6 March 2017 — DFSA Strengthens Dubai's Financial Technology Proposition
Dubai, UAE, 6 March 2017: The Dubai Financial Services Authority (DFSA) is enhancing its contribution to Dubai's position as the region's leading hub for innovation through the publication of a new FinTech consultation paper today. The paper is the third in a series, setting out the DFSA's approach to the regulation of pioneering financial technology (FinTech) activities.
The DFSA has been following developments in the FinTech industry and, in 2016, determined that the current regime for regulating firms in the Dubai International Financial Centre (DIFC) is already flexible enough to accommodate many aspects of FinTech without introducing new rules. Today's consultation sets out the DFSA's approach to FinTech firms that want to test innovative products and services in the DIFC.
Firms meeting the qualifying criteria will receive a Financial Services Licence, referred to as an Innovation Testing Licence, which reflects the nature of the activities to be conducted during the testing phase. The DFSA will put in place limits on the FinTech testing activities to ensure appropriate controls for the safety of any customers involved. Given the limits on activities permitted during testing, FinTech firms will not have to comply with DFSA Rules where they are inappropriate at a testing stage.
The testing phase is a step towards the FinTech firm obtaining a full Financial Services Licence.
Ian Johnston, Chief Executive at the DFSA, said: "The DFSA's approach to Fintech has been to regulate where needed, in order to create an environment that encourages innovation in technology in its many forms and applications. The DFSA will continue to watch as the market develops and respond to the evolving requirements of this industry."
Peter Smith, Managing Director, Policy and Strategy, at the DFSA, added: "The DFSA has been discussing opportunities with a number of interested FinTech firms. We have concluded that it would be helpful to current stakeholders, and to the wider public, for us to set out more explicitly how we will deal with future enquiries from those interested in establishing a presence in the DIFC for a FinTech business."
The DFSA is committed to providing the regulatory infrastructure to support the sustainable development of FinTech in the DIFC. Earlier this year the DFSA launched two consultations which proposed frameworks for the regulation of loan-based and investment-based crowdfunding platforms.
The DFSA's consultations follow the DIFC's launch of the FinTech Hive Accelerator programme in January 2017, the first such accelerator programme in the region. The programme provides a platform for financial services and technology firms to build solutions for the financial sector.
The DFSA's approach is also aligned with the UAE Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, National Innovation Strategy to create an innovation-friendly ecosystem. Technology is a pivotal part of this strategy, and plays a central role in the Dubai Plan 2021 to develop the Dubai economy, as evidenced by initiatives such as the Dubai Future Accelerators and the Dubai Blockchain Strategy.
The Consultation Paper can be accessed by the following link:
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For further information please contact:
Dubai Financial Services Authority
Level 13, The Gate, West Wing
Tel: +971 (0)4 362 1613
The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in or 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, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for supervising and enforcing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) requirements applicable in the DIFC. The DFSA also exercises delegated enforcement powers under the DIFC Companies Law. These include powers to investigate the affairs of DIFC companies and partnerships where a material breach of DIFC Companies Law is suspected and to pursue enforcement remedies available to the Registrar of Companies (Roc).
Ian Johnston was appointed as Chief Executive of the DFSA in June 2012. Ian joined the DFSA in November 2006, as a Managing Director, to head the Policy and Legal Services Division.
Ian was admitted to practice Law in Australia in the early 1980s and has spent most of his career in the private sector. He held a number of senior positions within the financial sector and was CEO of one of Australia's major Trustee Companies. During that time, Ian played a leading role in the Trustee industry and served on the National Council of the Trustee Corporations Association.
In 1999, Ian joined the Australian Securities and Investments Commission where he held the position of Executive Director, Financial Services regulation, and spent several terms as an acting Commissioner. In 2005, Ian took up a position with the Hong Kong Securities and Futures Commission as a Special Advisor.
Ian is a past Chairman of the Joint Forum, which comprise representatives of the major international regulatory standard-setters (IOSCO, IAIS and the Basel Committee). In August 2016, he was re-elected to IOSCO's Growth and Emerging Markets Steering Committee, a position he has held since 2013. He is also a member of the Financial Stability and Technical Committee (FSTC) of the IAIS, the global standard-setting body for insurance regulation, and was a member of the Board of Directors of the Financial Planning Standards Board (from Jan 2011–Mar 2016).
Peter Smith, Managing Director of Head of Policy and Strategy, joined the DFSA in June 2012 as Head of Policy to lead further development of the DFSA's policy framework. He joined the Executive Committee in early 2015, and was appointed a Managing Director in early 2016. Mr Smith is also responsible for overseeing the DFSA's strategic planning, including its annual business planning cycle, and the organisation's approach to setting its Risk Tolerance and managing non-firm specific risks.
He is an alternate member of the IAIS Financial Stability and Technical Committee, and is also involved in IAIS working groups. Mr Smith has over 25 years of regulatory experience. Prior to joining the DFSA, he was Head of the Investments Policy Department at the UK Financial Services Authority. Earlier roles in the UK included policy areas, supervision, bank resolution, internal audit and risk management. From 2003 to 2007, Mr Smith was seconded to the European Commission in Brussels, working on banking issues, supervision of financial groups, and the future of supervision within the European Union. Mr Smith holds a Master's degree in finance from London Business School.