The Dubai Financial Services Authority (DFSA) is implementing its new Market Law today, July 5, and lawyers are welcoming the change with open arms. International law firm DLA Piper has said that the law will have a far-reaching impact on the Dubai International Financial Center (DIFC) and abroad.
Aryan Schoorl, Legal Director of DLA Piper Middle East, said, “As a former DFSA regulator I’ve seen a number of changes within the organization and welcome the new Markets Law. The regulatory changes allow the DFSA to attract additional market participants trading in and from the DIFC and this should be an incentive for more vibrant and liquid markets in the DIFC. Notably the stock exchange, which has faced difficulties in relation to generating critical mass in terms of listed stocks, market participants, and the resulting liquidity.”
The new law will align the markets in the UAE with those in Europe, facilitating the financial interactions between Dubai and the EU. Problems will arise, however, should the implementation of the underlying procedures not be understood fully. There were problems in the past with interactions between Nasdaq Dubai and the DFSA, mostly due to a lack of clarity surrounding the applicable standards and authorities, and officials want to avoid a repeat of that situation.
Regulators around the world have been changing legislation in the past years, particularly after the global financial crisis in 2008. The new DFSA changes will allow the Dubai financial scene to keep up with the international market, ensure market standards, and apply consistent regulation.
Schoorl added, “The DIFC welcomes participants from all over the world and so we hope the DFSA factors in the requisite flexibility to ensure that there is no unnecessary duplication of standards. The DFSA does have that tool, in the form of waivers and modifications; however it needs to ensure that it uses those tools in a responsible and predictable way.”
He finished, “What we hope to see over the coming year is the DIFC actively promoting market participation from the neighboring GCC trading, investor, and issuer communities as this would make a fundamental impact on the sustainability of the DIFC market.”