilst the practical improvements remain to be seen, this initiative represents a tremendous opportunity for uncertainties and anomalies to be addressed to the benefit of markets, investors and the professional financial community both in the UAE and abroad.