DIFC OTC Trading Surges to $13 Trillion as FX and Rates Activity Expands

Dubais international financial hub saw a sharp rise in over-the-counter market activity in the final quarter of 2025, with transaction value reaching $13 trillion. The figure is more than twice the level recorded a year earlier, underscoring a continued expansion in derivatives trading across the region.

The latest figures were published in the annual report of the Dubai Financial Services Authority, which attributed most of the increase to activity in foreign exchange and interest rate-linked instruments.

While the OTC numbers stood out in the report, the regulator placed greater emphasis on broader market development, including new firm registrations and Dubais position in global financial rankings.

Contents

01

Licensing Growth and Rising Global Standing

02

Derivatives Activity Concentrated in FX and Rates

03

Continued Inflow of Brokers and Liquidity Providers

04

Rising Compliance Pressure and Risk Indicators

05

Crypto Regulation Tightens as New Framework Takes Effect

06

About WikiFX

Licensing Growth and Rising Global Standing

During 2025, the Dubai International Financial Centre issued 182 new licenses, a 16% annual increase that pushed the total number of regulated entities to 1,050.

Dubai also improved its position in the Global Financial Centres Index, moving up to seventh place from 11th the previous year.

According to the DFSA, application volumes rose by 18%, supported in part by the rollout of its digital onboarding system, DFSA Connect, which streamlined authorization procedures for financial firms.

Derivatives Activity Concentrated in FX and Rates

The regulator linked the surge in OTC trading to a wider participant base and stronger client demand, as Dubai continues to function as a connector between Asian, European, and American trading sessions.

Most of the activity was concentrated in derivatives, particularly foreign exchange and interest rate products, reflecting the institutional nature of flows into the DIFC.

This trend has been reinforced by expanding institutional participation. TP ICAP significantly increased its Dubai presence over the past year, positioning the centre as a bridge between MENA liquidity and global markets.

Banking activity also expanded. Combined balance sheets of DIFC-based banks reached $251 billion at the end of 2025, representing a 19% annual increase.

Continued Inflow of Brokers and Liquidity Providers

New entrants in 2025 spanned retail brokerage, institutional liquidity, and payment services.

Retail FX and CFD broker Fortrade obtained a DIFC license in November, while liquidity provider B2PRIME secured DFSA authorization earlier in August through its MENA-focused entity, including approval to hold client assets.

Leverage conditions remain a competitive factor. The DFSA allows up to 50:1 leverage on major currency pairs for retail clients, higher than limits in both the EU and UK. This regulatory structure has made DIFC-based entities a common distribution channel for firms targeting regional markets.

Some firms reported significant exposure to the region. Capital.com said more than half of its first-half 2025 trading volume, about $800 billion, originated from MENA.

The asset management segment also continued to grow. DIFC now ranks among the worlds top five hubs for hedge funds, with registered funds doubling to 87. Across the broader wealth and asset management sector, assets under management reached $176 billion.

Rising Compliance Pressure and Risk Indicators

Alongside expansion, supervisory activity has increased notably.

The DFSA issued 49 investor alerts in 2025, up 69% from the previous year, and received 705 complaints, a 5% increase. More than half of the complaints involved entities or individuals outside its regulatory scope.

Enforcement activity included 17 investigations and seven completed cases, with action taken against one individual. The regulator also highlighted concerns over “bait-and-switch” structures involving firms operating across multiple jurisdictions.

Cybersecurity risks also became more prominent. Notifications of cyber incidents rose by 91%, while identified cyber risk breaches increased by 153% through targeted supervisory reviews.

DFSA Enforcement Managing Director Alan Linning noted in the report that firms are being encouraged to adopt a more forward-looking approach to risk management.

Crypto Regulation Tightens as New Framework Takes Effect

Updated rules for crypto tokens came into force in January 2026 following final approval in December.

Under the revised framework, responsibility for assessing token suitability now rests with licensed firms, supported by stronger governance and disclosure requirements.

The DFSA also recognized three stablecoins for use within regulated financial services: Circle‘s USDC and EURC, along with Ripple’s RLUSD.

About WikiFX

WikiFX is a global forex broker information and verification platform that provides users with regulatory data, risk monitoring, and broker background insights. It aims to improve transparency in the financial services industry by helping traders assess brokers more effectively before making investment decisions.