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  • 2010

    • 1 December 2010 — DFSA Congratulates New UAE National Regulators

      Dubai, UAE, 1 December 2010: The Dubai Financial Services Authority (DFSA) holds its annual Tomorrow's Regulatory Leaders (TRL) Awards later today. The purpose of the awards is to congratulate Emirati employees who have completed the DFSA's two-year TRL Programme.

      The programme prepares newly graduated UAE Nationals to become financial services regulators. A combination of in-house training and coaching by experts from international financial centres and examinations from the Chartered Institute of Securities and Investments (UK) makes the TRL Programme a unique development programme. Graduates join as TRL Associates and over the two years undergo over 400 hours of class room training along with on-job coaching from their more experienced DFSA colleagues. They also benefit from regular mentoring and industry placements within Dubai International Financial Centre (DIFC) Firms.

      Mr Paul Koster, Chief Executive of the DFSA said, "We take our obligations to the financial services community very seriously. To be a good regulator is to understand the challenges and market conditions your regulated community is facing. This is difficult at any stage of a regulator's career but more so when you are first starting out. DFSA is working closely with many DIFC-based Firms to provide our trainees with the opportunity to work in financial services institutions as part of the TRL Programme, so they can better understand our regulated community.

      Almost 95% of the TRL Programme is delivered by our regulatory colleagues who write and deliver training material or coach our trainees on a daily basis, where they benefit from a wealth of regulatory experience and gain an international perspective. In our awards today we not only celebrate the success of our young Emirati colleagues, but also recognise the considerable efforts and enthusiasm our trainers and coaches have shown over the last year.

      In line with our core regulatory mission, the TRL Programme is one of our most important strategic initiatives. We place great importance on developing the next generation of regulatory leaders."

      Mr Abdullah Saleh, Chairman of the DFSA said, "We are proud to say that 26% of our regulators are UAE Nationals. Since inception we have graduated nine managers with another ten trainees currently going through the Programme. The success of this programme is very important to the DFSA and we will continue our efforts to deliver sustainable and enduring benefits to the UAE, by developing young Emiratis for long-term careers in financial services regulation."

    • 3 November 2010 — DFSA Signatory to IAIS Multi-lateral Memorandum of Understanding: A First for the GCC

      Dubai, UAE, 3 November 2010: At the concluding meeting of the Executive Committee of the International Association of Insurance Supervisors (IAIS) held in Dubai last week, the Chairman of that committee, Mr Peter Braumüller, announced that the Dubai Financial Services Authority (DFSA) had been accepted as a signatory to the IAIS Multi-lateral Memorandum of Understanding (MMoU).

      The MMoU is a framework for co-operation and the exchange of information between insurance supervisors to facilitate effective oversight of insurance and reinsurance companies which are active in more than one jurisdiction. It sets minimum standards to which signatories must adhere and these include the purposes for which information provided by another insurance supervisor can be used and the confidentiality of information received. The growing number of internationally active insurance companies, the increasing integration of financial markets and the global financial crisis highlight the importance of a MMoU to further support supervisory liaison and co-operation. It allows a supervisor receiving a request for information to provide that information quickly and effectively.

      The MMoU was signed on behalf of the DFSA by its Chief Executive, Mr Paul Koster. Mr Koster said, "I am particularly delighted to see that the DFSA has satisfied the highest level of co-operation standards that exist between international insurance supervisors. Acceptance as an IAIS multi-lateral MoU signatory is only permitted after rigorous assessment of the authority's legislative and regulatory regime. In the DFSA's case, this was conducted by a specialist team from four countries, confirmed by a group from another eight jurisdictions and finalised with an endorsement from the Chairs of IAIS's three senior committees."

      "The DFSA has established best practice utilising a modern legal framework and a risk-based approach to its supervisory measures. In signing this multi-lateral MoU, the DFSA further affirms its commitment to international co-operation, which is an essential requirement in today's changing business environment. Since 2005, the DFSA has placed a high priority on building its co-operative channels, which also now includes a bi-lateral MoU network with around fifty supervisors and regulators regionally and across the globe."

      The DFSA is the only regulator in the GCC, and the first in the Arab World, to be admitted as a signatory. The DFSA joins existing signatories representing the world's major insurance markets, including France, Germany, Australia and Singapore.

