5. Statutory Gateways for Disclosure

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5. Statutory Gateways for Disclosure

5.1 The Regulatory Law provides gateways by which the DFSA is permitted to disclose regulatory information for certain purposes and/or to certain persons. The relevant gateways are in Articles 38 and 39.

Article 38 of the Regulatory Law

5.2 Article 38 of the Regulatory Law governs use and disclosure of confidential information by the DFSA. Under Article 38(3), the DFSA may lawfully disclose confidential information where:

(a) the information is already public;

(b) the disclosure is for the purpose of assisting the following persons in the performance of their regulatory functions:

(i) the DIFC Companies Registrar;

(ii) a Financial Services Regulator;

(iii) a governmental or regulatory authority in the UAE or elsewhere exercising powers and performing functions relating to anti-money laundering;

(iv) a self-regulatory body or organisation exercising and performing powers and functions in relation to financial services;

(v) a civil or criminal law enforcement agency, in the UAE or elsewhere;

(c) disclosure is permitted or required under the Regulatory Law or Rules, other DFSA administered laws or any other law applicable in the DIFC; or

(d) disclosure is made in good faith for purposes of performance and exercise of the functions and powers of the DFSA.

Article 39 of the Regulatory Law

5.3 In addition, Article 39 of the Regulatory Law gives the DFSA specific statutory authority to exercise its powers at the request, and on behalf, of the regulators, authorities, bodies or agencies listed in Article 39. This means that the DFSA may obtain confidential information from DIFC reporting entities, listed companies, regulated firms and individuals, and their clients on behalf of other authorities. Therefore the provisions of Article 38 and 39 must often be considered together to determine the limitations on obtaining and sharing confidential information.

5.4 Under Article 39, the DFSA may only exercise its powers on behalf of other authorities if the request for assistance comes from:

(a) the DIFC Companies Registrar;

(b) a Financial Services Regulator;

(c) a governmental or regulatory authority in the UAE or elsewhere exercising powers and performing functions relating to anti-money laundering;

(d) a self-regulatory body or organisation exercising and performing powers and functions in relation to financial services; or

(e) a civil or criminal law enforcement agency, in the UAE or elsewhere.

5.5 You will notice that an identical range of regulators, authorities, bodies or agencies are listed in Article 38(3)(b) and Article 39. For the purpose of this paper we will refer to these authorities as “Article 38/39 Authorities”.

Restrictions on disclosure by the DFSA

5.6 Under Article 80(7) of the Regulatory Law, the DFSA is prohibited from disclosing an individual's compelled testimony to any law enforcement agency for the purpose of criminal proceedings against the person unless the person consents to the disclosure or the DFSA is required by law or court order to disclose the statement.

5.7 Additionally, when the DFSA is requested to disclose confidential information to an Article 38/39 Authority, in circumstances other than those referred to in Article 80(7), the DFSA recognises that the information to be provided is to be used for the sole purpose of assisting the requesting authority in performing its regulatory functions. Consequently the DFSA requires the requesting authority to keep the information confidential and not to disclose it to any other person without the written consent of the DFSA.

5.8 You will see then that there are a number of restrictions on the ability of the DFSA to disclose confidential information. In summary, they are:

• the DFSA may only use or disclose confidential information to fulfil a DFSA regulatory purpose or legal obligation;

• the DFSA may only disclose confidential information to domestic and foreign regulators and authorities if it is for the purpose of assisting them in the performance of their specific regulatory or enforcement functions regarding financial services and criminal legislation; and

• the DFSA may only disclose an individual's compelled testimony to a law enforcement agency for the purpose of criminal proceedings against the person if the person consents to the disclosure or if the DFSA is required by law or court order to disclose the statement.