Dubai’s Financial Services Authority (DFSA) has relaxed restrictions on fund managers in effort to solidify Dubai as a hub for international investment alongside London, New York and Hong Kong.
The regulatory body for the Dubai International Financial Centre (DIFC), has lowered the free trade zone’s fund manager application fee to $10,000 from $40,000 and expanded the scope for marketing of foreign funds in or from the DIFC.
DIFC: relaxing fund rules
Furthermore, under the old regime, DIFC-based fund managers were restricted from managing foreign funds. Similarly, foreign fund managers were restricted from acting as DIFC managers without first establishing a base in the DIFC and obtaining a DFSA license.
The DFSA implemented the changes in mid-July following recommendations made by a panel of market practitioners.
Jacques Visser, managing director of Algebra Capital and member of the panel, said in a statement the DIFC and DFSA were responsive to industry concerns the zone needed to become more competitive. “The DIFC and the DFSA have listened to the industry and have made changes to the DIFC’s funds regime based on a series of sensible and pragmatic recommendations,” Visser said. “As a result, the DIFC is now more attractive as an investment centre for both foreign and domestic fund managers.’’
The DIFC, a 110-acre free trade zone, was created to attract capital into the MENA region. To do so, it has the authority to create its own legal and regulatory framework. It has so far enacted regulations allowing financial institutions and companies to operate under complete foreign ownership and implemented a zero percent tax rate on income and profits. Companies also are able to repatriate capital and profits without restrictions.
The changes ‘’will stimulate further growth of the funds management industry within the centre. The regulatory changes bring the DIFC in line with other leading financial hubs around the world.”, according to Abdulla Al Awar, chief executive officer of the DIFC Authority, the body which develops policies and strategy for the DIFC.