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Two new DIFC laws enacted

New laws promote investor protection and market oversight

The Dubai International Financial Centre (DIFC)
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The Dubai International Financial Centre (DIFC). Two new DIFC laws enacted on Thursday, June 21, 2012. These Laws are the Markets Law 2012 and the Regulatory Law Amendment Law 2012, which are both administered by the DFSA
Gulf News

Dubai: The Dubai Financial Services Authority (DFSA), the independent regulator of all financial and ancillary services conducted through the Dubai International Financial Centre (DIFC), Thursday announced that His Highness Shaikh Mohammad Bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, has enacted two new DIFC Laws.

These Laws are the Markets Law 2012 and the Regulatory Law Amendment Law 2012, which are both administered by the DFSA..

The new Markets Law 2012, which replaces the current Markets Law 2004, brings about a number of changes including changes to prospectus disclosure, what activities constitute an offer, market misconduct provisions and corporate governance.

The prospectus disclosure changes include the requirement for a prospectus to be formally approved by the DFSA before it can be used to make an offer of securities to the public, or to have the securities referred to in the prospectus admitted to the official list of securities maintained by the DFSA.

The new laws are designed to promote investor protection in a manner that better aligns the DIFC to international standards, particularly European Union (EU) requirements and the Organisation for Economic Co-operation and Development (OECD).

The amendments to the Regulatory Law 2004 support the changes brought about by the new Markets Law regime, for example, the law now provides for the DFSA to undertake regulatory oversight of auditors of DIFC incorporated companies listed on an Authorised Market Institution (AMI) or any other exchange.

The amendments also make changes to the recognition powers of the DFSA with respect to cross-border trading including recognition of alternative trading systems, the quasi exchanges which are developing an increasingly important role in trading of financial instruments on the international capital markets.

The changes permit non-DIFC exchanges and clearing houses meeting certain regulatory standards to provide access to their facilities to persons located in the DIFC and permit non-DIFC firms meeting certain regulatory requirements trade investment products on a DIFC exchange from a place of business outside the DIFC.

“These changes bring our markets regime into closer alignment with the EU requirements while retaining features necessary to accommodate regional needs and circumstances,” said Ian Johnston, Chief Executive Officer of the DFSA

The DFSA’s supervisory oversight has also been expanded to include auditors for companies incorporated in the DIFC which seek listing on an exchange in the DIFC or in another jurisdiction. “These changes will also allow the DFSA to meet Principle 8 of the Core Principles of Independent Audit Regulators by the International Forum for Independent Audit Regulators, of which the DFSA is a member,” said Johnston

The new Markets Law 2012 and the Regulatory Law Amendment Law 2012 were enacted on June 7, 2012, and come into force on July 5, 2012.