The IMC said the UDA has plenty of room for improvement
The number of loyalist paramilitary assaults has increased sharply, Northern Ireland's ceasefire watchdog has said.
The Independent Monitoring Commission said that between March and August, 38 people were attacked - the highest number in almost four years.
This figure was more than double the amount in the previous period.
It said members of the UDA and UVF were involved in events leading to the death of Coleraine man Kevin McDaid in May.
The commissioners added that they believed those involved were acting without the approval of paramilitary leaders.
The report published on Tuesday contains a detailed assessment of activity carried out by each paramilitary group.
On the UDA, the commissioners welcomed the announcement in September that it had begun decommissioning its weapons and is expected to get rid of all its arms by the February deadline.
The commissioners said they were encouraged by this progress, and praised UDA leaders for changing the organisation.
"In some areas the leadership has shown remarkable commitment and progress in community development, a fact acknowledged by all sections of the local community in those areas," they said.
"Across the organisation as a whole, however, much remains to be done."
It said that following the murders of three security forces members in March, there was some intelligence gathering about dissident republicans, some of which happened with the knowledge of senior members.
The report said the UDA remained effectively split into two distinct groups - the mainstream UDA and the South East Antrim group.
It said members of both factions remained involved in a range of criminal activity.
Regarding the UVF/Red Hand Commando, it said the completion of decommissioning in September was "a very significant and positive development".
"We increasingly see a picture of an organisation on its way to going out of business as a paramilitary organisation, though that might not preclude the maintenance of some form of association for past members," it said.
The IMC said it believed UVF leaders took steps to prevent a violent reaction to the dissident republican killings of two soldiers and a policeman.
"The organisation has expelled members who have acted in a way unacceptable to the leadership.
"Senior members have continued to take steps to reduce criminality amongst the membership."
Despite the progress made, the IMC said some members were involved in a wide range of criminal activity for personal gain.
"We cannot rule out that some arms have been retained in some parts of the organisation or that individual members have sought to acquire weapons on an ad-hoc basis outside the organisation's strategy," it said.
The commissioners said they expected the progress made during the period under review to continue, "including giving active support to the police".
On the Loyalist Volunteer Force, it reiterated its assessment of the group as a "small organisation without any political purpose".
The Independent Monitoring Commission was set up by the British and Irish governments in January 2004.