In 2004, the Dubai International Financial Centre – a special economic zone – was established, and with it, the DFSA – the Dubai Financial Services Authority – came into existence.
While throughout the rest of the UAE (United Arab Emirates) the Federal Securities and Commodities Authority provides the same services the DFSA does within the DIFC, the two agencies are distinct and quite independent.
What services are we really talking about though? The primary task and objective of the DFSA is to provide a regulatory environment compliant with international standards, within the DIFC. As such, its regulatory services extend to banking and credit, securities, investment funds, asset management and it even maintains an internationally accessible derivatives exchange.
The enforcement of AML (anti-money laundering) and CTF (counter-terrorist financing) laws is also one of the DFSA’s responsibilities.
In addition to all the above, the DIFC’s Registrar of Companies delegated added powers to the DFSA, which allow it to investigate companies operating within the DIFC.
On a theoretical level, the main objective of the DFSA is to become an internationally recognized, strong and fair provider of financial regulation. As far as its regulatory philosophy is concerned, the DFSA aims to minimize regulatory burden, which adopting a risk-based stance.
The above considered, it is obvious that whoever wants to set up shop and conduct business involving financial services out of the DIFC, has to go through the DFSA. The DFSA is the entity that registers and authorizes such businesses, and it keeps an eye on them, in order to prevent them from causing any reputation-wise damage to the DIFC.
The DFSA does not just administer the laws which govern the operation of financial service providers, it also enforces them.
Given how it is essentially the regulatory/law enforcement arm of the DIFC (from the perspective of financial service providers, of course) the DFSA is responsible for the promotion of the DIFC as a top international financial hub, as well as for the furthering of the interests and objectives of this special economic area.
Whenever it comes to regulation, costs always pop into the picture as a major factor for operators looking for a legal umbrella under which to safely peddle their services. It is one of the DFSA’s objectives to make sure that its regulatory costs are proportional with the benefits it offers through its regulation.
The powers and the functions of the DFSA need to be exercised in a fair and transparent way.
The laws on which the activity of the DFSA relies, are spearheaded by the Regulatory Law of 2004, which in effect establishes the organization and sets the regulatory framework it has to oversee.
The Markets Law of 2012 is also an important one, as it sets the standards of conduct to which market participants need to adhere.
The 2004 Law Regulating Islamic Financial Business is obviously also one of the cornerstones of the legal framework upon which the activity of the regulatory body is predicated.
This framework is rounded out by the Collective Investment Law of 2010 and the Investment Trust Law of 2006.
Below is a list of brokers that are DFSA regulated
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