The Dubai Financial Services Authority (DFSA) has issued a new FAQ (pdf) to help firms prepare for major changes to its client assets regime, which take effect on 1 January 2026, it said in a statement. The updated rules apply to all authorized firms in the Dubai International Financial Center that hold and/or arrange custody or have a client assets endorsement.

REFRESHER- The reforms follow a consultation paper (pdf) and feedback statement (pdf) published in March. They clarify that fund property — including crypto and investments held under delegated fund management — falls outside the scope of the regime. Firms that control but do not hold client assets face a narrower set of obligations under the revised framework.

New requirements for audits and crisis planning: Firms will need to maintain a client asset crisis preparedness pack, designed to support the swift return of assets in the event of insolvency or other disruptions. They’ll also be required to file separate audit reports for client money, client investments, and client crypto tokens, all due within four months of their financial year-end. A report on any non-compliance must be submitted within 30 days, with immediate notification required for breaches.

Due diligence rules sharpened: The FAQ confirms that monthly reconciliations of client assets remain mandatory and outlines strengthened due diligence expectations for third-party agents (TPA). Firms must assess a TPA’s creditworthiness, consider diversification of client money holdings, and disclose insolvency regime risks to clients.

Transition planning is urged: The DFSA is encouraging firms and auditors to conduct a gap analysis and implement a transition plan well ahead of the effective date. Firms with non-calendar financial years may face dual reporting requirements. Requests to remove the client assets endorsement, where eligible, can be submitted via the DFSA ePortal.

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