The Dubai Financial Services Authority (Dubai FSA) updated the Prudential Investment, Insurance Intermediation, and Banking Business Module of its Rulebook, following the finalization of a number of proposed legislative changes that had been set out in the Consultation Paper No. 139. Dubai FSA published the Prudential – Investment, Insurance Intermediation and Banking Business Module Rule-Making Instrument (No. 322) 2021, which repeals and replaces the Prudential – Investment, Insurance Intermediation and Banking Business Module of the Dubai FSA Rulebook with an updated version and came into force on January 01, 2022. Dubai FSA also proposed to introduce a regime for credit funds, with the feedback period open until January 19, 2022.
For the credit funds regime, Dubai FSA sets out proposals on the structure and regulatory requirements for credit funds. The regulatory authority proposes to allow fund managers to use fund property for the direct origination of loans or purchase of loan portfolios and to create a specialist class of funds that can originate loans and/or purchase loan portfolios—and are to be called credit funds. The credit funds would be subject to the restrictions and controls discussed in the proposals. According to the proposal, a credit fund must, as its investment objective, use at least 90% of the fund property for either loan origination or loan portfolio acquisition. As with other types of funds that are subject to similar limits on the composition of fund property, Dubai FSA does not intend to "impose any specific requirements as to the other types of investment, not exceeding 10% of the investment portfolio, which may be made."
Comment Due Date: January 19, 2022 (Credit Funds Regime)
Effective Date: January 01, 2022 (Rulebook Module)
Keywords: Middle East and Africa, UAE, Dubai, Banking, Rulebook, Credit Funds, Lending, Loan Origination, Credit Risk, Portfolio Management, Dubai FSA
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