Dubai FSA Outlines Business Plan for 2023-2024
The Dubai Financial Services Authority (DFSA) published its business plan for 2023-2024 to support the growth of Dubai and UAE as a well-regulated and forward-thinking financial services hub. The 2023-2024 banking supervisory activities will focus mainly on prudential risks and non-financial risks.
With regard to the banking supervisory activities, DFSA will continue to adopt a proactive, forward-looking, and risk-based approach to supervision, paired with an effective early intervention regime to help safeguard the stability of the banking sector in the DIFC. DFSA will monitor developments in asset quality, asset concentration, and banks’ assessment of changes in creditworthiness of clients. It will also review liquidity and asset-liability management frameworks, systems to monitor and control liquidity mismatches and the availability of high-quality liquid assets and robust contingent sources of liquidity. Additionally, with regard to non-financial risks, DFSA will focus on technology, cybersecurity, exposures to third-party risk, and financial crime. DFSA also plans to engage with banks to discuss challenges in climate-related financial risks and monitor the development of climate related governance and risk management frameworks.
The business plan for 2023-2024 outlines four key strategic themes—Delivery, Engagement, Innovation, and Sustainability. The two-year business plan outlines an ambitious roadmap to meet the statutory objectives for the Dubai International Financial Center (DIFC), including establishing and maintaining the reputation of DIFC as a leading global financial center. As part of the business plan, DFSA will:
- enhance its policy framework through the implementation of international standards, ongoing development of its support for trading venues and markets, and strengthen its regime for the protection of client assets to maintain the integrity of the DIFC financial services industry.
- continue to support the federal authorities in fighting financial crime and implement the recommendations arising from the Financial Action Task Force (FATF) Mutual Evaluation of the UAE in 2020.
- work at a national level to deliver approaches on corporate governance, disclosure, and taxonomy and work with the DIFC firms to improve engagement and understanding of environmental, social, and governance (ESG) issues.
- strengthen utilization of technology to address regulatory obligations and challenges as well as to enable development and use of new technology by the regulated community within DIFC.
- continue to update the broader regulatory regime within DIFC so that it addresses market developments—both risks and innovations—and remains in line with its vision to be an internationally respected regulator, leading the development of financial services through strong and fair regulation.
- progress further with the Digital Data Strategy to enhance its digital capabilities as a regulator.
Keywords: Middle East And Africa, UAE, Banking, Business Plan, ESG, Credit Risk, Liquidity Risk, Climate Change Risk, Cyber Risk, Third-Party Risk, DIFC, ALM, Dubai FSA
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Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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