The Federal Cabinet of the United Arab Emirates (UAE) Government has approved a Federal Decree that will allow the full establishment of the Dubai International Financial Center (DIFC). Under the UAE constitution, the Cabinet decision needs to be ratified by the Supreme Council of the Federation.
The decree is an unprecedented constitutional advancement because it will allow a significant degree of sovereignty. The new law allows 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.
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.
DIFC is being established to position Dubai as a universally recognized hub for institutional finance and as the regional gateway for capital and investment to the Middle East. A critical component of this is the DIFC Regulatory Authority. The Authority is an independent unitary regulatory authority responsible for the oversight of asset management, banking, securities trading, Islamic finance, re-insurance, and a regional financial exchange. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