    • 27 October 2010 — DFSA Hosts Global Insurance Summit Today

      Dubai, UAE, 27 October 2010: The Dubai Financial Services Authority (DFSA) hosts, today, the world's policy makers and insurance leaders, in Dubai. The 17th Annual Conference of the International Association of Insurance Supervisors (IAIS) is a two day event commencing today at the Grand Hyatt Conference Centre.

      The Chief Executive of the DFSA, Mr Paul Koster said: "The theme of this year's conference is 'The Gateway to Trust in the Insurance Industry.' The global financial crisis has reminded us all of the critical importance of trust in financial institutions and markets as a pillar to financial and economic stability."

      "Activity in the UAE insurance sector has continued to expand throughout the crisis and has a buoyant outlook. There are significant opportunities in the region's insurance market and the outlook for the Gulf's insurance sector is robust. Over the coming days delegates should gain a deeper understanding of emerging industry trends and regulatory developments."

      The DFSA would like to thank the UAE Insurance Authority, DIFC, PWC, RGA, Deloitte, Metlife, Swiss Re and all the other sponsors for the support it has received.

    • 10 October 2010 — DFSA Signs Accounting Standard-Setters MoU

      Dubai, UAE, 10 October, 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with the Asian-Oceanian Standard-Setters Group (AOSSG), last month.

      In doing so, the DFSA joins standard-setting bodies from Australia, Brunei, Cambodia, China, Hong Kong, Indonesia, India, Iraq, Japan, Kazakhstan, Korea, Macao, Malaysia, Nepal, New Zealand, Oman, Pakistan, Philippines, Saudi Arabia, Singapore, Sri Lanka, Thailand, Turkey and Uzbekistan.

      The MoU sets out the four objectives of the AOSSG:

      •   Promoting the adoption of, and convergence with, International Financial Reporting Standards (IFRSs) by jurisdictions in the region;
      •   Promoting consistent application of IFRSs by jurisdictions in the region;
      •   Co-ordinating input from the region to the technical activities of the International Accounting Standards Board (IASB); and
      •   Co-operating with governments and regulators and other regional and international organisations to improve the quality of financial reporting in the region.

      Mr Paul Koster, Chief Executive of the DFSA said, "As the regulator of the DIFC which sets IFRS as the statutory standard for accountants practicing in the Centre, the DFSA is very pleased to join the Asian-Oceanian Standard-Setters Group. The endorsement and promotion of IFRS, through the MoU and working committees, is a critical initiative for achieving global transparency and consistency and the DFSA is committed to participating in the important work of the AOSSG."

    • 4 October 2010 — DFSA Launches Arabic Website

      Dubai, UAE, 4 October 2010: The Dubai Financial Services Authority (DFSA) announced the launch of an Arabic version of its website, www.dfsa.ae. This is part of the Authority's strategy to realise its communication endeavours in Arabic, and this initiative accompanies the DFSA's various regulatory publications, also written in Arabic.

      The Chief Executive of the DFSA, Mr Paul Koster said: “Ensuring we meet the needs of our stakeholders is paramount to the DFSA. We consider communication in the native tongue an important aspect in establishing dialogue with the broader market and I am pleased that, today, we are able present our services in the language of the region.”

      “This initiative is a reflection of our efforts to more effectively reach a wider audience in the financial services industry.”

      The DFSA will consider the translation of the Laws and Rules, in due course, but for the moment, they will remain in English. The website pages now available in Arabic include: About the DFSA, Doing Business with the DFSA, Tomorrow's Regulatory Leaders, Islamic Finance, Legal Framework and Contact the DFSA.

    • 10 August 2010 — DFSA Signs MoU With Banco de Portugal

      Dubai, UAE, 10 August 2010: The Dubai Financial Services Authority (DFSA) has recently entered into an agreement with the Portuguese banking supervisor, Banco de Portugal. The Memorandum of Understanding (MoU) commits the DFSA and Banco de Portugal to information sharing and co-operation in the supervision of financial institutions.

      The MoU was signed on behalf of the DFSA by Chief Executive, Mr Paul Koster, having been signed earlier in Lisbon by Mr Carlos da Silva Costa, Governor of Banco de Portugal.

