DFSA upgraded to EU regulatory standard for derivatives and equities clearing

The regulatory framework of the Dubai Financial Services Authority (DFSA) has been classified as equivalent to that of the European Union, for its work with central counterparties (CCPs).

The DFSA said in a statement announcing the classification that European Commission has acknowledged the work undertaken by the DFSA to “instil internationally-recognised best practices including a robust framework that promotes financial stability”.

The Dubai-based regulator said that it hopes that new distinction will encourage cross-border activity between European clearing members and CCPs located in the Dubai International Financial Centre (DIFC), pictured above, by “reducing the regulatory burden” to participate in the market.

A central counterparty clearing house is an organization that exists in various countries to help facilitate trading done in  derivatives and equities markets.

‘Central gateway’

Mr Ian Johnston, chief executive of the DFSA, said: “The DIFC has firmly established itself as the central gateway through which international and regional financial institutions conduct business across the region. The recognition received from the Commission for our regulatory framework for CCPs, will further strengthen the confidence market participants already have when operating in our Centre.”

Nasdaq Dubai is the DFSA-licensed CCP operating in the DIFC in respect of equities and derivatives trading. Alongside the DIFC, the Commission published equivalence decisions for the regulatory frameworks for CCPs of India, Brazil, New Zealand, Japan and the UAE. Other jurisdictions whose CCP regimes are also recognised include the US, Canada, Switzerland, Australia, Hong Kong and Singapore.

The DIFC is bidding to be the main hub for international financial services in the region and in meeting international standards set out under the Principles for Financial Market Infrastructures issued by the International Organisation of Securities Commissions, it believes that it has enhanced its standing internationally.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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