Dubai Tries to Attract Investors by Lowering the Bar for Professional Status and More
- Dubai is set to strengthen the supervisory and enforcement powers of its financial watchdog to get closer in line with International Standards. Also, creates a new category for $500,000 Qualified Investor Fund.
The Dubai International Financial Centre (DIFC) has announced that a new law which amends the local regulatory law from 2004 and various other DIFC laws, will come into force tomorrow, Thursday, August 21, 2014, and will make a number of significant changes to the regulatory regime of the Dubai Financial Services Authority (DFSA). The 2014 amendment law was enacted by the government of the most populous city in the United Arab Emirates, or in their words: "His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister in his capacity as the Ruler of Dubai."
In an apparent effort to attract more international investors, the emirate's Collective Investment Law has been modified to allow the creation of a new category of fund, called a "Qualified Investor Fund" (QIF). This type of fund would be available to professional investors willing to make a minimum investment of at $500,000, much lower than the $1 million minimum initially proposed by the DFSA. Each QIF would be limited to 50 investors and as an addition to the existing categories of DIFC funds, the new QIF rules provide for lower Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term of funds specifically designed for higher net worth investors.
The changes also strengthen the DFSA's supervisory and enforcement powers to bring it more in line with international practice. A new provision has been introduced which prohibits misleading, deceptive, fraudulent or dishonest conduct related to financial products or services. New powers have also been given to the DFSA to suspend a licence or registration for up to twelve months and to prohibit firms from using misleading names. The DFSA already has the right to withdraw licences.
Additionally, some amendments are meant to simplify and improve the structure and process for DFSA regulatory decisions and for appeals against those decisions. Under the changes, the DFSA must follow procedures designed to ensure its decisions are fair and reasonable. The process for appealing against DFSA decisions will be simplified with the Financial Markets Tribunal (FMT) as an independent body with a revised role of reviewing DFSA decisions. The Regulatory Appeals Committee (RAC) which used to hear appeals from DFSA decisions will be abolished.
The current framework for the supervisory oversight of auditors in the DIFC has also been improved by, for example, introducing the registration of audit principles, strengthening rules on auditor independence and making other changes to ensure consistency with international auditing standards.
Mr. Ian Johnston, Chief Executive Officer of the DFSA, commented: "These amendments are an important step in simplifying and improving the structure and procedures for decision making and review of DFSA decisions. They will also strengthen DFSA supervisory and enforcement powers, improve the supervisory oversight of auditors and provide new opportunities for fund managers and investors. They are considered desirable and appropriate for the maturity of the DIFC, given that it has now experienced a decade of operations. They also ensure that the regulatory regime continues to evolve to reflect best international practice."
DME Adds Singaporean Clearing Member
In additional news coming out of Singapore this week, Dubai Mercantile Exchange (DME), the energy futures and commodities venue, announced the approval of Straits Financial LLC as a clearing member on Tuesday.
Straits Financial LLC, a subsidiary of Straits Financial Group, the brokering division of CWT Limited, is one of the largest publicly listed logistics companies in Southeast Asia. The group offers a wide range of financial services including Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Read this Term, brokerage, clearing and electronic trading. Straits Financial LLC is a Futures Commission Merchant ("FCM") at the Commodity Futures trading Commission (CFTC) and the National Futures Association (NFA), a full Clearing Member of the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the Commodity Exchange (Comex), the New York Mercantile Exchange (Nymex) and Clearport.
Christopher Fix, Chief Executive of DME, commented, "I am very pleased to welcome Straits Financial LLC on board as a clearing member. I see great potential in this mutually rewarding partnership to expand our volumes and enhance market access to our flagship DME Oman Contract which is the most relevant oil benchmark for the Asian market."
Jeremy Ang, CEO of Straits Financial Group, said, "Becoming a clearing member on the DME is a strategic development for us as we offer enhanced access to new markets and trading opportunities for our valued customer base. For our energy-focused clients, the DME has a vital role to play by providing oil price discovery and risk mitigation."
The Dubai International Financial Centre (DIFC) has announced that a new law which amends the local regulatory law from 2004 and various other DIFC laws, will come into force tomorrow, Thursday, August 21, 2014, and will make a number of significant changes to the regulatory regime of the Dubai Financial Services Authority (DFSA). The 2014 amendment law was enacted by the government of the most populous city in the United Arab Emirates, or in their words: "His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister in his capacity as the Ruler of Dubai."
In an apparent effort to attract more international investors, the emirate's Collective Investment Law has been modified to allow the creation of a new category of fund, called a "Qualified Investor Fund" (QIF). This type of fund would be available to professional investors willing to make a minimum investment of at $500,000, much lower than the $1 million minimum initially proposed by the DFSA. Each QIF would be limited to 50 investors and as an addition to the existing categories of DIFC funds, the new QIF rules provide for lower Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term of funds specifically designed for higher net worth investors.
The changes also strengthen the DFSA's supervisory and enforcement powers to bring it more in line with international practice. A new provision has been introduced which prohibits misleading, deceptive, fraudulent or dishonest conduct related to financial products or services. New powers have also been given to the DFSA to suspend a licence or registration for up to twelve months and to prohibit firms from using misleading names. The DFSA already has the right to withdraw licences.
Additionally, some amendments are meant to simplify and improve the structure and process for DFSA regulatory decisions and for appeals against those decisions. Under the changes, the DFSA must follow procedures designed to ensure its decisions are fair and reasonable. The process for appealing against DFSA decisions will be simplified with the Financial Markets Tribunal (FMT) as an independent body with a revised role of reviewing DFSA decisions. The Regulatory Appeals Committee (RAC) which used to hear appeals from DFSA decisions will be abolished.
The current framework for the supervisory oversight of auditors in the DIFC has also been improved by, for example, introducing the registration of audit principles, strengthening rules on auditor independence and making other changes to ensure consistency with international auditing standards.
Mr. Ian Johnston, Chief Executive Officer of the DFSA, commented: "These amendments are an important step in simplifying and improving the structure and procedures for decision making and review of DFSA decisions. They will also strengthen DFSA supervisory and enforcement powers, improve the supervisory oversight of auditors and provide new opportunities for fund managers and investors. They are considered desirable and appropriate for the maturity of the DIFC, given that it has now experienced a decade of operations. They also ensure that the regulatory regime continues to evolve to reflect best international practice."
DME Adds Singaporean Clearing Member
In additional news coming out of Singapore this week, Dubai Mercantile Exchange (DME), the energy futures and commodities venue, announced the approval of Straits Financial LLC as a clearing member on Tuesday.
Straits Financial LLC, a subsidiary of Straits Financial Group, the brokering division of CWT Limited, is one of the largest publicly listed logistics companies in Southeast Asia. The group offers a wide range of financial services including Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Read this Term, brokerage, clearing and electronic trading. Straits Financial LLC is a Futures Commission Merchant ("FCM") at the Commodity Futures trading Commission (CFTC) and the National Futures Association (NFA), a full Clearing Member of the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the Commodity Exchange (Comex), the New York Mercantile Exchange (Nymex) and Clearport.
Christopher Fix, Chief Executive of DME, commented, "I am very pleased to welcome Straits Financial LLC on board as a clearing member. I see great potential in this mutually rewarding partnership to expand our volumes and enhance market access to our flagship DME Oman Contract which is the most relevant oil benchmark for the Asian market."
Jeremy Ang, CEO of Straits Financial Group, said, "Becoming a clearing member on the DME is a strategic development for us as we offer enhanced access to new markets and trading opportunities for our valued customer base. For our energy-focused clients, the DME has a vital role to play by providing oil price discovery and risk mitigation."