DIFC moves towards completion of its constitutional, legal and regulatory frameworkPress Release 14 Jul 2003 01:16 pm
The Federal Cabinet of the UAE today (Monday) approved a Federal Decree that will allow the full establishment of the Dubai International Financial Centre.
Under the UAE constitution, the Cabinet decision now needs to be ratified by the Supreme Council of the Federation.
The Federal Decree is an unprecedented constitutional innovation because it will allow the Dubai International Financial Centre (DIFC) a remarkable degree of sovereignty. This will give the DIFC a unique position in the global economy - comparable to centres outside the UAE - and one that is designed to make it a magnet to attract business from the worlds leading banks and financial institutions.
The Federal Decree is a ‘generic’ decree, allowing Financial Free Zones to be established in the UAE. Thus, as well as approval by the UAE Supreme Council, the DIFC also needs a specific decree to establish it as a Financial Free Zone. This further decree is in hand.
The DIFC will also require the enactment of its Regulatory Law and Company Law before it has the basis to grant operating licenses to financial institutions. The Regulatory Law and the Companies Law are now complete and approximately a dozen further laws are now in the final stages of preparation and will be introduced over the next few months.
Already more than 30 of the world’s biggest financial institutions have expressed an interest in setting up in the DIFC. Four have put in applications for operating licenses - even before the process has been put in place - and many more are now expected to follow suit.
Phillip Thorpe, Chief Executive Officer of the DIFCs Regulatory Authority, said:
The entire legal and regulatory framework for an international financial centre has never before been created from scratch - and never at such speed.
We have been free to draw on the best practice of all the worlds major financial centres - and to avoid their drawbacks.The result is that the DIFC legal and regulatory environment will offer financial institutions the transparency, certainty and ease of use that they require - and will also give confidence to other jurisdictions and international bodies that the DIFC will be an entirely trustworthy addition to their ranks.
I would like to pay tribute to my colleagues in the Regulatory Authority, to the UAE and Dubai officials and to our legal and professional advisers - all of whom have worked with great skill and dedication to bring us to this important milestone in the establishment of a new capital market.