DFSA Chairman calls for more effective regulatory frameworks
Dr. Habib Al Mulla, Chairman of the Dubai Financial Services Authority, has called for a well-regulated and competitive environment for local and international business in the Middle East. Dr. Al Mulla outlined his vision for successful financial markets in an address to 30 delegates at the Middle East’s first IPO Summit at Dusit Dubai Hotel.
The IPO Middle East Summit has examined the recent surge of IPOs in the UAE, Saudi Arabia and the GCC, and the regulatory changes that will affect public offerings. The summit, which ran from March 5-7, presented updates on recent and proposed regulatory changes, strategies to create fair, efficient, liquid and transparent markets, and methods to protect both small and large investors from unfair practices.
Dr. Al Mulla stressed the importance of world-class regulation standards for regional markets and called for a review of existing rules. “If the region wants to compete with international markets, it must initiate and maintain standards that are equivalent to international jurisdictions. It is important to provide safeguards and promote investor confidence, and the DFSA has taken this to be the premise of its regulatory policy. This has resulted in legislation based on, but not limited to, laws found in jurisdictions such as London, the US and Hong Kong.”
Plans to set up the Corporate Governance Committee by the Dubai International Financial Centre Authority will help achieve the right balance between good corporate governance and less red tape, Dr. Al Mulla said.
The IPO Middle Summit provided a forum for industry executives to network with representatives of GCC companies that are exploring a listing on regional stock markets.
Addressing summit delegates, Dr. Al Mulla said: “Market regulation is an important responsibility and the Dubai Financial Services Authority is playing a major role in addressing this need successfully. The involvement of the DFSA helped to close down a ‘boiler room’ in the Sharjah Free Zone. The DFSA was able to provide information to the Sharjah Police that ultimately led to the closure of the company’s illegal operations.”
The DFSA has developed for consultation Collective Investment Regimes proposals to promote the DIFC as a thoroughly regulated, competitive environment for local and international fund managers.
The proposals are designed to help marketing by ‘DFSA Authorized Firms Units of Foreign Funds’ to encourage a level playing field for Domestic Funds and Foreign Funds.
Dr. Al Mulla said: “When developing these proposals we have taken into account the regulatory requirements applied in other overseas jurisdictions, and the standards developed by the International Organisation for Securities Commissions (IOSCO) for regulating collective investment schemes. The Fund regime, when implemented after consultation, will give Domestic Funds in the DIFC the ability to attract investment from, among others, institutional investors like pension and insurance funds.”
Referring to criticism of the Tokyo Stock Exchange last year for its failure to cancel incorrect trades due to a technology oversight, Dr. Al Mulla called for greater analysis of technology issues related to trading to protect against malpractice.