DIFC gets federal decree

18 July 2003
The federal cabinet on 15 July passed a draft law which will enable the Dubai International Financial Centre (DIFC) to draw up and promulgate its own regulatory and company law. The cabinet decision remains to be ratified by the Supreme Council.

If passed, the legislation will provide the legal framework necessary for the DIFC to open for business as a financial centre. The aim is to construct a legal and regulatory environment conducive to the development of regional capital markets. The DIFC's initial focus is expected to be on wholesale banking, equities and bond markets, fund management, reinsurance and back-office services.

For this to happen, critical mass will have to be built around a sizeable core of heavyweight international financial institutions. A handful of banks have expressed interest in applying for DIFC licences, but the delays in constructing the legal framework have prevented greater progress being made (MEED 31:5:02).

DIFC officials say that the path has been cleared for the award of the first licences before the end of September.

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