An overview of the Centre’s three independent bodies and the associated laws and regulations
The Dubai International Financial Centre ("DIFC") was launched in accordance with United Arab Emirates (UAE) Federal Decree No. 35 of 2004 as a part of Dubai’s strategic vision to diversify its economic resources and attract capital and investments in the region. It is a Financial Free Zone defined in Federal Law No. 8 of 2004. An independent jurisdiction within the UAE, DIFC is empowered to create its own legal and regulatory framework for all civil and commercial matters.
The following three independent bodies have been established at the DIFC to enable and support the growth and development of businesses in the Centre: the DIFC Authority, the Dubai Financial Services Authority ("DFSA") and the Dispute Resolution Authority ("DRA").
Federal Law No. 8 of 2004 on “The Financial Free Zones in the United Arab Emirates” (the Financial Free Zone Law) mainly.
- Allows the creation of a Financial Free Zone in any Emirate of the UAE, by a Federal Decree.
- Exempts the Financial Free Zones and the Financial Activities from all Federal civil and commercial laws.
- Confirms the application of Federal criminal laws in the Financial Free Zones, including the Federal Laws on Anti-Money Laundering;
- Prohibits DIFC authorised firms from dealing in “deposit taking from the State’s markets […] [and] in the UAE Dirham.
- Restricts DIFC authorised insurers’ dealings in the State to carrying out re-insurance activities.
Federal Decree No. 35 of 2004 (English)
Federal Decree No. 35 of 2004 created the DIFC as a Financial Free Zone in Dubai (the DIFC Law). The Federal Cabinet also made two Cabinet Resolutions that.
- Set out the geographic boundaries of the DIFC.
- Allow the centre bodies and authorised firms to operate outside the DIFC for the first four years because the DIFC was still under construction.
Dubai Law No. 9 of 2004 (English)
Dubai Law No. 9 of 2004 on “The Establishment of the Dubai International Financial Centre” acknowledges the creation of the DIFC and:
- Recognises the financial and administrative independence of the DIFC
- Creates the DIFC centre bodies, which include the DIFC Authority, DFSA and DRA.
- Exempts the DIFC from Dubai laws and regulations, under certain conditions.
Cabinet Resolution No. 28 of 2007 on “Implementing Federal Law No. 8 of of 2004 on Financial Free Zones” further detailed certain provisions of the Financial Free Zones Law.
Dubai International Financial Centre Authority
DIFC Authority was established by virtue of Dubai Law No. 9 of 2004, as amended. DIFC Authority is responsible to oversee the strategic development, operational management and planning of Dubai International Financial Centre. It is also responsible for the development and administration of laws and regulations other than those related to the financial services firms.
Dubai Financial Services Authority (DFSA)
The DFSA was created under Dubai Law No. 9 of 2004, as amended. DFSA is an independent regulator of financial and related services conducted in or from the Centre. The DFSA also supervises regulated companies and monitors their compliance with the applicable laws and regulations. The DFSA’s powers as a regulator are granted to it under the provisions of the Regulatory Law, DIFC Law No. 1 of 2004. Consequently, the DFSA is authorised to make rules that enable it to swiftly respond to market developments and business needs.
Dispute Resolution Authority (DRA)
Originally formed under Dubai Law No. 9 of 2004, DIFC Courts acted as an independent administration of justice for resolving all civil and commercial laws. In 2014, amendments to some provision of Law No. 9 of 2004 saw the establishment of the Dispute Resolution Authority (DRA) within the Dubai International Finance Centre (DIFC). The Dispute Resolution Authority is comprised of three authorities: DIFC Courts, which was established by virtue of Dubai Law No. 12 of 2004, as well as the Arbitration Institute and any other tribunals or ancillary bodies established in accordance with Article 8(5)(b) of this Law.