Is Regulation Important?

16/05/2014

There are big changes taking place in the regulation of financial services in U.A.E. So I thought it may be useful to give you a summary of who regulates what and how. This is important as the regulator is responsible for protecting the interests of those using financial services.

Currently, within the U.A.E. there are three regulatory bodies covering financial services. The Central Bank is responsible for banking supervision. Securities and Commodities Authority [S.C.A.] is responsible for stock markets, stock brokers and investment businesses and the Insurance Authority is responsible for insurance companies and brokers offering car insurance etc.

Each regulatory body is bringing in their own requirements in respect of the regulated firms capital adequacy, compliance standards and qualifications of staff.

If you choose to work with an adviser within the U.A.E. in addition to checking their professional qualifications, experience and expertise, it is important that he or she is regulated by one of the above entities.

Occasionally, I hear tales of advisers flying in from UK and other highly regulated jurisdictions and claiming that the regulator in their home country governs their conduct. This is only true if the business is transacted in the jurisdiction that the regulator is responsible for.

For instance, the UK’s Financial Conduct Authority [F.C.A.] has no jurisdiction within the U.A.E. and a complaint to them about a product you bought from a UK regulated adviser in U.A.E. is unlikely to result in a sympathetic hearing.

I hope that the above is of assistance, please let me know if you have any questions or comments.