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  • 2021 2021

    • 8 December 2021 — DFSA fines Equitativa USD 210,000 for reporting breaches

      Click here to view the PDF.

      DFSA accepts an Enforceable Undertaking from Equitativa to improve valuation practices

      Dubai, UAE, 8 December 2021: The Dubai Financial Services Authority (DFSA) has today published a Decision Notice imposing a penalty of USD 210,000 (AED 771,225) on Equitativa (Dubai) Limited (Equitativa) and accepted an Enforceable Undertaking from Equitativa.

      Equitativa is both the Fund Manager and the Reporting Entity of a NASDAQ listed fund, Emirates REIT (CEIC) PLC (EREIT or the Fund).

      The DFSA found that on two occasions in 2018 Equitativa made misleading statements regarding one of EREIT’s eleven assets, a school in Dubai Investment Park (the School), in breach of Article 56(2) of the Collective Investment Law 2010. Equitativa failed to take reasonable steps to ensure that it or its employees reported relevant information to the Auditor of EREIT in breach of Rule 9.3.5(e) of the Collective Investment Rules (CIR). The DFSA also identified concerns around Equitativa’s fund valuation practices.

      On 28 August 2018 Equitativa published EREIT’s half year financial statements for the period ending on 30 June 2018. At the time of publication, the School was in default of its rental payments and had informed Equitativa that it would no longer be operating the School in September 2018. In response, Equitativa filed a criminal case for dishonored cheques and decided to terminate its lease with the operator. Despite this, Equitativa did not include a provision for some or all of the approximate USD 2 million owed by the School and did not reduce the valuation of the asset to reflect the lack of an operator for the start of the academic year in September 2018. Rather, the School was presented as 100% occupied with a secure tenant with a 28-year lease in place. This meant that EREIT’s financial statements did not comply with relevant requirements under International Financial Reporting Standards (IFRS) and that EREIT’s net profit for the six months to 30 June 2018 was overstated.

      The 2018 half year financial statements were followed by an investor call together with a video message, and press release. The issues surrounding the School and the future of the asset were not disclosed in any of those communications.

      In November 2018, Equitativa did inform the market that the School was no longer operating but gave the misleading impression that a new operator had been secured and would be in place for the following academic year. This did not accurately reflect the actual state of negotiations at the time, and the School remains vacant.

      Equitativa failed to take reasonable steps to ensure that it or its employees reported to EREIT’s auditor all relevant information for the auditor’s review of the half year financial statements, including Equitativa’s plan to terminate the lease with the operator imminently.

      On 30 April 2019, Equitativa published the annual financial statements for EREIT for 2018. In those, Equitativa did include a full provision for the USD 2 million owed by the School and an impairment for the asset.

      Because Equitativa accepted the DFSA’s settlement offer, the fine was reduced by 30 percent. Were it not for the settlement discount, the fine would have been USD 300,000.

      In addition, the DFSA has accepted an Enforceable Undertaking from Equitativa to address concerns around its valuation practices, including:

      • the completeness and timeliness of information provided to the fund valuers;
      • the sufficiency of the records demonstrating compliance with Rule 13.4.22 of the CIR;
      • the appropriateness of assumptions used in the valuer’s reports; and
      • the sufficiency of details disclosed in the valuer’s reports about the information relied on and assumptions made.

      Although no breaches of DFSA administered legislation were identified, Equitativa has agreed to implement measures to address these concerns and will appoint an independent valuation expert to review EREIT’s fund valuation reports for the 2022 period. Equitativa will furthermore appoint a suitably qualified person with valuation expertise to EREIT’s Oversight Committee.

      The DFSA has closed its investigations into Equitativa.

      F. Christopher Calabia, Chief Executive of the DFSA, said: “Investors have the right to expect that information provided by a fund manager about the performance of the fund is accurate, complete, and not misleading and that financial statements published by a Firm fairly reflect the true state of the business. This expectation is particularly important for a publicly traded fund like Emirates REIT.

      Because the DFSA has a firm focus on investor protection, the Enforceable Undertaking has been designed to improve Equitativa’s valuation practices and enhance monitoring of those practices going forward. We expect these measures to strengthen investor confidence in the future.”

      Copies of the Decision Notice and Enforceable Undertaking can be found in the Regulatory Actions section of the DFSA website.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      F. Christopher Calabia was appointed Chief Executive of the DFSA on 1 October 2021. He joins the DFSA with nearly 30 years of experience focusing on supervision and regulation, including serving for over two decades at the Federal Reserve Bank of New York and two years as a member of the independent Secretariat at the Basel Committee on Banking Supervision in Switzerland. As Chief Executive, Chris leads the DFSA’s development as an innovative, future-focused regulator providing world-class financial services regulation in the DIFC. Chris steers the work of the DFSA across four key themes of Delivery, Engagement, Innovation and Sustainability.

    • 18 November 2021 — DFSA launches Task Force on Sustainable Finance in DIFC

      Click here to view the PDF.

      Dubai, UAE, 18 November 2021: The Dubai Financial Services Authority (DFSA) launched the Task Force on Sustainable Finance (TFSF) in the Dubai International Financial Centre (DIFC) yesterday. Comprised of members from 12 DIFC-based entities, the TFSF aims to drive forward discussions regarding sustainable finance in the DIFC with the aim of supporting the consistent application and adoption of global regulatory standards relating to sustainable finance in the DIFC.

      Sustainability forms a key area of regulatory focus for the DFSA. The DFSA is actively involved in numerous sustainability-orientated regulatory groups, including the Network for Greening the Financial System (NGFS), the Sustainable Insurance Forum (SIF) and the UAE Working Group on Sustainable Finance.

      In launching the TFSF in the DIFC, the DFSA aims to harness its own involvement in global forums and the global experience of DIFC firms to bring global best-practice to the development of sustainable finance in the DIFC.

      F. Christopher Calabia, Chief Executive of the DFSA opened the TFSF meeting, remarking that: “The financial services sector has an important role to play in ensuring that we leverage the power of the purse to reduce emissions and funnel capital toward innovations in energy and carbon capture that will help us to flatten the curve of increases in average temperatures.” He emphasised that as a significant global hub for banking, securities, and insurance, the DIFC has a part to play in this work as well – which is why the engagement of industry leaders in discussions with regulators and supervisors is so important

      Representatives from Blackrock, Credit Agricole Corporate and Investment Bank, HSBC Bank Middle East Limited, Lloyd’s of London, Moody's Investors Service Middle East Limited, Natixis, PwC, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, and Zurich Insurance Company Ltd attended the meeting. The initiative is supported by the Dubai International Financial Centre Authority and The General Secretariat of the Executive Council of Dubai.

