Dubai Breaks New Ground in Middle East Finance as Crown Prince Guarantees Legal Independence of Regulator
His Highness Sheikh Mohammed bin Rashid Al Maktoum today acted decisively to guarantee the independence of the Dubai Financial Services Authority (DFSA), which will regulate business in the Emirate's new financial centre.
This means that Dubai will now be the first jurisdiction in the entire region to have a financial centre similar in regulatory structure and quality to the main global capital markets when the Dubai International Financial Centre (DIFC) launches within the next few weeks.
In a formal letter to the DFSA Regulatory Council, the Crown Prince gave his personal commitment to the independence of the DFSA and declared that this will be formally enshrined in the Dubai Law which will signal the launch of the DIFC.
In his letter, His Highness said:
"We hereby assure you of our strong commitment to the highest standards of transparency and of good governance throughout the DIFC. These standards are very important for the launch and for the continuing development of the Centre. Accordingly, we instruct you to secure these high standards wherever they are relevant in the DIFC. They include transparency and good governance in handling conflicts of interest (whether actual or perceived). You are invited to apply these standards in your own affairs, and to Offer advice to others of what is required".
His Highness has taken this bold and unprecedented step in order to ensure that the DIFC will act as a magnet to attract business from the world's leading Banks and Financial Institutions. A key feature of the most successful capital markets in Europe, Asia and North America is a legal and regulatory environment which guarantees Financial Institutions the transparency, certainty and ease of use that they require.
Dr. Habib Al Mulla, Chairman of the DFSA Regulatory Council, added:
"The way is now clear for the DIFC when it launches, very soon, to become the powerful engine of business and employment creation that our region needs".
"The Regulatory Council is grateful to His Highness for the speed and decisiveness with which he has acted. I would like to pay tribute also to the expert and dedicated staff of the DFSA for the way they have put in place all the building blocks of what can now be seen as a regulatory authority of genuine world quality."
David King, Acting Chief Executive of the DFSA added:
"This is an historic decision because it means the DFSA will be the first regulator in the region free to operate on the same independent basis as our counterparts in the major centres such as London, Hong Kong and Wall Street.
"We have already drafted and completed in record time an entire legal and regulatory environment based on global best practice. We now have the operational independence needed to give confidence to the global leaders in banking and international finance to base their own regional operations in the DIFC.
"The decision will also give confidence to other jurisdictions and international bodies that the DIFC will be an entirely trustworthy addition to their ranks. Any reservations there may have been can now safely be set aside".