{"id":103961,"date":"2025-05-23T00:00:00","date_gmt":"2025-05-23T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/dfsa-amends-capital-rules-for-difc-firms\/"},"modified":"2025-05-23T00:00:00","modified_gmt":"2025-05-23T00:00:00","slug":"dfsa-amends-capital-rules-for-difc-firms","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/05\/23\/dfsa-amends-capital-rules-for-difc-firms\/","title":{"rendered":"DFSA amends capital rules for DIFC firms"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong> The Dubai Financial Services Authority (DFSA) has finalized amen<\/strong><strong>dments to its <\/strong><strong>prudential regime for Category 3 firms<\/strong> \u2014 including asset managers, fund managers, and advisory firms operating in the Dubai International Financial Center (DIFC). The changes, published in the final <a target=\"_blank\" href=\"https:\/\/ent.news\/2025\/5\/1918.pdf\" style=\"\" rel=\"noopener\">feedback statement (pdf)<\/a> and <a target=\"_blank\" href=\"https:\/\/ent.news\/2025\/5\/1917.pdf\" style=\"\" rel=\"noopener\">Appendix 3 PIB amendments (pdf)<\/a>, aim to align Dubai\u2019s regulatory regime more closely with UK and EU standards.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>REFRESHER- <\/strong>The DFSA first proposed the reforms in <a target=\"_blank\" href=\"https:\/\/enterprise.news\/uae\/en\/news\/story\/91913829-54a5-42de-9557-db655a572770\/this-morning:-more-tech-ipos-in-the-next-18-months%3F-%2B-dubai-holding-mulls-setting-up-an-reit--report\" style=\"\" rel=\"noopener\">October 2024<\/a>, closing its consultation in January 2025. Further clarification came <a target=\"_blank\" href=\"https:\/\/enterprise.news\/uae\/en\/news\/story\/c0917dce-e0b3-47e5-a64f-aa9bdce9b850\/dfsa-moves-to-slash%253cmark%253e-base-capital%253c%2Fmark%253e-requirements-for-fund-managers\" style=\"\" rel=\"noopener\">in March<\/a>, with the proposals including:<\/p>\n<ul>\n<li>Introducing an <strong>activity-based capital requirement<\/strong> (ABCR) to replace fixed thresholds;<\/li>\n<li><strong>Exempting firms without client assets from the expenditure-based capital minimum<\/strong> (EBCM);<\/li>\n<li><strong>Removing pre-approval requirements for senior hires<\/strong> such as compliance and finance officers, with vetting responsibilities shifting to firms.<\/li>\n<\/ul>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The DFSA adopted the bulk of its proposals<\/strong>, with only minor revisions based on market feedback. The details:<\/p>\n<ul>\n<li><strong>Base capital thresholds<\/strong> will now reflect the <strong>highest-risk licensed activity<\/strong> a firm is authorized for. For instance, a firm licensed for both fund and investment management must meet the higher USD 140k threshold \u2014 a substantial reduction from the previous flat USD 230k requirement, and down from USD 500k prior to 2023.<\/li>\n<li><strong>Wind-down capital <\/strong>requirements remain for firms that do hold client assets, but the DFSA has<strong> broadened the definition of eligible liquid assets <\/strong>to include<strong> high-quality sovereign bonds<\/strong> denominated in <strong>GBP <\/strong>and<strong> EUR, as well as USD and AED<\/strong>, with a cap of<strong> two-thirds <\/strong>of the liquidity buffer.<\/li>\n<\/ul>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>What didn\u2019t make it into the final rulebook: <\/strong>The DFSA had also floated lowering the wind-down capital buffer from 35% to 25% of fixed annual overheads, but this adjustment was not included in the final amendments. We also could not find mentions of the removal of pre-approval requirements for senior hires like compliance and finance officers. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The reforms take effect on 1 July 2025<\/strong>, with a phased transition period running until 1 July 2026. Clarifications will be issued around how capital and liquidity buffers should be managed during the transition period.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The DFSA first proposed the reforms in October 2024<\/p>\n","protected":false},"author":1,"featured_media":103962,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1561],"tags":[745,2327,7,160],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-103961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-regulation-watch","tag-dubai-financial-services-authority","tag-dubai-international-financial-centre","tag-enterpriseam-uae","tag-regulation-watch","wpautop","entry"],"acf":{"mongo_id":"99261f45-0945-4985-b80d-1ec2cd3c8d56","order":"6","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/3\/897.jpg","photo_position":"above","homepage_title":"","full_issue_title":"DFSA finalizes capital rule overhaul for DIFC asset managers","related_issue":[103951],"teaser":"The DFSA first proposed the reforms in October 2024","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/5\/.28a5cc09-16df-4d56-8e0c-1b158198bdd9.mp3"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - 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