      The SFTF will next meet in January to discuss the next steps and how the work could be progressed through dedicated workstreams.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      F. Christopher Calabia was appointed Chief Executive of the DFSA on 1 October 2021. He joins the DFSA with nearly 30 years of experience focusing on supervision and regulation, including serving for over two decades at the Federal Reserve Bank of New York and two years as a member of the independent Secretariat at the Basel Committee on Banking Supervision in Switzerland. As Chief Executive, Chris leads the DFSA’s development as an innovative, future-focused regulator providing world-class financial services regulation in the DIFC. Chris steers the work of the DFSA across four key themes of Delivery, Engagement, Innovation and Sustainability.

    • 15 November 2021 — UAE Regulatory Authorities jointly issue Guidelines for Financial Institutions Adopting Enabling Technologies-EN

      Click here to view the PDF.

      United Arab Emirates (15 November 2021 ): The Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC) and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) (the Regulators) have jointly issued “Guidelines for Financial Institutions Adopting Enabling Technologies” (the Guidelines).

      The Guidelines, published today, set out cross-sectoral principles and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services. The enabling technologies include: Application Programming Interfaces; Big Data Analytics and Artificial Intelligence; Biometrics; Cloud Computing; and Distributed Ledger Technology.

      The objectives of these Guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed. The issuance of the final Guidelines follows a public consultation launched in June 2021. In finalising the Guidelines, the Regulators have considered international standards, industry best practices and the valuable feedback received from market participants during the public consultation.

      The Guidelines will apply to all financial institutions that are licensed and supervised by any of the Regulators and that utilise the enabling technologies, irrespective of the financial activities conducted.

      Commenting on the launch of the guidelines, Saif Al Dhaheri, Assistant Governor - Strategy, Financial Infrastructure and Digital Transformation at the CBUAE, said: "Through the guidelines, we aim to direct licensed financial institutions to adopt technologies that enable modern financial services and promote innovation. These guidelines reflect the Central Bank's keenness to team up with regulatory authorities in various fields, including issuing unified and common guidelines to achieve the growth of the UAE’s economic sectors.”

      Dr. Maryam Buti Al Suwaidi, Chief Executive Officer of the Securities and Commodities Authority (SCA), said: “Undoubtedly, the release of Guidelines for Financial Institutions Adopting Enabling Technologies is of paramount importance given that they enhance the safe and proper adoption of these technologies by the financial institutions operating in the UAE’s financial sector, especially that they are consistent with the best global standards and practices. Serving as a guide for all financial institutions that fall under the supervision of SCA or the other regulatory authorities taking part in this initiative, these guidelines will encourage enhanced proactive management of the risks of innovative activities.”

      F. Christopher Calabia, Chief Executive of the DFSA, said: “Finance has long drawn on the latest technology, now more so than ever. As a risk-based regulator, the DFSA welcomes innovation and the prudent adoption of enabling technologies by the firms it supervises. In developing this Joint Guidance with fellow UAE regulators, we encourage all firms to deploy new technology in line with good practice and clear guidelines so that the financial system and customers remain properly protected.”

      Emmanuel Givanakis, CEO of the FSRA at the ADGM, said, “Modern financial institutions need their technology to be robust and resilient. These Guidelines will help financial institutions by providing best practices on how to manage and mitigate risks arising from the use of innovative technologies. In turn, this will let institutions better serve their customers. We have closely collaborated with the other UAE regulators on these Guidelines and look forward to similar joint efforts in future.”

      To view and download the Guidelines, please click on any of the following links:

      - Ends -

    • 14 November 2021 — DFSA to host Cyber Risk Forum

      Click here to view the PDF.

      Dubai, UAE, 14 November 2021: The Dubai Financial Services Authority (DFSA) will be hosting the DFSA Cyber Risk Forum on 16 November 2021. The virtual forum aims to raise awareness about cyber risks and promote cybersecurity maturity amongst companies operating in or from the Dubai International Financial Centre (DIFC). The event is intended for everyone involved in, or responsible for, cyber risk management, including board members, senior management, IT professionals, cyber security experts, and risk and compliance officers.

      This is the second edition of the event, first launched in November 2020, which reinforces the DFSA’s goal to promote the continued development of cyber risk capabilities in the DIFC, in line with the UAE’s National Cybersecurity strategy. The two-and-a-half-hour-long forum will include presentations and panel discussions from industry experts speaking about zero-trust architecture, the rising cyber threat to digital supply chains, the cyber threat landscape, and what financial institutions should be doing to prevent and respond to ransomware attacks.

      Speakers at the forum will include specialists from the DFSA, Mastercard, Standard Chartered, Deloitte, SentinelOne, HelpAG, Citibank, the ADGM Financial Services Regulatory Authority, Kaspersky, Mandiant and Axon Technologies.

      F. Christopher Calabia, Chief Executive of the DFSA, said: “Rapid growth in the digital economy makes cybersecurity a shared priority for every organisation. Events such as the DFSA’s Cyber Risk Forum emphasise the importance of partnership and collaboration across the industry and with supervisors. We encourage everyone in the DIFC involved in this subject to join us to share insight into emerging issues and best practices for mitigating cyber risks.”

      To register for the event please click here.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti‐Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non‐Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      F. Christopher Calabia was appointed Chief Executive of the DFSA on 1 October 2021. He joins the DFSA with nearly 30 years of experience focusing on supervision and regulation, including serving for over two decades at the Federal Reserve Bank of New York and two years as a member of the independent Secretariat at the Basel Committee on Banking Supervision in Switzerland. As Chief Executive, Chris leads the DFSA’s development as an innovative, future-focused regulator providing world-class financial services regulation in the DIFC. Chris steers the work of the DFSA across four key themes of Delivery, Engagement, Innovation and Sustainability.

    • 3 November 2021 — Former Abraaj Managing Partner Mr Mustafa Abdel-Wadood fined USD 1.9 million for involvement in the Abraaj misconduct

      Click here to view the PDF.

