10 Leaves

The proposals in this paper are intended to provide more clarity on what the DFSA requires from: (i) Authorised Firms that fall within the scope of the Client Assets regime; and (ii) Registered Auditors that prepare Client Asset Auditor’s Reports.

The Financial Services Regulatory Authority ("FSRA") released a Consultation Paper in late 2023, and invited feedback from the general public regarding suggested changes, which would mainly affect the General Rulebook ("GEN") and the Fees Rules ("FEES").

This was after a fee benchmarking exercise against other financial centres.

The approved changes came into effect on the 1st of January 2024, and are in full effect.

The Riffle

Starting Jan 2025, ADGM Registration Authority will charge lesser fees for approvals and licenses of non-financial and retail business, and a slight increase for financial companies.

Today, we’re going to talk about the key reporting requirements that Fund Managers need to be aware of, the consequences of non-compliance, and why it’s crucial to adhere to these guidelines.

Primary Audience – Crowdfunding Platforms and Credit Fund Managers

The DFSA has made amendments to legislation, effective from August 1, 2024.

The older DIFC Prescribed Regulations had provisions wherein Prescribed Companies could avail office space and hire employees. There were also some other offerings such as a technology holding company, that fell in between PCs and Commercial Holding companies. 

The DIFC has now streamlined their offerings by issuing new Prescribed Companies Regulations, that make PCs pure passive vehicles. 

The new DIFC Prescribed Company Regulations addresses a significant gap in the offerings from the center, where there was no product comparable to the Special Purpose Vehicle regimes that existed in many comparable jurisdictions. The earlier PC regime required a Qualifying Applicant or a Qualifying Purpose, both of which tied in the product to existing DIFC clients. 

Under the new regime, Prescribed Companies can be established by qualifying applicants (GCC Persons, DIFC Persons etc.), for a qualifying purpose (aviation, maritime, IP, crowdfunding and structured finance), to hold GCC-registrable assets, or, in case none of these apply, through a DIFC Corporate Service Provider so as to provide the required substance. 

In essence, this brings a new level of flexibility to the offering – for instance, you can now form a PC if you are from India, to hold an asset in Africa, by appointing a CSP at the DIFC. 

Since the Prescribed Company cannot have employees, the DIFC has spun off the Qualifying Applicant bit into a different product called Active Enterprises. One can set up Holding Companies, Proprietary Investment Companies and Managing Offices as an Active Enterprise, with visa options, provided that one has a tie-in to the center already. 

The new DIFC Prescribed Company Regulations addresses a significant gap in the offerings from the center, where there was no product comparable to the Special Purpose Vehicle regimes that existed in many comparable jurisdictions. The earlier PC regime required a Qualifying Applicant or a Qualifying Purpose, both of which tied in the product to existing DIFC clients. 

Under the new regime, Prescribed Companies can be established by qualifying applicants (GCC Persons, DIFC Persons etc.), for a qualifying purpose (aviation, maritime, IP, crowdfunding and structured finance), to hold GCC-registrable assets, or, in case none of these apply, through a DIFC Corporate Service Provider so as to provide the required substance. 

In essence, this brings a new level of flexibility to the offering – for instance, you can now form a PC if you are from India, to hold an asset in Africa, by appointing a CSP at the DIFC. 

Also, since the Prescribed Company cannot have employees, the DIFC has spun off the Qualifying Applicant bit into a different product called Active Enterprises. One can set up Holding Companies, Proprietary Investment Companies and Managing Offices as an Active Enterprise, with visa options, provided that one has a tie-in to the center already. 

The financial services industry is growing at a rapid pace in the MENA region. The Dubai International Financial Centre, or DIFC, is at the forefront of this change. Ranked among the top 10 onshore financial centres worldwide, the DIFC is arguably the place to be for financial service companies looking at targeting not just the UAE, but the whole MENA region. Setting up a representative office in DIFC is one of the ways of testing the waters, before deciding on taking on a full-fledged license.

And so our topic today, ladies and gentlemen, is all about DIFC Representative Offices.

Today we have a look at the key findings from the 2023-2024 Thematic Review conducted by the Dubai Financial Services Authority, or DFSA. This review focuses on firm disclosures and their compliance with financial promotions rules. 

The DFSA undertook this Thematic Review to evaluate how well Authorised Firms adhere to financial promotion rules, accurately represent their regulatory status, and distinguish responsibilities between group entities. This review also aimed to identify both good and poor practices among firms.

This podcast is the second of a series that specifically addresses the DFSA Seo Letters that are published from time to time. Today, we have a detailed look into the SEO Letter related to DFSA’s Assessment of Private Banking Business Models.