DIFC's first regulatory draft soon

The first regulatory draft of the Dubai International Financial Centre (DIFC) is expected to be ready in a couple of weeks, sources said here yesterday.

Fifteen of the Fortune-100 companies are expected to sign up for the DIFC by August, sources added.

Meanwhile, it has been confirmed that Ian Hay Davison, until now acting chief commissioner, is the new chairman of the regulatory council.

The chief commissioner of the Regulatory Agency is expected to be appointed by the month-end. Sources said by the year-end - by when the DIFC would be operational - it would have 25 "senior" regulators working -most globally acknowledged.

Also, of the 64 "highly serious" inquries received so far, 75 per cent are from institutions in the U.S. and Europe.

"We want to have 15 'landmark client status' firms at the DIFC. These will be Fortune-100 companies. We are now talking to about 25 of them, and the plan is to announce 15 who have signed in advance, by August," sources said.

They said the legal work is going ahead and on schedule to meet the year-end deadline to start work. "We should have the first draft by the month-end or soon thereafter.

"Roughly, by the end of the year we should have 25 very senior regulators - some as well known as Ian Hay Davison, chairman of the regulatory council."

Sources said interest in DIFC is high with 64 financial institutions contacting it. Of these, roughly 35 per cent are from continental Europe, another 10 per cent from UK, 30 per cent from the U.S. and about 10 per cent from Asia.

Sectorally, asset management institutions lead by far at 37 per cent, and if combined with private banking (18 per cent), they constitute the bulk of the serious interest in DIFC.

Institutional and corporate banking contributes another 30 per cent of the serious interest and insurance another 15 per cent.

Davison said: "The governors expressed their satisfaction with the rigorous international best practices incorporated in the design principles for the regulatory structure and processes and the draft legal framework to enforce it."

He also briefed them on the new members of the regulatory council and also announced the chief commissioner of the Regulatory Agency will be appointed by end-May.

Advisory board member Dr Kenneth Courtis, vice-chairman – Asia of Goldman Sachs said: "The DIFC has put in place a well thought-out regulatory and legal framework and has attracted some of the best talent to run it. There is no doubt that global fund managers will find DIFC as the only market in the entire region with internationally accepted characteristics."

He also added that there is huge interest from the global fund management industry to set up operations in the DIFC.

Yesterday, James D. Wolfensohn, president of the World Bank Group met Anis Al Jallaf, DIFC chairman and Hussein Al Qemzi, COO.