      Dubai, UAE, 3 November 2021: The Dubai Financial Services Authority (DFSA) has today published a Decision Notice imposing a penalty of USD 1,927,495 (AED 7,078,725) on Mr Mustafa Abdel-Wadood. The Notice additionally prohibits and restricts Mr Abdel-Wadood from performing any function in connection with the provision of financial services in or from the Dubai International Financial Centre (DIFC).

      Mr Abdel-Wadood was one of the most senior figures at the Abraaj Group for more than a decade, from July 2006 to February 2018, where he held various roles including the roles of Managing Partner, Global Head of Private Equity, and Board Member. From April 2010, Mr Abdel-Wadood was also the Senior Executive Officer (SEO) of Abraaj Capital Limited (ACLD), the DFSA Authorised Firm of the Abraaj Group.

      The DFSA has taken enforcement action against Mr Abdel-Wadood for his involvement in breaches of DIFC legislation by Abraaj Investment Management Limited (AIML), a Cayman entity not authorised by the DFSA. AIML carried out unauthorised Financial Service activities in or from the DIFC and actively misled and deceived investors in Abraaj funds.

      In particular, Mr Abdel-Wadood was involved in the misuse of investor funds, the withholding of sale proceeds and reports from investors, providing false explanations to investors, and the cover of a USD 200 million shortfall in a fund at its financial reporting date.

      Mr Abdel-Wadood has also pleaded guilty to all criminal charges brought by the US Department of Justice. He stated in his guilty plea that he “stood by silently while Abraaj's track record was overstated and its financial health falsely portrayed”.

      Mr Abdel-Wadood was furthermore involved in AIML’s unauthorised financial service activities through his actions in managing the Abraaj funds from the DIFC and his role as a permanent member of the AIML Global Investment Committee.

      As the ACLD SEO, Mr Abdel-Wadood had significant responsibility for ACLD’s activities. However, he failed to take reasonable care to ensure that ACLD complied with legislation applicable in the DIFC. In particular, Mr Abdel-Wadood failed to identify that ACLD’s prudential returns and financial statements, which he signed, contained false and misleading information. He took no steps to stop ACLD resources from being used by AIML to conduct unauthorised activity in or from the DIFC.

      The fine imposed reflects the seriousness of the offences and is based on Mr Abdel-Wadood’s earnings from the Abraaj Group. In setting the fine amount, the DFSA has given due consideration to the significant level of cooperation that Mr Abdel-Wadood has provided and continues to provide to the DFSA and the US authorities and there is no evidence to suggest that Mr Abdel-Wadood received a direct economic benefit as a result of his actions.

      F. Christopher Calabia, Chief Executive of the DFSA, said: “Mr Abdel-Wadood was one of the most senior and influential persons at the Abraaj Group. His position within the Group and his reputation with investors allowed the Abraaj Group to mask its true financial position and the extent of its misuse of investor funds.

      Over the past two years, Mr Abdel-Wadood has been cooperating with the US authorities and the DFSA, which is reflected in the reduction of his fine. The DFSA aims to prevent wrong-doing from taking place, but when instances are discovered, the DFSA expects full, open, and honest cooperation from individuals and will take this into account when setting penalties.

      We continue our actions against other individuals who were involved in Abraaj’s misconduct, and we will make any further public announcements at the appropriate time.”

      A copy of the DFSA's Decision Notices can be found in the Regulatory Actions section of the DFSA website.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      F. Christopher Calabia was appointed Chief Executive of the DFSA on 1 October 2021. He joins the DFSA with nearly 30 years of experience focusing on supervision and regulation, including serving for over two decades at the Federal Reserve Bank of New York and two years as a member of the independent Secretariat at the Basel Committee on Banking Supervision in Switzerland. As Chief Executive, Chris leads the DFSA’s development as an innovative, future-focused regulator providing world-class financial services regulation in the DIFC. Chris steers the work of the DFSA across four key themes of Delivery, Engagement, Innovation and Sustainability.

    • 1 November 2021 — DFSA decision to impose sanctions on former La Tresorerie SEO, Gilles Rollet, referred to Financial Markets Tribunal

      Click here to view the PDF.

      Dubai, UAE, 1 November 2021: The Dubai Financial Services Authority (DFSA) has today published a Decision Notice concerning action the DFSA decided to take against Mr Gilles Rollet, the former Senior Executive Director and a Licensed Director of La Tresorerie Limited, a DFSA Authorised Firm.

      Mr Rollet disputes the DFSA’s findings and has referred the Decision Notice to the Financial Markets Tribunal (FMT) where the parties will present their respective cases. The DFSA’s decision is therefore provisional and reflects the DFSA’s belief as to what occurred and how it considers Mr Rollet’s conduct should be characterised.

      The DFSA imposed on Mr Rollet a fine of USD 175,000, prohibited him from holding office in or being an employee of a regulated DIFC entity, and restricted him from performing any functions in connection with the provision of Financial Services in or from the Dubai International Financial Centre (DIFC).

      The FMT will determine what, if any, is the appropriate action for the DFSA to take, and will remit the matter to the DFSA with such directions as the FMT considers appropriate to give effect to its determination. The DFSA’s decision may be confirmed, varied or overturned as a result of the FMT’s review.

      The DFSA took action against Mr Rollet due to, in the DFSA’s view, multiple breaches of DFSA legislation arising from his knowing involvement in La Tresorerie unlawfully providing physical cash to its clients in breach of DFSA Rules (Unlawful Cash Service). The DFSA has previously taken action against La Tresorerie for its wrongdoing.

      The Unlawful Cash Service operated between February 2015 and January 2017 and involved, in the DFSA’s view:

      • the use of false invoices and transferring client money to unregulated companies outside the DIFC; and
      • the occasional transportation of physical cash from the UAE to a foreign country.

      It is the DFSA’s view that Mr Rollet was knowingly involved in the Unlawful Cash Service because he authorised the service and facilitated it, at times through the use of his own bank account, and was directly involved in delivering cash to the firm’s clients. The DFSA found that as the SEO, he was also ultimately accountable for the firm’s activities.

      Mr Rollet denies all of the DFSA’s allegations with regard to his knowing concern in the Unlawful Cash Service.

      Further, in a voluntary interview with the DFSA in 2019, Mr Rollet provided information about his involvement in the Unlawful Cash Service that appears to be false, misleading and deceptive.

      Mr Rollet also denies the DFSA’s allegations as regards providing false, misleading or deceptive information to the DFSA.

