As global investors, as well as businesses, have come to Dubai to establish their position, it has indicated turning the financial center of the Middle East, a success!! Two of the major financial sectors of the city are DIFC and DFSA, and both have been a vital part of the growth of Dubai. Dubai Financial Services Authority DFSA is an independent regulatory system, who are responsible for handling financial and market activities!
These activities are conducted within the Dubai International Financial Center and are in charge of functioning as a policy market, enforcer, and regulator as well. The vision of this regulatory department is to turn DIFC into the leading financial center in the Middle East, including the South Area and Africa region. In addition to handling the financial aspect of the city, they are also responsible for supervising and making enforcement towards anti-money laundering, and counter-terrorist financing, to safeguard every transaction.
We have all heard about DIFC, but we have never explored the area of DFSA. Let us explore what they do, what services they offer and why are they important in UAE.
What Does DFSA Do in UAE?
To protect and enhance the reputation, and the goodwill of the DIFC, and to represent it as a global financial center, DFSA came into existence! They ensure that all the participants in the market, dealing with finances adhere to the standards of professionalism, and do business with transparency.
They also ensure that fairness is practiced at all costs, so there is no scope for unfair trade practices. They also develop the confidence of the investors concerning the DIFC financial markets, by making sure they are properly supervised as well as regulated well. All the businesses are thoroughly checked, as a confirmation of being in the market with confidence.
Difference between DIFC and DFSA
To understand DFSA, you need to understand what DIFC does and what its role in the Middle East is. DIFC came into establishment in the year 2004, proving to be a well-known and trusted financial hub. However, it functions in the UAE as a separate entity, and has its unique, and own legal system as well as a framework that is covered around legalities! There are several services offered by DIFC which include financial and legal services, regulatory frameworks that match with international standards, and office spaces as well. This is especially helpful for all the companies who are looking to establish their presence in the UAE market. Currently, this financial hub houses around 2000+ firms which include insurance companies, banks, service providers, as well as other asset management firms.
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Now, the DFSA is the one responsible for regulating DIFC, and it follows the laws abided by the financial center. DFSA is a regulator of financial services within the branches of the Dubai International Financial Center, and its role is to ensure everything is done with transparency. They also ensure that DIFC is abiding by and following the rules and regulations laid by international standards. They hold a strong position for overlooking all the activities of the financial firms that DIFC is tied up with, and then providing licenses to them. Further, they take responsibility for conducting investigations, assuring that these firms comply with the regulations needed.
The DFSA is in charge of making close professional relations with the international organization, and regulators for meeting with the set international standards. DFSA is mainly focusing on supervising the financial services firms that are within the DIFC framework. Whereas, Dubai International Financial Center is covering a range of services for the entries to set up their base in the region. They both share critical responsibilities, which need to be aligned and met with international standards.
Do you Think Your Business Needs DFSA Registration?
Yes, it is mandatory! Under rule 9.8.3 mentioned in the DFSA rulebook, of the Markets Rules Module, the entities reporting it must disclose it through a DFSA-approved Regulatory Announcement Service. There is a dedicated website of the regulatory authority which has everything included, along with a list of all the necessary Approved Regulatory Announcers!
This list keeps on adding and updating as and when they approve the new regulatory announcers. If you are DFSA registered, you must make this announcement submission agreement through DFSA-approved Regulatory Announcement Services! There is an online form which needs to be filled and the registration number must be submitted in it!
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Objectives and Aims of DFSA
Dubai Financial Services Authority takes legal authorities to handle a list of things, which includes.
- They are responsible for promoting and considering fairness concerning all financial services.
- Protecting all the direct, as well as indirect users of DIFC.
- Grow and maintain the financial well-being and stability of financial service sectors that are linked with DIFC!
- In charge of preventing, detecting as well as limiting the actions that can cause any sort of damage to the reputation of DIFC.
- They hold the power to enforce the laws and responsibilities that can apply to all the regulated parties of DIFC.
- From administering Markets Law 2012, Law Regulating Islamic Financial Business 2004, Investment Trust Law 2006, and Collective Investment Law 2010, they take care of everything.
- They take action against the prevention of money laundering activities, by working closely with the UAE Central Bank.
Supporting Financial Companies So Stay in Trend
Now that you know the importance of the Dubai Financial Services Authority DSFA, you should know that they are exploring as well as adapting to innovative solutions. They have acted to be at the forefront of helping fin-tech firms make proper regulatory decisions. They are acting an as important part, giving guidance to these companies in and around Dubai for their growth and development. To be on the right track, and follow the necessary protocols, these companies listen to the guidance and instruction by the authority. In fact for the growth and development of their firms, they keep on upgrading and enhancing, to match with the current market trend.
