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Dubai Regulator Lowers Regulations with FinTech License

Last Updated March 4, 2021 4:56 PM
Samburaj Das
Last Updated March 4, 2021 4:56 PM

The Dubai Financial Services Authority (DFSA) is lowering the barriers for FinTech firms with a new license to foster and encourage innovation in financial technologies in Dubai.

Dubai’s financial regulator is making it easier for FinTech startups and firms to gain entry and offer new services in the region through the introduction of its Innovation Testing License (ITL).

CCN.com reported on the regulator’s plans to bestow the license to FinTech companies and startups in early March upon unveiling a roadmap of a consultation paper. The regulator revealed its intention not to regulate unless needed, claiming it would be “flexible, responsive, innovative and adaptable” with FinTech firms.

Qualifying firms will be able to benefit from the license by developing and testing new services and concepts within the Dubai International Financial Centre (DIFC), a sprawling 110-hectare free-zone district that allows companies to hold 100% ownership of their base without the need for a local partner.

“FinTech is changing the landscape for financial services, providing more opportunities to seek financing and increasing financial inclusion,” said Ian Johnston, chief executive of the regulatory body. “As regulators, it is our responsibility to provide a framework which supports the sustainable development of this industry while protecting consumers and financial stability.”

In its announcement  this week, the DFSA revealed that firms will be able to use the ‘restricted’ financial services license for testing innovative products or services between a six to 12-month period. The regulator will consider extending that period for ‘exceptional cases’.

The authority’s FinTech-forward agenda is markedly inclined with the wider technology remit adopted by Sheikh Mohammed Bin Rashid Al Maktoum – Ruler, Prime Minister and Vice President of the United Arab Emirates.

Johnson added:

Our efforts to develop a regulatory framework that promotes growth and innovation, while protecting financial stability and consumers, is part of our contribution to Dubai’s greater vision of becoming an information-based society and a smart city.

A notable initiative of the smart city program is the ‘Dubai Blockchain Strategy” which aims to switch 100% of all government documents from paper to a blockchain by 2020.

Featured image of Dubai downtown from Shutterstock.