UAE regulators join forces in bid to tackle financial crime concerns
The United Arab Emirates capital markets regulator and the Dubai International Financial Centre have held a special meeting and revealed a series of initiatives, in a bid to tackle concerns about financial crime in the region.
At an industry gathering of regulators, held on Sunday, the UAE capital markets regulator the Emirates Securities and Commodities Authority (ESCA) said that countering financial crimes remains a top priority of regulators, while at the same time providing a supportive environment to help new businesses.
The UAE recently adopted enhanced regulations in anti-money laundering, in a bid to stop illicit money flow, with harsher punishments and heavy fines. ESCA also issued a resolution last year on corporate governance, in line with international best practices to promote what it calls a corporate culture of maintaining the highest levels of corporate governance standards at publicly listed companies.
“(It has) provided easier routes for redress for investors in terms of handling complaints and dispute resolution, in addition to working on regulations pertaining to investor protection schemes, and whistle-blower protection,” Dr Obaid Al Zabbi, acting chief executive officer of Emirates Securities and Commodities Authority (ESCA), told the regulatory gathering, according to a report in local news outlet Zawya.
“We continuously consider the suitable and most proportionate regulatory framework required for licensing new products and services, both traditional and novel ones, and carefully dealing with innovations such as fintech,” he added.
Best practice training
Eisa Kazim, governor at the Dubai International Financial Centre (DIFC), said that it has already trained 33 UAE Nationals to become proficient in regulatory best practice as part of Dubai Financial Services Authority’s (DFSA) Tomorrow’s Regulatory Leaders Programme.
Kazim said at the meeting that the financial industry is influenced by new challenges presented by innovation as well as a fast developing regulatory environment, according to the Zawya report.
“Looking ahead, 2017 will bring an element of recalibration as plans for the implementation of Brexit unravel, numerous elections take place across the globe and a call for deregulation of financial services are passed,” said Kazim. “We need to focus on how to bring new technologies, new ways of working and new sub-verticals in the financial industry.”
DIFC added that it is helping form the next generation of the accounting standards through its work in the Islamic Finance Consultative Group.
‘Not fully equipped’
“The repeated episodes of turmoil that the financial markets have gone through during the past decade, has proven that many of the established governance, compliance and risk management systems were not fully equipped to deal with the emerging risks that the markets encounter,” Al Zaabi said.
“Moreover, these crises showed that most financial institutions were too focused on their own internal risk management and did not sufficiently appreciate their contribution to the overall larger financial system, and this is when systemic risk has come to be on the top of the regulatory agenda,” he added.
The improved regulations have helped ESCA to climb 39 places on the Minority Investor Protection Index in the Ease of Doing Business 2017 report issued by the World Bank, making the UAE the highest ranking Arab country on this metric and among the top 10 in the world.