      The Chief Executive of the DFSA, Mr Paul Koster said: "I am very pleased to have signed this agreement with Governor da Silva Costa as this initiative reflects each agency's commitment to co-operation in relation to prudential oversight and inspections of authorised institutions in Portugal and the Dubai International Financial Centre (DIFC). It adopts the model for information sharing developed by the Basel Committee on Banking Supervision and acknowledges the call of the G20 and the Financial Stability Board promoting global adherence to international co-operation and information exchange standards."

      "Given the international nature of the Centre, the DFSA has always valued the importance of its links with and trust between supervisors and regulators. We now have a bi-lateral MoU network with more than 50 fellow regulators, including the central banks and banking supervisors in the UAE, UK, US, Canada, France, Germany, the Netherlands, Belgium, South Africa, Jordan, China, Singapore, and Japan."

    • 11 July 2010 — DFSA Enters Into MoU With Danish Counterpart

      Dubai, UAE, 11 July 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with Finanstilsynet, the Danish Financial Supervisory Authority, last week.

      The MoU was signed on behalf of the DFSA by Chief Executive, Mr Paul Koster, and by Mr Ulrik Nodgaard, the Director General of Finanstilsynet. The Danish FSA is responsible for the supervision of financial institutions, such as banks, mortgagecredit institutions, pension and insurance companies. The Finanstilsynet also supervises the securities markets in Denmark.

      The Chief Executive of the DFSA, Mr Paul Koster said: "Both the DFSA and Finanstilsynet are pleased to be signatories to the International Organisation of Securities Commissions multi-lateral MoU, which sets the highest standards for cooperation and assistance among securities regulators. Our bi-lateral MoU with Finanstilsynet reflects the broader responsibilities of each authority and extends this co-operation beyond the field of securities, and beyond the area of enforcement, to embrace licensing, inspection, surveillance and anti-money laundering functions covering banking, insurance and securities activity in Denmark and the Dubai International Finance Centre."

      "This initiative strengthens the Finanstilsynet and the DFSA's relationship as home-host regulators of Danish firms and reflects each authority's commitment to cooperation in relation to supervisory oversight and inspections."

    • 20 June 2010 — DFSA Signs MoU With Canadian Banking Regulator

      Dubai, UAE, 20 June 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with the Office of the Superintendent of Financial Institutions of Canada (OSFI), last week.

      The MoU was signed, first, on behalf of the DFSA by Chief Executive, Mr Paul Koster, and subsequently in Ottawa by Mr Mark White, the Assistant Superintendent, Regulation Sector, of OSFI. OSFI is responsible for regulating and supervising all federally chartered, licensed or registered banks, insurance, trust and loan companies, co-operative credit associations and fraternal benefit societies in Canada.

      The Chief Executive of the DFSA, Mr Paul Koster said: “The attraction of the Dubai International Financial Centre (DIFC) as the domicile of choice for Canadian financial institutions in the Middle East will be further enhanced by this regulatory relationship. This initiative reflects each agency's commitment to co-operation in relation to prudential oversight and inspections. It adopts the model for information sharing developed by the Basel Committee on Banking Supervision and follows similar arrangements the DFSA has with other significant banking supervisors in the UK, Germany, France, the US, Japan, Singapore and China.”

      “The global financial crisis has reinforced the importance of effective dialogue and collaboration between banking supervisors. Agreements of this kind will help that process.”

      “Since 2005 the DFSA has placed a high priority on building its information network. As a result of this signing, we now have a bi-lateral MoU network with fifty regulators regionally and across the globe.”

    • 15 June 2010 — DFSA Signs MoU With Leading US Banking Regulator

      Dubai, UAE, 15 June 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with the New York State Banking Department regarding co-operation and exchange of information, last week.

      The Department is the primary regulator for state-licensed and state-chartered financial entities, including domestic banks, foreign agencies, branches and representative offices, savings institutions and trust companies, credit unions and other financial institutions operating in New York including mortgage bankers and brokers, check cashers, money transmitters, and licensed lenders, among others.

