The Dubai Financial Services Authority (DFSA), the financial regulator of the Dubai International Financial Center (DIFC), tied up with the Australian Securities and Investments Commission (ASIC) to put in place a regulatory framework for cooperation on financial technology (FinTech) innovation.
“Today’s agreement underscores our commitment to maintaining strong channels of communication with our regulatory peers and creates a regulatory framework that supports the latest developments in fintech innovation," said Ian Johnston, the chief executive of the DFSA.
Under the terms of the agreement, the authorities will share information on developments in innovation in each market. The agreement also introduces a referral mechanism that enables the authorities to refer innovative businesses to their respective authorities.
The move is the latest in the burgeoning fintech sector in the UAE. This month, the DIFC said it had established a US$100 million fund to invest in fintech start-ups, as the free zone bids to position itself as the regional centre for the fast-growing disruptive sector and vies to bring together the next generation of leaders and entrepreneurs to address growing needs of the region's financial services industry, using innovative technology solutions.
The DFSA/Asic agreement's aim is to catalyse growth and efficiency in a variety of areas including trade finance, alternative finance and Sharia-based services, the Dubai authority said at the signing in Melbourne Australia.
"We really want to consolidate the position of the DIFC to be at the forefront of the changes that are going to happen in the financial sector," Essa Kazim, the DIFC's governor, said earlier this month on the sidelines of the DIFC-organised Global Financial Forum in Dubai.
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In addition, the financial centre, in partnership with the business management consultancy Accenture, this year launched its first accelerator programme that saw 11 fintech firms out of over 200 applicants being accepted into DIFC's mentorship. That programme gives fintech companies with a proven track record advice and makes connections for them with financial service firms looking for technological solutions to bring about greater operational nimbleness. It also helps them find investors.
“RegTech [a subset of fintech pertaining to interaction between businesses and financial regulators] is becoming more and more important - this is a new frontier in our bilateral cooperation that will benefit both regulators and businesses,” John Price, the commissioner of ASIC said.
The DFSA launched the first tailored regime for loan and investment crowdfunding platforms in the GCC in August after rolling out earlier in the year its Innovation Testing Licence, a special class of financial services licence that allows fintech firms to develop and test innovative concepts in or from the DIFC.
