A recent announcement by government of UAE regarding the merger of two Financial Regulatory Authorities in UAE is an ideal example of our progressive government even in the difficult times of the pandemic. A single financial regulatory authority will be established by merging UAE Insurance Authority and Securities Commodities Authority of UAE. The merger announcement is an aftermath of the review period announced by the government in September 2019 by virtue of Ministerial Resolution 814/2019. Corporate Lawyers of Dubai through this article will endeavor to ascertain the advantages of the merger on the financial sector of the country.
With an objective to fill in the existing gaps between the two regulatory authorities to ensure certainty in the market seems to be the only agenda and objective of the decision for merger. It is an extremely positive move towards a stronger administrative environment in the UAE and will give genuinely provide clearance to advisory companies, specialist organizations and investors.
Advantages of the Merger
As we understood the objective behind the issuance of this order for merger it is clear that the objective will certainly turn out as an advantage to all the financial companies and avoid the red tape and variations in the regulations issued by both authorities. Dubai Corporate lawyers has experienced multiple overlapping in the rules and guidelines issued by both the authorities. It is apparent that both the authorities are obliged to issue guidelines for companies performing such activities to govern and manage the market, however, the new organization will aim at issuing a unified code for all such companies regulated by both authorities. We are quite confident of the facts that the merged regulatory authority will issue vigorous and complete system that carries clarity to the market. The amalgamation of the controllers likewise can possibly promote improvements in the financial market for investors as well as the customers.
Similarly, as with any administrative change, there will be a time of vulnerability while we hold on to perceive how the new merged entity will work, and how the new administrative structure will be presented and authorized. One specific region for thought is the issue of permitting companies to register companies in such activities. Some of the major concerns to be raised by companies in financial sector would be the issue of licenses previously issued by the existing authorities that whether it will be accepted by them or they will further issue new licenses to such companies. This is an issue especially significant for the service provider who is as of now required to have separate permits authorized by the IA and the SCA so as to offer a total support to their clients. The response to this inquiry isn’t clear at this stage, however we speculate the authorizing issue won’t be as basic as changing over existing licenses, yet will at any rate require a progress period for existing licensees to adjust to the new system.
The open door additionally exists for the new controller to upgrade the current IA and SCA Rulebooks, and to deliver a fit-for-reason front line administrative system that will support the improvement of the financial service companies in the UAE.
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