      The detailed reasons for the DFSA’s action against Mr Rollet are set out in the DFSA’s Decision Notice dated 29 December 2020 which can be found in the Regulatory Actions section of the DFSA website.

      The DFSA does not intend to make any further public comment until the FMT’s review is complete, except as necessary to correct any inaccuracies. Information about pending FMT matters, including details of any public hearings, can be found on the FMT section of the DFSA website:

      https://www.dfsa.ae/en/About-Us/Our-Structure#Financial-Market-Tribunal

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

    • 20 October 2021 — Dubai Financial Services Authority, UAE Accountants & Auditors Association and the International Ethics Standards Board for Accountants Hosts Middle East Webinar on Non-Assurance Services and Fee-Related Revisions to the IESBA Code

      Click here to view the PDF.

      Dubai, UAE, 20 October 2021: The Dubai Financial Services Authority (DFSA), along with the UAE Accountants & Auditors Association (AAA) and the International Ethics Standards Board for Accountants (IESBA) hosted a Middle East webinar on non-assurance services (NAS) and fee-related revisions to the IESBA Code.

      “The recently released NAS and fee-related revisions to the IESBA Code represent a major advance in the public interest by establishing an even higher bar for standards of independence required of auditors globally, especially in relation to audits of public interest entities,” said Dr. Stavros Thomadakis, Chairman of the IESBA. “I applaud the DFSA, the AAA, and their leadership for hosting an important and timely webinar on these critically important final pronouncements.”

      In his welcome address, F. Christopher Calabia, Chief Executive of the DFSA, highlighted the growth of the Dubai International Financial Centre (DIFC) amid challenging times and the importance of ethics. “Maintaining the highest ethical standards is a core value of the DFSA and is fundamental to ensure the integrity of financial and ancillary services in or from the DIFC. Auditors play an integral role and these revisions to the IESBA Code will strengthen independence requirements for auditors.”

      IESBA Deputy Chair Caroline Lee and Technical Advisor David G. Clark presented revisions to the NAS and fee-related provisions of the IESBA Code which significantly strengthen the guardrails around auditor independence.
      “I am very pleased that AAA has partnered with the IESBA and DFSA to bring this important webinar to the UAE and the Middle East. NAS and fee-related provisions are significant amendments to the IESBA Code which all professional accountants must comply with. AAA will continue to play its vital role as the UAE’s national accountancy body,” said His Excellency Riyad Al Mubarak, Honorary President of AAA.

      More than 200 professional accountants from 28 countries attended the event. Considering the safety and wellbeing of all participants, this event was hosted virtually.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, money services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies in the DIFC. Please refer to the DFSA's website at: http://www.dfsa.ae for more information.

      F. Christopher Calabia was appointed Chief Executive of the DFSA on 1 October 2021. He joins the DFSA with nearly 30 years of experience focusing on supervision and regulation, including serving for over two decades at the Federal Reserve Bank of New York and two years as a member of the independent Secretariat at the Basel Committee on Banking Supervision in Switzerland. As Chief Executive, Chris leads the DFSA’s development as an innovative, future-focused regulator providing world-class financial services regulation in the DIFC. Chris steers the work of the DFSA across four key themes of Delivery, Engagement, Innovation and Sustainability.

      The International Ethics Standards Board for Accountants (IESBA) is an independent standard-setting board that develops, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide, including auditor independence requirements. This includes the International Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The board also supports adoption and implementation, promotes good ethical practices globally, and fosters international debate on ethical issues faced by accountants.

      The UAE Accountants & Auditors Association (AAA) is a not-for-profit organisation and has undertaken key strategic initiatives to develop the Accounting and Finance profession in the United Arab Emirates. The Association was established in 1997 through a Federal mandate with the key objective of building national capacity of the accountancy and finance profession in line with the best available global practices and standards.

    • 4 October 2021 — Dubai Financial Services Authority provides the right regulatory framework for the future of finance

      Click here to view the PDF.

      Dubai, UAE, 4 October 2021: The Dubai Financial Services Authority (DFSA), the independent financial regulator of the Dubai International Financial Centre (DIFC), continues to enhance its regulatory framework by focusing on the future of finance. As finance across the world transforms through the use of technology, the role of regulation has never been more important.

      Innovation is a key pillar of the UAE’s economic growth and it recently ranked 1st regionally in the 2020 Global Innovation Index, cementing its overall status as one of the world’s most innovative countries and further attracting businesses with innovation at the centre of their operations to choose the UAE. Similarly, the future of finance is at the heart of the development of the DIFC, the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region.

      The DIFC is now the home of more than 3,200 companies and nearly 28,000 staff. Within this wider population, the DFSA regulates 521 financial services firms and registers 17 auditors and 108 designated non-financial businesses. The total assets of the financial services firms are approaching USD 200 billion. The pipeline of firms wishing to be regulated by the DFSA continues to grow.

      Fadel Al Ali, Chairman of the DFSA, said: “As the independent financial regulator of the DIFC, we continue to work towards fostering and maintaining fairness, transparency and efficiency in the financial services industry. We are exploring and adopting innovative solutions to enhance our regulatory role, as part of our digitalisation drive. We continue to ensure that we are aligned with the highest global standards based on the best practices and laws of the world’s leading financial jurisdictions.

      To encourage innovation in the DIFC and protect the market against risks, the DFSA set up the Innovation Testing Licence (ITL) Programme. This year, 26 companies expressed interest in the programme and 17 of these were asked to submit an application; these are now being reviewed. Applicants include firms wanting to provide payment and money transmission services, wealth management, tokenised payment services, and biometric-enabled financial services.

      The DFSA hosts RegTech events focusing on driving compliance through innovation. The most recent event highlighted the importance of this area and saw demonstrations from seven RegTech providers in the area of cyber risk mitigation, data analysis, transaction monitoring, and eKYC. Cyber risk continues to be a concern for businesses across every sector, particularly the financial services industry that is often targeted. To foster a safe environment for firms operating within the DIFC, the DFSA launched the Cyber Threat Intelligence Platform (TIP) last year, the first regulator-led platform of its kind in the region, creating an information sharing system for firms in the DIFC. The TIP has over 175 registered members and continues to provide them with information about an average of over 100 new threats per week. Members of TIP also contribute to the platform, sharing their knowledge and expertise. This has been beneficial for the DFSA in terms of strengthening relationships with partners to collaborate on tackling a common threat.