      Total assets of the institutions regulated are nearly AED 8.8 trillion (USD 2.4 trillion). A branch of one of these banks is authorised to carry out financial services in and from the Dubai International Financial Centre (DIFC) and is supervised by the DFSA.

      The MoU was signed by Mr Paul Koster, Chief Executive of the DFSA, and Mr Richard Neiman, New York State's Superintendent of Banks, at the Department's headquarters, in New York.

      The Chief Executive of the DFSA, Mr Paul Koster said: “I am very pleased to have concluded this arrangement with Superintendent Nieman and the DFSA is honoured to have formalised its relationship with the oldest banking regulatory agency in the United States. As co-supervisors of a common institution operating in New York and in the DIFC, the State Banking Department and the DFSA are committed to enhancing co-operation and information sharing in relation to this bank, and any others that may follow in future.

      “This memorandum was drafted in light of the Basel Principles for Effective Banking Supervision and complements another MoU established by the DFSA in October 2007 with the four US Federal banking supervisors - the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTC), to ensure a coordinated approach between home and host supervisors of a number of significant US banks.”

    • 21 March 2010 — DFSA Takes Action Over Damas Failures

      Dubai, UAE, 21 March 2010: The Dubai Financial Services Authority ("DFSA") today announced remedial action and enforcement sanctions against Damas International Limited ("Damas") and its Board of Directors ("Board") for their failure to exercise appropriate corporate governance over the company and its subsidiaries.

      The remedial action includes the resignation of the Damas Board, the appointment of a new Board to govern Damas, and measures to enhance the governance, systems and controls of Damas so as to protect the company, its assets and shareholders' interests. Damas has also agreed to the appointment of new auditors for the fiscal year commencing 1 April 2010.

      The sanctions include financial penalties against Damas, Tawhid, Tawfique and Tamjid Abdullah, ("Abdullah Brothers") and voluntary bans, for periods up to 10 years, on the Abdullah Brothers from acting as Directors of Damas or any company in the Dubai International Financial Centre ("DIFC").

      Today's announcement follows an investigation by the DFSA into "unauthorised transactions" that were announced to the market by Damas on 15 October 2009. The Chief Executive of the DFSA, Mr Paul Koster said: "Maintaining international governance standards and internal systems and controls as well as ensuring investor confidence is fundamental to the integrity of the market in the DIFC.

      This action will remind Directors of public companies that they owe a duty to the company and their shareholders, which supersedes any duty they have to their private interests.

      The range of measures, announced today, will assist Damas to conduct its business in accordance with the Laws and Rules of this jurisdiction."

      "In pursuing the objectives of the DIFC, the DIFC Registrar of Companies and the DFSA collaborated and concurred on the foregoing measures in its regulatory efforts to enhance corporate governance within Damas." Koster said.

      Enforceable Undertaking:

      A copy of the Enforceable Undertakings between the DFSA, Damas, the Abdullah Brothers and each non-Executive Director is posted on the DFSA website:

      https://www.dfsa.ae/What-We-Do/ENFORCEMENT#Regulatory-Actions

      Summary of the Findings of the DFSA's Investigation:

      The investigation found that the amount owing by Tawhid, Tawfiq and Tamjid Abdullah ("Abdullah Brothers") to Damas International Limited ("Damas") comprised of approximately AED 365, 000,000 (USD 99,400,000) plus the value of approximately 1,940,250 grams of gold, the price of which is to be fixed on a date agreed by Damas and the Abdullah Brothers.

      These drawings required the prior approval of the Damas International Limited ("Damas") Board of Directors ("Board") and/or shareholders of Damas, which was not obtained.

      The DFSA found that:

