On 6 August 2026 the UAE Capital Market Authority issued a survey to licensed entities seeking information on their adoption and use of artificial intelligence.

A survey is not a rule. It is usually what precedes one.

What a supervisor will eventually want to see. Which decisions the model touches. Whether a human approves before anything leaves the firm. What the model was given as input, and whether that input can be reproduced. Who owns the model when it goes wrong.

The practical implication. Firms that adopted AI through unlogged desktop tools will struggle to answer any of that. Firms that built it into the workflow, with inputs drawn from their own records and an approval step recorded, can answer all four from the system.

This is the argument for treating AI as infrastructure rather than as an assistant. The difference only becomes visible when someone asks.

The DFSA held a webinar on 11 August 2026 covering Consultation Paper 173, which proposes enhancements to the Collective Investment Fund framework in the DIFC.

The direction signalled is a shift toward something more principles-based, proportionate and commercially flexible, with Qualified Investor Funds and Exempt Funds the main beneficiaries.

Why this matters operationally. Proportionate regimes move obligation from prescribed forms toward demonstrable outcomes. That is easier to comply with and harder to evidence. The burden shifts from filling in the template correctly to showing that the control actually operated.

What to prepare. Evidence trails rather than filled forms. A record of what was checked, when, by whom, and what happened when something failed.

Running alongside this, the DFSA published the 2026 AML Return template on 8 August, due through the e-Portal by 30 September 2026. The ADGM's FSRA has its own legislative update session on 17 September, with IOSCO alignment among the themes.

Both free zones are moving in the same direction within the same quarter, which is worth noting for anyone structured across the two.

SEBI's Master Circular of 3 June 2026 consolidates every directive issued up to 31 May 2026 and supersedes the May 2024 version. Three changes reach into daily operations.

Certification. NISM certification becomes mandatory for key investment personnel and for AIF compliance officers from 1 January 2027. Funds with thin compliance benches should be planning cover now, not in December.

Dematerialisation. Schemes must issue units in demat form and credit them to investor accounts, with an Aggregate Escrow Demat Account available where allotment timing requires it. The unit register stops being a spreadsheet and starts being a depository reconciliation.

Reporting. The revised Quarterly Activity Report format applies from the quarter ending June 2026, filed on the SI Portal within fifteen calendar days. The March quarter no longer carries a separate QAR — the Annual Activity Report captures it.

The operational consequence is that quarter-end became a fifteen-day sprint with a depository dependency in the middle of it. Funds still assembling the QAR by hand will feel that.

Federal Decree-Law No. 32 of 2025 established the Capital Market Authority, which succeeded the Securities and Commodities Authority on 1 January 2026. Federal Decree-Law No. 33 of 2025 sets out the substantive Capital Markets Law, including a statutory prospectus liability regime that did not previously exist in codified form.

Existing SCA decisions remain in force where they do not conflict with the new law. That is the trap: documents drafted against the SCA rulebook are not automatically wrong, but they are no longer automatically right either.

Entities within scope must regularise their status by 1 January 2027.

What this touches. Offering documents naming the SCA. Promotion arrangements with local distributors. Passporting notifications from DIFC or ADGM into the mainland, which continue to operate but now route to a differently named authority. Any marketing that reaches a mainland investor, including from inside a free zone.

Managers should be running a document inventory now and deciding which items need re-papering versus a note to file.

The Saudi CMA issued the Instructions for Simplified Investment Funds under Board Resolution No. 1-26-2026 on 2 March 2026. The regime sits outside the general Investment Funds Regulations and targets institutional capital.

Speed. The mandatory fifteen-day CMA review of an offering application is gone. A manager notifies the CMA in writing before the proposed offering date and submits a declaration. In practice a fund can launch in under fifteen business days.

Cost. The custodian appointment requirement falls away for funds structured through a special purpose entity.

Flexibility. Managers can set termination rights, unit class characteristics, reporting cadence, term amendments and unitholder meeting requirements contractually, closer to how a Cayman or Luxembourg vehicle is documented.

Units are offered by private placement to institutional clients only, and secondary transfers are restricted to the same category. Annual financial statements follow SOCPA standards and must be audited by a CMA-registered auditor.

Separately, the Financing Investment Fund instructions of February 2026 consolidated direct and indirect financing funds, and from April 2026 these may be publicly offered and listed on the Main Market and Nomu.

IFSCA issued three circulars in the first half of April 2026, moving the GIFT City fund management regime toward tighter professional accountability.

Certification. Any employee engaged in fund management activity must be certified, regardless of designation. Support and non-operational roles, and those attached to trustees, intermediaries and fund administrators, sit outside the requirement.

KMP appointments. IFSCA review before appointment has been removed. The accountability shifts onto the Fund Management Entity, which removes a delay but raises the cost of getting it wrong.