      Expo 2020 will welcome millions of visitors, boosting Dubai’s economy and affirming Dubai’s place as the regional hub for international businesses. The Sustainability, Opportunity and Mobility districts at the Expo reflect that the UAE is working to diversify its economy through non-oil sectors, as part of its commitment to the UN’s Sustainable Development Goals. Adopting Environmental, Social and Governance (ESG) standards is essential to growth, as investors globally are now seeking to invest in firms and in countries that are transparent with their environmental, social and governance practices. The DFSA has been involved in the work surrounding ESG matters, both in the UAE and in the international arena, for over three years. Working closely with stakeholders and taking their feedback into consideration, the DFSA is committed to working towards ensuring that ESG education is a top priority within financial services.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti‐Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non‐Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Fadel Abdulbaqi Al Ali was appointed Chairman of the DFSA’s Board in June 2021, having been Deputy Chair from July 2020 to May 2021 and a Board member since 2011. Mr Al Ali is Deputy Group CEO and Chief Operating Officer at First Abu Dhabi Bank, who he joined in 2017. He was previously CEO of Dubai Holdings, a global group with assets of USD 35 billion across 21 countries and interest in 14 economic sectors, who he joined in 2004 after several successful years at Citibank. Other current roles include Chairman of Shuaa Capital PSC, and Board memberships at FAB (Suisse) Private Bank SA and Abu Dhabi Development Holding.

    • 10 August 2021 — Dubai Financial Services Regulator Appoints F. Christopher Calabia as New Chief Executive

      Click here to view the PDF.

      Dubai, UAE, 10 August 2021: The Board of Directors (Board) of the Dubai Financial Services Authority (DFSA) has announced the appointment of F. Christopher Calabia as the new Chief Executive of the DFSA. Chris will succeed Bryan Stirewalt with effect from 1 October 2021.

      Chris is an accomplished leader in financial regulation with a career that spans 30 years in various public and not-for-profit sector roles. As an expert in banking supervision, Chris was previously responsible for improving supervisory effectiveness at the Federal Reserve Bank of New York, where he held a variety of specialised policy and supervision roles. He joins the DFSA from a Senior Advisory position at the Bill & Melinda Gates Foundation, leading its work to promote regulations that enable digital financial inclusion. In that capacity, he has advocated for policy, technology and data innovations to support supervisors and strengthen the safety, soundness, and integrity of financial systems in developing countries around the world.

      Fadel Al Ali, Chairman of the DFSA, commented: “The DFSA plays a crucial role as the independent financial regulator of the DIFC. As we stand at the cusp of great economic change, we are looking to further build on regulatory best practices and encourage the development of innovative new solutions for markets and investors. Chris’s experience, driving innovation in complex environments while maintaining the stability and integrity of financial systems, will further strengthen the DIFC’s standing as a global financial hub. The Board of Directors and I look forward to working with Chris as he builds on the best practices set in place and enhances regulatory capacity at a time of rapid transformation in markets and technology.”

      He added: “During his tenure, Bryan has played an instrumental role in maintaining the DFSA’s reputation as a leading global regulator and has been a valued and respected leader at the DFSA, particularly through a challenging period. Bryan has also been an exemplary ambassador for the DFSA on a global stage through his participation in the work of international standard-setting bodies. On behalf of the Board, I wish to convey our greatest appreciation to Bryan for his many achievements and contributions.”

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

    • 14 July 2021 — Former Abraaj CFO, Mr Ashish Dave, fined USD 1.7 million for his involvement in deception, unauthorised activity, and compliance breaches

      Click here to view the PDF.

      Dubai, UAE, 14 July 2021: The Dubai Financial Services Authority (DFSA) has today published a Decision Notice against Mr Ashish Bhrugu Dave (Mr Dave), a former Chief Financial Officer (CFO) of the Abraaj Group, imposing a penalty of USD 1,700,000 (AED 6,243,250). The Notice also prohibits and restricts Mr Dave from performing any function in connection with the provision of financial services in or from the DIFC.

      Mr Dave was the Abraaj Group CFO from September 2008 to September 2013 and then again from February 2017 to March 2018. During both periods, Mr Dave was authorised by the DFSA to perform licensed functions as the Finance Officer and Licensed Director of Abraaj Capital Limited (ACLD), a DFSA Authorised Firm.

      On 8 June 2021, the DFSA decided to take enforcement action against Mr Dave for being knowingly involved in breaches of DIFC legislation and the DFSA’s Rules by Abraaj Investment Management Limited (AIML), a Cayman entity not authorised by the DFSA, and ACLD. In particular:

      • AIML, carried out unauthorised financial services in and from the DIFC and actively misled and deceived investors in Abraaj funds; and
      • ACLD, failed to maintain adequate capital resources, deceived the DFSA about its compliance with various legislation and rules, and was knowingly concerned in AIML's unauthorised financial services activities.

      Mr Dave was knowingly involved in AIML misleading and deceiving investors over the use of monies in Abraaj funds. In particular, Mr Dave was aware that approximately USD 200 million was taken from the Abraaj Growth Markets Healthcare Fund (AGHF) and used for the Abraaj Group’s working capital or other investment commitments. Mr Dave then proposed, orchestrated, and executed actions to deceive auditors and investors as to the actual cash balance in AGHF’s bank accounts by temporarily borrowing monies for the purpose of producing misleading bank balance confirmations and misleading financial statements.

      Mr Dave was also knowingly involved in AIML carrying out unauthorised activity through his actions in the Abraaj investment cycle from signing Investment Management Agreements to distributing proceeds to investors. As early as 2009, Mr Dave failed properly to address concerns raised with him about AIML engaging in unauthorised activities in and from the DIFC.

      Mr Dave was knowingly involved in ACLD contraventions by authorising temporary cash transfers at certain reporting period end dates and signing management representation letters to report falsely that ACLD was in compliance with its Capital Resources requirements. As ACLD’s Finance Officer, Mr Dave was directly responsible for ACLD’s compliance with the DFSA’s capital Rules.

      The fine imposed reflects the seriousness of the offences and is based on Mr Dave’s earnings from the Abraaj Group.

