Regulatory Update: Middle East Edition – April 2024

The Dubai International Finance Centre (‘DIFC’) announced the agenda for the 2024 Dubai Fintech Summit, which will be held on 6-7 May at Madinat Jumeriah. The event attracts international and prestigious policymakers, intellectuals, industry professionals, investors, and entrepreneurs to discuss the future of finance and FinTech.

Attendees will participate in workshops, lectures, and discussions on the following themes:

• regulatory frameworks
• the financial renaissance
• eco-finance and its impact
• investment vanguards
• global financial dynamics
• FinTech 2.0.

The event will also host the FinTech World Cup, where regional startups will compete for US$1M of investment funding.

The agenda can be viewed here.

On 30 April, the DIFC was accepted to join the Global Cooperation Arrangement for Privacy Enforcement (‘CAPE’). The DIFC will be the first non-Asia Pacific Economic Cooperation (‘APEC’) jurisdiction to join the Global CAPE. Participating members can assist with investigations and share information without entering separate Memorandums of Understanding (‘MoUs’), creating a more efficient enforcement infrastructure. Members of the Global CAPE currently include the United States, Australia, Canada, Mexico, Japan, the Republic of Korea, the Philippines, Singapore and Chinese Taipei and are subject to an international multilateral agreement with the United Kingdom.

You can read more on the Global CAPE here.

On 8 April, the DIFC Data Protection Commissioner announced an MoU with the Philippine National Privacy Commission (‘NPC’) to strengthen collaboration and cooperation in data privacy. The MoU further establishes a relationship between the two jurisdictions and commits the authorities to collaborate in joint enforcement, share training and knowledge, and to develop compatible mechanisms for cross-border data flows.

The MoU was signed at the International Association of Privacy Professionals (‘IAPP’) Global Privacy Summit 2024 in Washington, DC, USA.

You can read the NPC article here.

On 2 April, the Dubai Financial Services Authority (‘DFSA’) Chief Executive, Ian Johnson, was reappointed as Vice Chair of the Africa and Middle East Regional Committee and board member of the International Organisation of Securities Commissions (‘IOSCO’) for 2024-2026. The IOSCO is the international standard setter for securities regulation, bringing together 42 financial market regulators to discuss and exchange information on regional and global issues specific to capital markets development and regulation.

You can read the DFSA article in full here.

On 5 April, the DFSA and the Securities and Futures Commission (‘SFC’) co-hosted a high-level roundtable on opportunities for Hong Kong managers to distribute funds in the DIFC. Over 15 top executives of Hong Kongese asset management firms attended the roundtable discussion, where attendees heard of the new regulatory requirements for offering Hong Kong-domiciled funds in the DIFC and prospects for Hong Kongese asset managers in the DIFC. This will include access to investors in the UAE market via the UAE Fund Passporting Regime.

The discussions will continue at a follow-up roundtable in May.

You can read the DFSA article in full here.

On 5 April, the DFSA published an SEO Letter to inform all Relevant Persons that the DFSA’s new Fixed Penalty Notice (‘FPN’) Regime will come into force on 15 April 2024. This regulatory amendment follows the previously published Consultation Paper 149 on FPNs.

Changes have been made to the Regulatory Law 2004 (“the Law”) which allows the DFSA to issue FPNs if it has reasons to believe that a person has contravened a prescribed provision without having to follow the decision-making procedures set out in schedule 3 of the Law.

The amendments affect:

• General Rulebook (‘Gen’)
  — Section 14 on the application of Fixed Penalty Notices
• Fees Module (‘FER’)
  — Section 1.2 on the removal of standardised payment due dates of 21 days amended
      to instead include a due date on the Fixed Penalty Notice
  — to remove Section 7 on late returns
• Glossary Module (‘GLO’)
  — ‘Fixed Penalty Notice’ to reference Article 91 of the Regulatory Law.

You can read the Dear SEO Letter here.

On 28 April, the DIFC announced it had strengthened its position as the principal hub for the (re)insurance business. It has achieved the highest gross written premiums (‘GWP’) recorded in its 20-year history at close to US$ 2.6Bn. Further supporting this growth, the DIFC announced a 20% increase in the registration of insurance and reinsurance firms in the DIFC.

The DIFC is also the co-host of the Dubai World Insurance Congress, one of the largest global insurance events. It is set to convene over 1,300 delegates from over 73 countries on 29-30 April at Atlantis, the Palm.

On 29 April, the DIFC announced itself as a global hub for many of the world’s wealthiest families and individuals, with a total net worth exceeding US$ 1Tn. Dubai has ranked first in the Middle East, Africa, and Southern Asia (‘MEASA’) region in terms of wealthiest population centres. Recently, His Excellency Abdulla bin Touq Al Marri, Cabinet Member and UAE Minister of Economy celebrated with DIFC leadership and leading family businesses, the one-year anniversary of the DIFC Family Wealth Centre.

You can read the DIFC article from 28 April here and the article from 29 April here.

On 18 April, the Abu Dhabi Global Market (‘ADGM’) won the “Most Trusted Financial Centre Brand, Middle East” award for 2024 at the Global Brand Awards, organised by the Global Brands Magazine.

The award was granted through an extensive evaluation considering the following merits:

• customer trust and satisfaction
• innovation and technology
• regulatory compliance
• brand value, amongst other factors.

You can read the ADGM article in full here.

On 24 April, the ADGM signed an MoU with Hacken, a leading blockchain security auditing firm, to strengthen blockchain security and compliance. In collaboration with Hacken, the ADGM’s Registration Authority (‘RA’) will develop security standards and on-chain monitoring solutions, supporting the ADGM’s Distribution Ledger Technology (‘DLT’) Foundation framework. In addition, the MoU will develop security and compliance standards, advanced DLT foundation monitoring arrangements, and the development of Artificial Intelligence (‘AI’) enhanced monitoring solutions.

