Dubai FSA published proposals to enhance the early intervention powers and to introduce a framework on recovery and resolution in the Dubai International Financial Center (DIFC). The proposals require amendments to the Regulatory Law (DIFC Law No. 1 of 2004) and addition of a new module of the rulebook called recovery and resolution (RAR). Some changes are also proposed to the glossary (GLO) and market rules (MKT) modules of the rulebook. The deadline for providing comments on this consultation is April 13, 2020.
The Dubai FSA objectives, set out in the Regulatory Law, include promoting confidence and fostering financial stability in the financial industry in the DIFC, protecting the users of financial services and preventing damage to the reputation of the DIFC. This consultation paper presents proposals that seek to establish a comprehensive framework to allow to deliver on these objectives by reducing the risk of an authorized firm’s failure and, in case it is inevitable, by providing for an orderly management of such a situation. The proposed framework covers a number of tools allowing the Dubai FSA to improve on the measures employed in heightened supervision of firms considered as "weak." It also covers robust recovery and resolution planning for authorized firms that the Dubai FSA considers should be subject to this exercise. Finally, it covers a comprehensive framework for the resolution of firms that are failing or likely to fail.
The proposals will be of interest to persons who
- can carry on the financial service of accepting deposits (PIB prudential Category 1)
- can carry on the financial service of providing credit or dealing in investments as principal (PIB prudential Category 2)
- can manage a profit-sharing investment account where that account is received on an unrestricted basis (PIB prudential category 5)
- intend to conduct the financial services referred to above
- use, or propose to use, the services of the persons referred to above
- are investors in capital instruments of the above-mentioned persons
- are advisors to the above-mentioned persons
Related Link: Consultation Paper
Comment Due Date: April 13, 2020
Keywords: Middle East and Africa, UAE, Banking, Recovery and Resolution, DIFC, Resolution Framework, Dubai FSA
Previous ArticleUS Agencies Propose to Amend Covered Fund Provisions of Volcker Rule
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.