How does the DFSA collaborate with the other authorities in Dubai and the UAE to assure its independence?
Collaboration and independence are fully consistent with each other. By building and maintaining strong relationships and mutual respect with federal and Dubai government colleagues, the DFSA is able to educate, learn from, and work with policy makers and regulators alike. Over the years, the DFSA has been able to cultivate both professional and personal relationships with a number of authorities in the UAE. Those relationships have resulted in mutual respect and effective inter-governmental co-operation. For example, the DFSA works closely with the Anti-Money Laundering and Suspicious Cases Unit of the Central Bank of the UAE (CBUAE) and is represented on the National Anti-Money Laundering Committee. The DFSA and the Securities and Commodities Authority (SCA) of the UAE conduct joint training seminars, and we participate in joint inspections of firms of mutual interest. Our relationship with the SCA is excellent and continues to be developed between supervisory staff and at different levels of seniority. Quarterly meetings are organized to discuss matters relevant to capital markets and enforcement. In addition to formal meetings, informal meetings are held as well. Recently, the DFSA and the SCA liaised closely to obtain regulatory equivalence from the EU's regulatory authorities for access to the bloc's capital markets. In the past, the DFSA participated on the SCA's taskforce to prepare for the MSCI upgrade to emerging market status. The DFSA also works closely with the UAE Ministry of Finance regarding the OECD Global Forum's review of tax information exchange legislation and processes. We drafted a model memorandum of understanding (MoU) that the Ministry now uses to facilitate information exchange with not only the DIFC, but also the other free zones.
The vision of HH Sheikh Mohammed Bin Rashid Al Maktoum is to transform Dubai into a global hub for the Islamic economy. How is the DFSA contributing to this transformation?
The DFSA has always been a strong supporter of the development of Islamic finance in the UAE, by providing a dedicated Islamic financial services regulatory framework. This framework provides an effective and enabling environment for sustainable growth of Islamic finance in the DIFC by facilitating safe and sound operations for firms, addressing risks they may face. We have also published a tailored handbook of all the rules applicable to Islamic finance activities. The DFSA has also been a major contributor to global standard-setting and capacity development in the domain of global Islamic finance, with its robust contribution to the Islamic Financial Services Board as well as participation in various fora to share our expertise and knowledge base. One of the three key pillars of the Islamic economy plan is to position Dubai as a hub for the issuance of sukuk and the provision of other Islamic financial services. The demand for sukuk has been rising strongly and is expected to grow significantly in the next few years, driven by strong economic growth in the Middle East and in Asia. The global demand for sukuk is expected to reach $421 billion by 2017. The DIFC is well placed to play an important role in this respect. For example, the value of sukuk admitted to the official list of securities in the DIFC was at $8.95 billion in July 2014, compared to $6.1 billion in 2013. Between NASDAQ Dubai and the Dubai Financial Market, the value of total sukuk listed (in April 2014) has surpassed $20 billion, making Dubai the third largest sukuk issuance center globally, after Malaysia and London.
The DFSA regulates around 440 entities. How does the DFSA combat money laundering?
Money laundering is one of the most significant risks to the achievement of the DFSA's objectives. As a consequence, we ensure that our regulatory staff have the skills needed to deal with this complex subject. We have recently updated our regulations in this area, following changes by the Financial Action Task Force. In addition to staying compliant with the requirements of this critical standard-setter, we have benchmarked our supervisory practices against other regulators around the globe to ensure that our people adequately assess the risks and appropriately allocate resources in this field.