You can read the ADGM article in full here.

On 29 April, the ADGM’s Financial Services Regulatory Authority (‘FSRA’) issued “Dear SEO; Strategic Review on Targeted Financial Sanctions (‘TFS’) Case Studies”. The letter shares the publication of the Executive Office for Control and Non-Proliferation’s (‘ECON’) report “Strategic Review on Targeted Financial Sanctions Case Studies” (‘the Report’) and reminds firms of their obligation to comply with Cabinet Resolution No. (74) of 2020 (‘the Resolution’).

The Resolution requires firms to:

• consult with the latest TFS Review Strategic Report
• comply with the relevant regulatory rulebooks, including the anti-money laundering rulebook and general rulebook, amongst others
• register and notify using the UAE Central Bank (‘CBUAE’) GoAML platform
• register for the latest sanction changes and report involvement to the Financial Intelligence Unit (‘FIU’).

The Report reviews cases between 2019 and 2024 and highlights TFS categories and classifications as well as details typologies and red flags.

The Report covers:

• classification between 2019 and 2021 based on:
  • source of information
  • suspicion identified
  • tools and instruments used
  • patterns and typologies.

• classification between 2022 and 2023 based on:
  • reporting entity
  • suspicion identified
  • tools and instruments used
  • patterns and typologies.

The published case studies can be found here.

On 16 April, the Abu Dhabi Blockchain Fund Forum held an investors’ event discussing investment opportunities in blockchain technology. The forum gathered thought leaders and industry professionals to discuss the evolving landscape of blockchain technology and digital finance. In addition, the attendees discussed the potential of Web3, hearing from expert speakers including Coinbase, Abu Dhabi Investment Authority (‘ADIA’) and First Abu Dhabi Bank (‘FAB’).

You can read the ADGM article in full here.

Between 15 and 20 April, the Ministry of Finance (‘MOF’) participated in the 2024 Spring Meetings of the International Monetary Fund (‘IMF’) and the World Bank Group (‘WBG’) in Washington, DC, USA. The event brought together bankers, ministers of finance and development, key politicians, private sector executives, representatives from civil society and academics to discuss issues of global concern, including the world economic outlook, poverty, economic development, and global aid. The UAE’s delegation emphasised the importance of further global collaboration to establish effective and sustainable solutions for developmental needs such as macroeconomic stability, debt sustainability, geopolitical challenges on global trade and medium-term growth prospects.

You can read the MOF article in full here.

On 19 April, the MOF launched a digital consultation on the proposed Research and Development (‘R&D’) tax incentive under the UAE Corporate Tax Law. The MOF requests comments from stakeholders, including businesses operating in the UAE, advisors, service providers, institution leaders, and investors, to understand the potential R&D activities undertaken by businesses, considerations regarding the application of the incentive, and the implementation of the initiative.

You can read the MOF article here and submit your comments here. Comments are welcome until 14 May.

Between 27 and 30 April, the MOF participated in the 2024 Islamic Development Bank (‘IsDB’) Group Annual Meetings in Riyad, Saudi Arabia. The attendees met under the theme “Cherishing our Past, Charting our Future; Originality, Solidarity and Prosperity”, bringing together international and regional governors and general assemblies to discuss economic development and institutional matters. The UAE delegation highlighted the UAE’s focus on providing stability and prosperity to developing lower-income countries and emphasised the UAE’s efforts to provide foreign aid and international development programmes.

You can read the MOF article in full here.

On 25 April, the UAE Central Bank (‘CBUAE’) partnered with Accenture to implement a Supervisory Technology (‘SupTech’) solution as part of its Financial Infrastructure Transformation Programme and Enterprise Data Management Programme. The SupTech solution will automate and streamline activities for banks and licenced financial institutions thereby enhancing the effectiveness of supervisory processes, including money laundering, financial crime, and compliance oversight.

You can read the CBUAE article in full here.

On 4 April, the Saudi Arabia Capital Market Authority (‘CMA’) announced the Appeal Committee for Resolution of Securities Disputes’ (‘ACRSD’) decision to convict five investors for violating the Capital Market Law. They imposed fines of SAR 3.5M on the investors and obligated four of the investors and a local company to pay SAR 41.4M due to the illegal gains achieved.

The violations included manipulation and misleading activities. Four of the investors executed a series of transactions before and after the listing of the firm, resulting in the increase of their percentage ownership without the required disclosures to shareholders and the public. The fifth investor used WhatsApp to promote opinions in two group chats, aiming to influence the company’s share price. He subsequently sold his shares and profited from the price increase.

You can read the CMA article in full here.

The UN Security Committee updated an entry on its sanction list in light of the global political landscape. As a member of the UN, the UAE is committed to implementing the resolutions, and all firms must report on their involvement with sanctioned entities.

On 15 April, the Security Council 1718 Sanctions Committee amended one entry from ‘National Aerospace Development Administration’ to ‘National Aerospace Technology Administration’.

Further details can be found here.

On 25 April, the Security Council ISIL (Da’esh) and Al-Qaida Sanctions Committee added one entry for ‘Dr. Sanaullah Dhafari’.

Further details can be found here.

On 23 April, the European Parliament rejected the European Commission’s proposal and voted to keep the UAE on the European Union’s (‘EU’) list of High Risk Third Countries i.e. the “grey list”. It was rejected by 490 votes to 64 with 56 abstentions. This decision follows the lobbying of multiple parties, such as Transparency International EU, who sought to block the removal of the UAE from the grey list. The EU’s decision diverges from FATF as the UAE was recently removed from the FATF grey list in February 2024.

The Motion for Resolution can be found here, the minutes of the plenary session here and the verbatim report of proceedings here.