Dubai Financial Services Authority (UAE)
Regulatory regime for whistleblowing
The regime provides enhanced legal protection for persons who report misconduct internally within DFSA Regulated Entities or externally to their auditor, the DFSA or a law enforcement agency. It also aims to improve the whistleblowing culture in these entities by increasing transparency around how they manage regulatory concerns, assess those concerns and, where appropriate, escalate those concerns. Importantly, a DFSA Regulated Entity must also put in place measures to protect the identity of the whistleblower and to protect them from suffering any detriment.
SEO letter on remote working
The purpose of this letter is to inform Senior Executive Officers of the DFSA’s expectations regarding remote, or hybrid, working, and the controls that regulated entities need to put in place.
The Financial Action Task Force (FATF) decision in relation to the United Arab Emirates (UAE)
The Dubai Financial Services Authority (DFSA) has reiterated its full support of the UAE’s commitment to this key regulatory priority and is resolute in having zero tolerance for money laundering, terrorism financing and proliferation financing activities, nor for deliberate breaches of United Nations and UAE sanctions.
The DFSA we will continue to work closely with the Dubai International Financial Centre Authority (DIFC) and alongside fellow regulators and relevant government authorities to secure the stability and integrity of the UAE’s financial system.
Notice of amendments to legislation May 2022
The DFSA Board made several rulemaking instruments that come into force on 1 June 2022. Updated modules:
- Collective Investment Rules (CIR).
- General Module (GEN).
- Glossary Module (GLO).
- Prudential – Investment, Insurance, Intermediation and Banking Business Module (PIB).
- Fees Module (FER).
Central Bank of Bahrain (CBB)
Amended regulations for collective investment undertakings
The amendments to the regulations focus on dividing CIUs into two broad categories – the first category is targeting retail investors and the second category is targeting accredited and affluent investors. The regulations pertaining to the first category of CIUs contain details regarding the nature of investment in the CIUs and require receiving CBB’s prior approval whereas the second category only requires notification to the CBB by the placement agent.
The new regulations emphasize the importance of key areas such as the corporate governance requirements, high standards of business conduct, safeguarding and segregation of investors’ money, and disclosure standards in line with international best practices.
Abu Dhabi Global Markets (UAE)
Discussion paper: policy considerations for decentralised finance
The FSRA has issued this discussion paper to foster dialogue amongst the DeFi community, including financial institutions, digital asset businesses and policy makers on how DeFi may be regulated. It sets out the FSRA’s views on the likely medium-term direction of DeFi, high level policy positions that the FSRA is considering adopting, and an exploration of what a DeFi regulatory framework might look like. The deadline for providing comments on the discussion paper is 30 June 2022.
Invites for applications to the 5th Reglab cohort focusing on the decentralised web 3.0 and token economy
The theme of the 5th Reglab is “DeFi”, an emerging part of the global financial ecosystem that holds the promise of delivering more efficient and tailored financial service.
To further enhance its engagement with this new generation of solutions, the FSRA is looking to the DeFi community to recruit the next cohort of applications for its RegLab programme. This would also include innovative solutions that can enhance the FSRA’s capability to appropriately supervise DeFi applications.
Capital Market Authority (Saudi Arabia)
Draft regulatory framework for equity crowdfunding for public consultation
The draft framework aims to support financial technology innovations in the capital market by setting out a regulatory framework for equity crowdfunding, including determining the requisite authorisation for capital market institutions to carry it out, and to enable companies that have a Financial Technology Experimental Permit to obtain the appropriate authorisation to practice it as a capital market institution, in line with international best practices. The consultation period closes 10 June 2022.
Saudi Central Bank (Saudi Arabia)
Updating measures implemented to protect banking consumers against financial fraud
SAMA has clarified that the updated package of measures includes raising the daily transfer limit back to its pre-measures ceiling, noting that consumers retain the option to lower this limit through contacting the bank. On the same note, SAMA brought-back rules allowing consumers to remotely open bank accounts online in accordance with standard regulatory procedures. The updated rules came into force as of April 12, 2022..
Financial Conduct Authority (UK)
FCA review finds weaknesses in some challenger banks’ financial crime controls
A review by the FCA has found that challenger banks need to improve how they assess financial crime risk, with some failing to adequately check their customers’ income and occupation. In some instances, challenger banks did not have financial crime risk assessments in place for their customers.
FCA strengthens consumer protection by speeding up removal of firms that do not use their regulatory permission
The FCA is to use new powers to more swiftly cancel or change what regulated activities firms are permitted to do, these are known as permissions. This new power is available following a change in the law allowing the FCA to streamline and shorten the removals process. The FCA will provide a firm with two warnings if it believes it is not using its regulatory permission. The FCA will then be able to cancel the permission, or change it, 28 days after the first warning if the firm has not taken appropriate action.
FCA reminds consumers of the risks of investing in cryptoassets
The FCA has seen some recent social media posts regarding cryptoassets and non-fungible tokens (NFTs). The FCA has not been given regulatory oversight over direct investments in cryptoassets and NFTs. There are no consumer protections for those who buy any cryptoassets and NFTs, and they are not protected.
FCA finalises proposals to boost disclosure of diversity on listed company boards and executive committees
The FCA has finalised rules requiring listed companies to report information and disclose against targets on the representation of women and ethnic minorities on their boards and executive management, making it easier for investors to see the diversity of their senior leadership teams.
FINMA (Switzerland)
FINMA guidance for portfolio managers and trustees: important next steps
Since 1 January 2020 portfolio managers and trustees must be licensed by FINMA and supervised by an SO. For existing portfolio managers and trustees, a transitional period applies until 31 December 2022, by which date FINMA must have received a license application. It is the responsibility of the institutions concerned to meet the applicable deadlines. The transitional period can only be extended in exceptional circumstances.
FINMA revises circular on operational risks of banks
In March 2021, the Basel Committee on Banking Supervision published revised principles for the sound management of operational risks and new principles for operational resilience.
These aim to increase the banks’ capacity to overcome severe, complex, systemic, or prolonged operational problems.
FINMA’s supervisory practice regarding the qualitative requirements is based on these principles, meaning that it implements the Basel standards in a principles-based, technology-neutral, and proportional way.
Please contact us if you would like to discuss or need assistance on any of the above topics.