Fiduciary segregation. The circular of 10 April 2026 on segregating the roles of scheme fiduciaries arrived without a prior consultation paper. FMEs must comply by 30 September 2026.

For FMEs running lean teams, the segregation requirement is the one that forces a structural answer rather than a policy document.

SEBI's co-investment framework under Regulation 17A gives Category I and II AIFs a route to offer co-investment to accredited investors without a separate portfolio manager registration. The structuring win is real. The operational load is underestimated.

Separate everything. Each CIV scheme needs its own bank account and its own demat account, with assets ring-fenced between schemes. That is a new set of reconciliations per deal, not per fund.

The 3x cap. An investor's contribution to a portfolio company through CIV schemes cannot exceed three times their contribution to that company through the main scheme. Development finance institutions, government entities and sovereign funds are exempt. Someone has to compute and monitor that ratio per investor per company.

Parity and co-terminus exit. Co-investment terms cannot be better than the main scheme's terms for the same investee, and the exit must align with the main scheme's exit for that company.

Expense apportionment. Costs are split between the AIF and the CIV scheme in the ratio of their investments in the investee company.

Compliance with the circular is reported by the manager to the trustee and sponsor as part of the annual Compliance Test Report. A fund running five co-investments across three vintages is now running fifteen sets of books.

Under the Corporate Tax Law and Cabinet Decision No. 34 of 2025, a Qualifying Investment Fund is treated as an exempt person. The conditions are arithmetic, which means they can be monitored — and therefore must be.

Ownership diversity. A juridical investor must look through and include its share of QIF net profit where it holds, with related parties, at least 30 percent in a fund with fewer than ten investors, or 50 percent in a fund with ten or more.

Grace periods. The test does not apply in the first two financial years of a new QIF where a wider spread is expected, and breaches shorter than ninety days can fall outside it.

Property ceiling. Where UAE immovable property exceeds 10 percent of fund assets, a juridical investor may need to include 80 percent of its share of that income.

Housekeeping. A QIF cannot form part of a Tax Group, cannot use Qualifying Group Relief or Business Restructuring Relief, must keep records for seven years and must file an annual declaration confirming it still meets the conditions.

A breach costs the concerned investor the benefit, not the whole fund. That is a meaningful mercy, and it is also why per-investor monitoring belongs in the system rather than in a year-end review.

The surveys agree on the direction and disagree on nothing except the size of the gap. Around 86 percent of corporate and private equity dealmakers report using generative AI. Some 95 percent of private equity firms have begun or plan agentic AI in operations during 2026.

Then FTI's 2026 survey of 200 fund and operating leaders found that only 36 percent say their portfolio companies use AI in day-to-day operations, and 7 percent call it fully integrated.

The distance between intent and integration is the whole story. Pilots are easy. A reconciliation that runs unattended every night and escalates only genuine breaks is not.

Where the returns actually sit. Middle-office work — LP reporting, valuation support, compliance monitoring, AML screening — is consistently described as the lowest-risk, quickest-payback category and the most persistently underinvested.

What regulators now expect. With 96 percent of financial institutions adopting AI governance controls, supervisors increasingly assume machine-readable rulesets and automated checks rather than retroactive review.

The practical lesson: modular beats monolithic. Managers restructuring workflows into components that an agent can own are capturing the advantage. Those waiting for one system to do everything are still waiting.

Valuation disputes rarely turn on methodology. They turn on whether the manager can show what was known, when it was known, and why an assumption moved.

Version history matters more than precision. A discount rate that changed between Q2 and Q3 is a normal event. A discount rate that changed with no recorded reason is a finding.

Live data beats refreshed workbooks. Where the valuation model pulls from the same ledger and portfolio records the fund already maintains, the reconciliation between reported NAV and valuation support disappears as a task.

Independence has to be visible. Where a jurisdiction requires an independent valuer, the separation between the party running the model and the party signing it needs to be evident in the file, not merely true.

IPEV guidelines and the IFRS 13 fair value hierarchy give the framework. The operational question is whether producing the file costs three days or three weeks each quarter.

A manager running an onshore AIF, a GIFT City feeder and an ADGM vehicle is not running one reporting cycle. They are running several, against different formats, different deadlines and different accounting frameworks — from the same underlying positions.

The failure mode is divergence. Each entity's numbers get prepared by whoever owns that entity, in that entity's template. By the time anyone consolidates, the same portfolio company carries three slightly different fair values.

The fix is upstream. One valuation record, one position record, one cash record, with entity-level presentation applied at the reporting layer rather than at the data layer.

Calendars should be one calendar. SEBI's fifteen-day QAR window, IFSCA's periodic returns, and Gulf free-zone filings do not coordinate with each other. A single filing calendar with owners and evidence attached is the difference between a controlled quarter and a scramble.

Consolidation is not a spreadsheet exercise performed at year end. It is a data-model decision made at setup.