HSBC Bank Middle East Limited (HBME), an indirect wholly-owned subsidiary of HSBC Holdings plc, on Thursday confirmed that it has transferred its place of incorporation and head office from Jersey to the Dubai International Financial Centre (DIFC) effective June 30, 2016, as per an official statement.
As a result of the transfer, HBME operations at DIFC will be regulated by the Dubai Financial Services Authority (DFSA) for the entire Middle East region.
HSBC first opened in Dubai in 1946, when it was called the British Bank of Iran and the Middle East, but its head office has been in Jersey since 1994.
The global lender confirmed that the transfer will have no material impact on day-to-day business for its customers in the UAE. Within the next two years, HBME plans to move some of its 4,000 staff, spread across four locations, to a 20 storey building near the world’s tallest tower in Dubai
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According to the local regulator, the transfer will attract assets valued at more than $40 billion on the balance sheet to DIFC, which has developed a diverse business cluster over the last ten years.
Dubai plans to roughly triple the financial industry size by 2024, aiming to attract 1,000 of the world’s top financial firms to DIFC. Also, the idea of a possible merger of the financial regulators has been on the cards for years to improve the depth and transparency of Emirati capital markets.
David Eldon, Chairman of HSBC Bank Middle East, said: “HBME in the Mena region has been operating under a very effective regulatory regime administered by the Jersey Financial Services Commission for twelve years. As we look to the future, aligning our business and regulatory oversight geographically makes strong strategic sense. HSBC has operated certain businesses within the DIFC since 2006, so we know the jurisdiction and regulator well, and we look forward to developing our broader relationship with them.”
Essa Kazim, the governor of the DIFC, welcomed HSBC’s decision and said in the press release: “The relocation of HSBC’s regional management office to DIFC reinforces the attractiveness as well competitiveness of the UAE economy to international players in the banking and financial services sector.
“I am confident that through its presence at DIFC, HBME will play an important role in fostering closer ties among the financial communities in the Mena region,” Kazim added.