      Peter Smith, acting Chief Executive of the DFSA, said: "It is central to our regulatory objectives to hold to account those who are at the centre of wrong-doing by Firms. The wrong-doing by AIML and ACLD was of the highest order of seriousness. As the Group CFO, Mr Dave was in a unique position with visibility over the financial affairs of the group. He had the opportunity to expose and bring to a halt AIML and ACLD’s breaches. Instead, Mr Dave became actively involved in the deception of Abraaj stakeholders. Our actions against other former senior Abraaj staff members are on-going and in the final stages of the disciplinary process.”

      A copy of the DFSA's Decision Notices can be found in the Regulatory Actions section of the DFSA website.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Peter Smith, Managing Director, Head of Strategy, Policy and Risk, joined the DFSA in June 2012. He is responsible for the DFSA’s strategic planning, its annual business planning cycle and engagement with external bodies on strategic issues; the further development and maintenance of the DFSA’s policy framework; and the organisation’s risk framework, including the risk-based approach to regulation.

      Peter is President of the Chartered Institute for Securities and Investment’s UAE National Advisory Committee, and a member of the Emirates Securities and Commodities Authority’s Capital Markets Advisory Council. Internationally, Peter is a member of the International Association of Insurance Supervisors’ Policy Development Committee. He is a member of the steering body of the Global Financial Innovation Network (GFIN), which brings together like-minded regulators to work on innovation in financial services.

    • 29 June 2021 — DFSA Opens Innovation Testing Licence Cohort

      Click here to view the PDF.

      Dubai, UAE, 29 June 2021: The Dubai Financial Services Authority (DFSA) invites local and international firms to apply to join the next cohort for its Innovation Testing Licence (ITL) Programme. The cohort will be open to applicants from 1st to 31st July. Successful cohort applicants will be invited to apply to enter the DFSA’s Innovation Testing Licence (ITL) Programme.

      Launched in 2017, the ITL is a licensed regulatory sandbox which enables approved firms to test new and innovative financial products, services, and business models in and from the Dubai International Financial Centre (DIFC) within a restricted regulatory environment. Firms must provide a clear explanation of their planned business model and the proposed innovative product or service.

      Bryan Stirewalt, Chief Executive of the DFSA said: “Innovation brings a promise of increased competition, financial inclusion, improved consumer choice, and new products and services which are more efficient or beneficial. As the need for these solutions increases, so does the need for trusted solution providers. The ITL Programme enables a direct testing environment for these innovative products, services and business models, pursuant to a testing plan. Operating within the framework of a sandbox can reduce regulatory uncertainties and provide clarification on regulatory and supervisory expectations. We look forward to receiving a fresh batch of applications for technology driven companies with unique solutions.”

      The programme reflects the DFSA’s continued commitment to new and emerging technologies in the DIFC. Since the May 2017 launch of the ITL, a total of 105 companies have applied to enter the programme and 51 applicants have been accepted into the programme. At present, 5 firms are operating in the ITL, 3 firms have successfully completed and exited the programme, and 7 firms have an In-Principal approval.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October 2018, after nearly eight years as the DFSA's Managing Director of Supervision. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.

    • 23 June 2021 — DFSA Imposes Restrictions on FFA Private Bank (Dubai) Limited

      Click here to view the PDF.

      23 June 2021: The Dubai Financial Services Authority (DFSA) announced that it has imposed restrictions on FFA Private Bank (Dubai) Limited (FFA) prohibiting it from receiving, arranging or executing orders from or on behalf of specific clients.

      The DFSA imposed the restrictions by way of a prohibition due to concerns about the adequacy of its systems and controls to identify, assess and report trading giving rise to suspicions of market abuse relating to certain clients. The prohibition will remain in place until FFA is able to demonstrate that it has addressed these weaknesses. FFA is cooperating with the DFSA to resolve the issues.

      Bryan Stirewalt, Chief Executive of the DFSA, commented: “The DFSA will take strong action to protect the integrity of financial markets. We will not hesitate to restrict the activities of firms where there are concerns over the adequacy of their processes to prevent or detect market abuse. The DFSA is committed to protecting the interests of users of financial markets.”

      The DFSA’s public register has been updated to reflect the license restrictions, by noting the word restriction against FFA’s licence entry, and a decision notice has been issued on its website.

      A copy of the DFSA's Decision Notice can be found in the Regulatory Actions section of the DFSA website.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October 2018, after nearly eight years as the DFSA's Managing Director of Supervision. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.

    • 1 June 2021 — UAE Regulatory Authorities Launch Consultation on the ‘Guidelines for Financial Institutions Adopting Enabling Technologies’

      Click here to view the PDF.

      Abu Dhabi ( June 1, 2021): The Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC), and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) have jointly launched a four-week public consultation on proposed “Guidelines for Financial Institutions Adopting Enabling Technologies”.

      The consultation launched today sets out principles for cross-sectoral such as banking, insurance, asset management and securities, and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services. The enabling technologies include Application Programming Interfaces, Big Data Analytics and Artificial Intelligence, Biometrics, Cloud Computing, and Distributed Ledger Technology.

      The objectives of these Guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed. In drawing up the Guidelines, the Regulators have considered both international standards and industry best practices.

      The Guidelines will apply to all financial institutions that are licensed and supervised by any of the Regulators and who utilise the enabling technologies, irrespective of the financial activities conducted.

      The Regulators welcome comments on the Guidelines which is planned to be issued in the second half of 2021, subject to the outcome of the public consultation.

      To view and download the Guidelines, please click on the following link: https://centralbank.ae/en/fintech-office

      Comments can be sent to consultation-etechnology@cbuae.gov.ae no later than 30 Jun 2021.

      - Ends -

    • 29 March 2021 — Dubai Financial Services Authority Consults on Regulation of Security Tokens

      Click here to view the PDF.

      Dubai, UAE, 29 March 2021: The Dubai Financial Services Authority (DFSA) today published its “Framework for Regulating Security Tokens” for public consultation for a period of 30 days.

      The DFSA is proposing a comprehensive and innovative regulatory framework for regulating Security Tokens, a new and growing area of interest for many industry participants. We are actively engaged with key stakeholders in Dubai and around the world on the future of finance and the rapidly growing area of financial technology, including various Distributed Ledger Technology (DLT) applications.

      Security Tokens create rights and obligations that are the same as, or are substantially similar to conventional investment instruments. We use the term Security Tokens as this is a commonly used term in the industry, but the framework goes beyond typical securities to cover derivatives as well. This enables the use of DLT and similar technologies across the full spectrum of investments in a consistent manner.

