Dubai is moving to attract a bigger share of the regional funds industry as the emirate seeks to boost its appeal as an international financial centre. The Dubai Financial Services Authority (DFSA), which regulates the Dubai International Financial Centre (DIFC), has set up a panel to review its rules to make the DIFC more attractive for investment managers and potential international investors.
Paul Koster, the chief executive of the DFSA, said: "The panel will take this opportunity to shape the funds regime in a way that best serves the needs of the industry and investors as well as continuing to promote the DIFC as a centre of excellence in funds management." The global funds industry has seen big losses this year after suffering from falling equity markets and a retreat by investors to safer investments. At the same time, the region's big private equity players have withdrawn from the market amid continuing investor uncertainty. Gulf states including Bahrain, Saudi Arabia and Qatar are investing billions of dollars developing financial centres that are aimed at luring regional and international corporations to the region.
The DFSA's panel of 10 industry experts includes lawyers, asset managers and risk assessment professionals who will look into the DIFC's regulatory framework covering collective investment funds over the summer and will send a report to the regulator by the end of September, the authority said in a statement yesterday. Financial authorities around the Gulf are looking at the regulations that govern their funds industries to try to make them more attractive for potential international investors and funds managers.
The GCC asset management industry is estimated to be worth between US$90 billion (Dh330.57bn) and $100bn, according to the Securities and Investment Company, a Bahrain-based investment bank. The industry is still developing in the Gulf and lacks the sophistication of more mature fund markets in the US and Europe, said Ahmed Atwan, the chief operating officer of Millennium Finance Corporation in Dubai.
"The funds industry needs to be more professional and there should be more corporate governance in rules and regulation," he said. "Changes should be happening around how partners are compensated. There has to be more transparency in how funds act in the best interest of limited partners and compensate them." firstname.lastname@example.org