      •    The Abdullah Brothers contravened DFSA Laws and Rules in that they:
      •    Engaged in the practice of withdrawing Damas funds for their own personal use and did not disclose the drawings or other transactions to, or seek the approval of, the Board; and
      •   Obtained the drawings as loans from Damas on non-commercial terms.
      •    Tawhid Abdullah contravened DFSA Laws and Rules in that he failed to disclose, immediately, to the Board:
      •    The drawings;
      •    The use to which the drawings would be put; and
      •    His interest in properties sold to Damas.
      •    Tawfique and Tamjid Abdullah contravened DFSA administered Laws and Rules in that they failed to make adequate and reasonable enquiries into the transfer, purpose and use of the drawings of Damas funds.
      •    Tawfique Adbullah, as Chairman, failed to provide to the Board information about the directors drawings, in a timely manner, and in a form and of a quality appropriate to enable the directors to discharge their duties.
      •    Damas and its Board contravened DFSA Laws and Rules in that they failed to establish and maintain appropriate systems and controls to:
      •    Safeguard shareholders' investments and the assets of Damas;
      •    Ensure the Damas Chairman supplied the Board with sufficient information to carry out its functions; and
      •    Ensure the Audit Committee carried out its functions.
      •    Damas also failed to:
      •    Disclose, without delay, the nature, content and details of the drawings; and
      •    Obtain the consent of shareholders to provide financial assistance to the Abdullah Brothers.

      The Undertakings

      Damas, each of the non-Executive Damas Directors and the Abdullah Brothers have entered into Enforceable Undertakings (EUs) with the DFSA. In particular Damas and the Board have accepted the DFSA's position regarding their corporate governance failures and agreed to implement a range of corporate governance measures and controls. These include that Damas:

      •   Obtains the resignation of each non-Executive Board Member of his and her directorship within 30 days of the EU, and that each not seek reappointment to the Board for a period of 2 years;
      •    Calls an extraordinary general meeting of shareholders to appoint a new Board within 30 days of the EU;
      •    Appoints, and appropriately allocates and apportions, Board and senior management responsibilities;
      •    Establishes appropriate measures to ensure the Board receives the information it requires to act on an informed basis;
      •    Establishes appropriate and proper systems and controls;
      •    Appoints a full-time Compliance Officer and Company Secretary;
      •    Establishes appropriate measures to manage and mitigate risk;
      •    Agrees to appoint a new auditor;
      •    Pays a financial penalty in the amount of AED 2,569,000 (USD 700,000), of which AED 367,000 (USD 100,000) is to be paid within 30 days of the EU with the balance suspended but payable upon a failure by Damas to comply with a term or condition of the EU; and
      •    Pays the cost of the DFSA's supervision of compliance with the EU in the amount of AED 92,000 (USD 25,000).

      The Abdullah Brothers have undertaken to:

      •    Repay the amount owing to Damas;
      •    Disclose and particularise to Damas each of their assets over a value of AED 300,000 (USD 82,000);
      •    Grant to Damas a legal mortgage or other enforceable security over their assets;
      •    Resign as Directors of Damas, within 30 days of the EU and its subsidiaries within a timeframe suitable to the DFSA;
      •    Not act as a Director or Officer of Damas and any DIFC company for periods of 5 and 10 years;
      •    Pay the costs of the DFSA investigation; and
      •    Pay a financial penalty in the amount of AED 11,010,000 (USD 3,000,000), of which AED1,101,000 (USD 300,000) is to be paid within 180 days of the EU with the balance suspended but payable upon a failure, by any of the Abdullah Brothers, to comply with a term or condition of the EU.

    • 10 March 2010 — DFSA Launches Electronic Islamic Finance Handbooks

      Dubai, UAE, 10 March 2010: The Dubai Financial Services Authority (DFSA) has launched a series of electronic Islamic finance tailored handbooks, designed to help Firms undertaking Islamic finance activities in the Dubai International Financial Centre (DIFC).

      The Islamic finance handbooks are designed to assist with the identification of the DFSA's Rulebook requirements applicable to financial activities conducted as Islamic or Shari'a compliant.

      The five tailored handbooks relate to five different types of Islamic finance activities. Each handbook contains the parts of the DFSA Rulebooks which apply to that particular area of activity namely:

         • Islamic Banking;
         • Islamic Investment Business, other than Operating Funds;
         • Islamic Insurance;
         • Islamic Insurance Intermediation and Management; and
         • Operation of Islamic Funds.

      The Chief Executive of the DFSA, Mr Paul Koster said: "Islamic finance has witnessed tremendous growth and as such is an important area of focus for the DFSA. We want to provide the industry with improved access to our framework of Laws and regulations which is why we have created the Islamic finance tailored handbooks. By improving our delivery of information to Firms conducting Islamic finance activities, we hope that the handbooks will help Firms access the requirements that apply to their Islamic finance activities more easily."