      We propose updating our regulatory regime to facilitate DLT-based activities of:

      • the offer of Security Tokens to the public, and the admission to trading of Security Tokens on trading facilities;

      • the trading of Security Tokens; and

      • the provision of other financial services relating to Security Tokens, such as providing custody relating to Digital Wallets holding Security Tokens, and advising and arranging.

      Some of the key changes proposed are:

      • allowing facilities that trade Security Tokens to have direct access members, including retail clients;

      • enhanced systems and controls requirements to address risks associated with the use of DLT or similar technology;

      • enhanced disclosure in prospectuses; and

      • enhanced requirements for those providing custody of Digital Wallets.

      Allowing direct access is a significant shift from the current intermediated model of trading in markets. Our proposals include appropriate safeguards to tackle investor protection needs and misconduct risks, whilst also addressing market integrity, financial stability and, crucially, money laundering and terrorism financing threats in the direct access environment.

      We will soon issue proposals for other types of tokens that are not Security Tokens, such as exchange tokens and utility tokens, later in 2021.

      Bryan Stirewalt, the Chief Executive of the DFSA, said: “The proposal for regulation of Security Tokens is a key milestone in paving a clear and certain path for those issuers who wish to raise capital in or from the DIFC using DLT and similar technology, and for those firms who intend to be involved in this market, by conducting or providing financial services.

      Our proposals promote and facilitate innovation, while also protecting consumers, addressing market integrity and mitigating ML/FT and other risks. We have drawn on the experience of other regulators who have taken cautious steps in this rapidly developing area, while addressing DIFC specific needs. We look forward to receiving public comments on these proposals.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October 2018, after nearly eight years as the DFSA's Managing Director of Supervision. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.

    • 3 March 2021 — Dubai Financial Services Authority (DFSA), UAE Banks Federation (UBF), and ICAEW Host a Special Briefing on IFRS-9

      Click here to view the PDF.

      Dubai, UAE, 03 March 2021: The Dubai Financial Services Authority (DFSA), along with UAE Banks Federation (UBF) and the Institute of Chartered Accountants in England & Wales (ICAEW) hosted a special briefing earlier today where a distinguished panel explored the impact of COVID-19 on reporting and auditing for Expected Credit Losses (ECL) under IFRS-9. The special briefing included an exclusive interview with His Excellency Riyad Al-Mubarak, Honorary President, UAE Accountants & Auditors Association (AAA), in which His Excellency shared his experience and highlighted a financial reporting guide issued by the AAA.

      Mr Jamal Saleh, Director General of UBF, welcomed the participants to this special briefing and explained the purpose of the session. “It is very difficult to predict when this COVID-19 induced economic crisis will end. However, providing clarity in the midst of uncertainty is not only necessary but also valued. Moreover, changes in economic conditions should be reflected in the macroeconomic scenarios that are applied by entities and in their weightings. UBF is always keen to be part of similar webinars, which we hope will provide practical solutions for our member banks and finance companies in managing the impact of current economic uncertainty, due to COVID-19 pandemic, on the calculation of ECL, while always remaining compliant with IFRS-9 and promoting consistency in the overall approach,” Mr Saleh said.

      In his opening address, Mr Bryan Stirewalt, Chief Executive of the DFSA, highlighted the financial reporting challenges arising due to COVID-19 pandemic. “IFRS-9 has been put to the test during this pandemic as a replacement of its predecessor IAS-39. The COVID-19 crisis and related economic uncertainty present unique and ongoing challenges for auditors. Making fair and timely assessments in today’s unusual and fast-changing environment has become extremely challenging. Auditors will need to obtain evidence of a different nature or form than previously obtained, which may affect how and on what basis they consider the relevance and reliability of that evidence. In light of the economic impacts of COVID-19, new risks may emerge. Professional scepticism has never been more important and will play a key role when it comes to these challenging areas,” Mr Stirewalt said.

      Distinguished panellists covered financial reporting, auditing and regulatory perspectives. Panellists included Alexis D'Almedia from Central Bank of the UAE, Asim Rasheed from EmiratesNBD, and Alexis Agathocleous from Deloitte Middle East. The panel discussion was moderated by Philippa Kelly, ICAEW Director, who is based in the UK.

      More than 400 professionals including audit partners of DFSA Registered Auditors, ICAEW members, and members of UBF, attended the event. Considering the safety and wellbeing of all participants, this event was hosted virtually.

      Michael Armstrong FCA, ICAEW Regional Director, Middle East, Africa and South Asia, while closing the event said: “We were proud to co-host this briefing with the DFSA and UAE Banks Federation to help bring much needed guidance on the complex judgements necessary to apply IFRS 9 in the current circumstances. Quantifying ECL and credit risk in accordance with IFRS 9 is extremely challenging for financial institutions in the best of times, and has been made all the more complex by the coronavirus-related economic crisis.

      “The implications for financial statements not only include the measurement of assets and liabilities but also disclosure. As new information emerges constantly, the cut-off for inclusion of information in a reporting cycle becomes increasingly challenging. Chartered accountants have a major role to play – not just in helping steer businesses through these times but sharing our expertise with governments.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October, 2018, after nearly eight years as the DFSA's Managing Director of the Supervision Division. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He now serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.ICAEW: There are more than 1.8m chartered accountants and students around the world and 186,500 of them are members and students of ICAEW. They are talented, ethical and committed professionals, which is why all of the top 100 Global Brands employ chartered accountants.

      ICAEW promotes inclusivity, diversity and fairness. We attract talented individuals into the profession and give them the skills and values they need to build resilient businesses, economies and societies, while ensuring our planet’s resources are managed sustainably.

      Founded in 1880, we have a long history of serving the public interest and we continue to work with governments, regulators and business leaders around the world. And, as an improvement regulator, we supervise and monitor over 12,000 firms, holding them, and all ICAEW members and students, to the highest standards of professional competency and conduct.

      ICAEW is proud to be part of Chartered Accountants Worldwide, a global network of 750,000 members across 190 countries, which promotes the expertise and skills of chartered accountants on a global basis.

      We believe that chartered accountancy can be a force for positive change. By sharing our insight, expertise and understanding we can help to create strong economies and a sustainable future for all.

      UAE Banks Federation: Established in 1982, UAE Banks Federation (UBF) is a professional representative body of the member banks operating in the UAE. It advocates banks’ interests and enhances cooperation and coordination among them so as to upgrade the banking industry for the benefit of the banking sector and national economy.