      The electronic handbooks are available on

      www.dfsa.ae/Pages/LegalFramework/IslamicFinance

    • 7 March 2010 — DFSA Enters Into Memorandum of Understanding With French Markets Authority

      Paris, France, 7 March 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with the Autorité des marchés financiers of France (AMF), the French securities regulator, on Friday.

      The signing took place between Mr Paul Koster, Chief Executive of the DFSA, and M Jean-Pierre Jouyet, Chairman of the AMF.

      The AMF is France's independent public body responsible for safeguarding investments in financial instruments and in all other savings and investment vehicles; for ensuring that investors receive material information; and for maintaining orderly financial markets. The AMF also lends its support to financial market regulation at European and International levels.

      The Chief Executive of the DFSA, Mr Paul Koster said: "The Autorité des marchés financiers has been a valued member of the International Organisation of Securities Commissions (IOSCO) and an active participant in the work of the Committee of European Securities Regulators (CESR), adopting and harmonising international standards in Europe and continuing to establish world-class standards in the regulation of capital markets. As such, this MoU is a significant initiative, recognising the importance of these arrangements for co-operation and information sharing between the two regulators."

      Both the AMF and the DFSA are signatories to the IOSCO multi-lateral MoU, having satisfied the highest standards of co-operation and assistance among IOSCO members. It is enhanced by today's bi-lateral agreement which reflects each agency's responsibilities in the regulation of securities.

      This initiative reflects France's continuing commitment to the UAE, as the AMF al enjoys a significant and warm relationship with our federal counterpart, the Emirates' Securities and Commodities Authority (SCA), having signed a bi-lateral MoU in April 2009. Reflecting its status as an integrated regulator, the DFSA also has an MoU with Commission Bancaire, France's banking supervisor, signed in August 2008.

      "As a result of this signing, the DFSA now has a bi-lateral and multi-lateral MoU network with 90 regulators across the globe, which underlines the importance of effective co-ordination and co-operation", Mr Koster said.

    • 23 February 2010 — DFSA Strengthens Ties With The QFC Regulatory Authority

      Doha, Qatar, 23 February 2010: The Dubai Financial Services Authority (DFSA) entered into a Memorandum of Understanding (MoU) with the Qatar Financial Centre (QFC) Regulatory Authority, yesterday.

      The MoU was signed on behalf of the DFSA by Chief Executive, Mr Paul Koster, and Mr Phillip Thorpe, Chairman and Chief Executive Officer of the QFC Regulatory Authority, during the 4th GCC Regulators' Summit, held in Doha.

      The QFC Regulatory Authority was established in 2005 as the independent regulatory body of the Qatar Financial Centre. It has been established to regulate firms that conduct financial services in or from the QFC.

      Paul Koster, Chief Executive of the DFSA said, "The DFSA is keen to engage with its counterparts in the GCC and I am particularly pleased to be signing this MoU with Phillip Thorpe, a distinguished and experienced figure in the world of financial regulation. I am also pleased that we now have a formal arrangement with the QFC Regulatory Authority, with whom we have much in common. Both authorities are integrated regulators of international centres striving to embrace best practice and seeking to reflect the resolutions of the international standard-setters. This initiative should be seen as a mutual willingness to co-operate and share information to those standards."

      "In the past year, the importance of effective co-ordination and co-operation between regulators cannot be overstated. We are looking for better ways of working together to resolve problems and prevent their repetition. Agreements such as this will make a difference", Mr Koster said.

      Phillip Thorpe, Chairman and Chief Executive Officer of QFC Regulatory Authority welcomed the signing of the MoU saying, "As markets and regulatory jurisdictions are brought closer together in today's evermore complex financial environment, it is increasingly important that regulators share information and working practices as a means of bolstering their effectiveness. This is especially important in neighbouring jurisdictions where cross-border activities are, therefore, more likely to occur and where regulators are, therefore, more likely to need to communicate.

      "This move marks an important development for both regulators in light of our clear shared interests. I am delighted that we are able to sign this MoU with the DFSA and I anticipate that a closer relationship will significantly benefit both parties".