      UBF is managed by a nine-member Board of Directors elected every three years. The Board of Directors is responsible for planning, policy-making and supervision of UBF’s activity. The Board of Directors is chaired by H.E. Abdul Aziz Abdullah Al Ghurair, CEO of Mashreq Bank. The Advisory Council of Chief Executive Officers/General Managers, is consisted of the CEOs of the national banks in addition to the largest foreign and GCC Banks, oversees policy implementation, follows up on UBF’s activities and takes the necessary decisions to the banking sector.

      The 23 technical committees and 3 advisory committees are specialized in all banking domains. They prepare studies on all topics related to the banking industry, which are then referred, by the General Secretariat, to the Council for approval. Members of UBF has reached 51 Banks by 2020.

    • 8 February 2021 — DFSA Fines Ashish Bhandari USD 165,000 for Involvement in Anti-Money Laundering Breaches and Obstructing the DFSA

      Click here to view the PDF.

      Dubai, UAE, 8 February 2021: The Dubai Financial Services Authority (DFSA) has today published a Decision Notice against Mr Ashish Bhandari, a former relationship manager at a DFSA Authorised Firm.

      On 17 September 2020, the DFSA decided to take enforcement action against Mr Bhandari for being knowingly involved in breaches of Anti-Money Laundering (AML) legislation from 2011 to 2013 and for obstructing the DFSA in 2017 and 2018. The DFSA did not make a finding that Mr Bhandari had engaged in money laundering. The DFSA has fined Mr Bhandari USD 165,000 and restricted him from performing any function in connection with the provision of financial services in or from the DIFC.

      Mr Bhandari referred the matter to the Financial Markets Tribunal on 18 October 2020. As a result of a settlement agreement reached with the DFSA, he has since withdrawn that referral.

      The DFSA found that Mr Bhandari, who was a relationship manager with a private bank in the DIFC, was the director and registered beneficial owner of an off-shore entity registered in the British Virgin Islands (BVI), which had been set up with an introducer of his employer. Mr Bhandari arranged for the introducer's referral fees to be paid by his employer to the BVI entity without disclosing his involvement in the entity to his employer. Mr Bhandari was also instructed by certain of his clients to transfer money to the BVI entity. However, Mr Bhandari’s employer thought the BVI entity was owned and controlled by the introducer. From the money transferred into the BVI entity, large sums were then transferred to Mr Bhandari’s personal bank accounts outside the UAE. The DFSA found that, by not disclosing his outside activities and involvement in the BVI entity, he was able to maintain the fund routing arrangements and thereby retain clients.

      Mr Bhandari’s employer failed to take proper steps to verify the identity and ownership of the BVI entity in accordance with its AML obligations, instead simply accepting Mr Bhandari’s assertions, which he must have known were inaccurate. The DFSA found that Mr Bhandari was knowingly concerned in breaches of AML legislation by concealing relevant information within his knowledge from the Authorised Firm and its compliance function.

      Further, Mr Bhandari failed without reasonable excuse to comply with the DFSA’s requests to provide information and provided false, misleading or deceptive information to the DFSA, or concealed information from the DFSA, with the intention of obstructing the DFSA’s investigation.

      The DFSA would like to acknowledge the cooperation and assistance provided by the Mauritius Financial Services Commission and the British Virgin Islands Financial Services Commission.

      Bryan Stirewalt, Chief Executive of the DFSA, said: "Employees at authorised firms have a duty to act with integrity and professionalism, even more important for those employees who are responsible for dealing directly with clients and investors. When called to give an account of their knowledge and actions, the DFSA expects complete honesty and transparency. Anything short of that will result in significant penalties and restrictions. The fine is higher than it would have been as the DFSA has previously imposed sanctions for highly similar misconduct. We expect standards to improve and we will hold to account those who fail to learn."

      The DFSA decided to take action against Mr Bhandari in order to maintain the integrity and reputation of the DIFC, and to protect direct and indirect users of the financial services industry in the DIFC. The DFSA acknowledges the cooperation and assistance provided by the Mauritius Financial Services Commission and the BVI Financial Services Commission to the DFSA’s investigation.

      A copy of the DFSA’s Decision Notice can be found on the DFSA website under Regulatory Actions. https://www.dfsa.ae/en/What-We-Do/Enforcement#Regulatory-Actions

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October 2018, after nearly eight years as the DFSA's Managing Director of Supervision. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.

    • 1 February 2021 — DFSA Suspends Licence of Red Spear Capital (DIFC) Limited

      Click here to view the PDF.

      Dubai, UAE, 1 February 2021:

      The Dubai Financial Services Authority (DFSA) announced that it has suspended the licence of Red Spear Capital (DIFC) Limited (Red Spear) for a period of 12 months, consistent with its aim of protecting direct and indirect users of the financial services industry in the DIFC.

      Red Spear’s licence was suspended due to serious concerns about the adequacy of its financial resources, its non-compliance with the DFSA rulebook requirements and not maintaining an open relationship with the DFSA.

      The DFSA is committed to protecting the reputation and integrity of the DIFC’s financial services and will take action to ensure the interests of direct, indirect, and prospective users of financial services in the DIFC are protected. The DFSA regularly reminds firms of their requirement to maintain adequate financial resources at all times, and of the importance of dealing with the DFSA in an open and cooperative manner.

      - Ends -

      For further information please contact:
      Corporate Communications
      Dubai Financial Services Authority
      Level 13, The Gate, West Wing
      Dubai, UAE
      Tel: +971 (0)4 362 1613
      Email: DFSAcorpcomms@dfsa.ae
      www.dfsa.ae

      Editor’s notes:

      The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA's website for more information.

      Bryan Stirewalt was appointed Chief Executive of the DFSA on 1 October 2018, after nearly eight years as the DFSA's Managing Director of Supervision. In his role as Chief Executive, Bryan steers the work of the DFSA, further developing its capability as a robust regulator delivering world-class financial services regulation in the DIFC. Bryan plays a vital part in executing the DFSA's regulatory mandate and developing its risk-based supervision framework. Bryan also plays an active role in supporting the work of international standard-setting bodies. He serves as the Co-Chair of the Basel Consultative Group (BCG), which provides a forum for deepening the Basel Committee on Banking Supervision's engagement with non-member, global supervisors on banking supervisory issues. Through this role, Bryan also serves as an Observer at the Basel Committee on Banking Supervision.