Who are the Dubai Financial Services Authority?
The Dubai Financial Services Authority (DFSA) is the regulator of the financial markets in the special economic zone of the Dubai International Financial Centre (DIFC).
The Securities and Commodities Authority has regulatory power for the majority of the UAE, and so the DFSA is free to concentrate solely on protecting the interests of investors within the DIFC.
Established in 2004 at the formation of the DIFC, the DFSA has a wide range of powers in its recognised jurisdiction list, and is responsible for monitoring the activities of a wide range of entities within the sector, including commodities and equities exchanges, futures traders, investment funds, banking service providers, asset managers, and many more.
As well as regulating those entities, the DFSA has the stated aim of introducing anti-money laundering legislation, as well as counter-terrorist funding, as outlined by the DIFC.
Regulatory areas and powers
To operate in the DIFC, financial operators must have obtained a licence from the DFSA. This is one of its key regulatory powers, as it can accept or decline applications for licences and remove licences from those operating in a non-ethical way.
In addition, firms that wish to provide ‘ancillary services’ in the financial sector may not need to obtain a licence, but they must still register themselves with the DFSA, which will conduct a thorough investigation before accepting registrations and continually monitor the levels of service being provided.
To maintain these high standards, the DFSA demands that licensed and registered firms and individuals comply with its rules and regulations and fulfil its reporting obligations, and when they do not, the DFSA has a range of enforcement penalties that it can utilise. It will investigate members thought to be non-compliant, and has the power to search premises and obtain financial records and other information, while individuals under investigation can be interviewed under oath. Fines and other actions can be meted out.
The DFSA also uses the statutes of DIFC Companies Law to investigate investment firms and brokers operating outside its parameters, and can recommend a variety of enforcement action to the authorities. While the DFSA cannot enforce disciplinary action in a criminal sense, it can refer breaches to the relevant authorities within the DIFC.
How to check if a broker is regulated by the Dubai Financial Services Authority
It’s very straightforward to check whether a broker is regulated by the DFSA. It has published two registers on its website – one for companies and one for individuals – of organisations that are licensed and/or registered to operate within the DIFC.
Another interesting page for potential customers and investors can be found at https://www.dfsa.ae/en/What-We-Do/Enforcement#Regulatory-Actions. This details the latest cases of enforcement action that the DFSA has embarked upon, and there is also a search function so that the archives can be checked to see whether a broker or an investment firm has been investigated in the past.
Making a complaint
The DFSA takes its role very seriously and will investigate any complaints made by members of the public.
It wants to hear from customers who believe that a firm is contravening the laws set out by the legislation within the DIFC, where they are dissatisfied with the levels of service offered, or where they want to escalate a complaint (perhaps the broker hasn’t replied to them satisfactorily).
A customer can complain about brokers and firms that use their invested funds unwisely, or that fail to deliver on specified written agreements. Head to the page at https://www.dfsa.ae/Consumer/consumer#Complaints, scroll to the bottom, and complete the linked complaints form. This can be submitted electronically or via mail to the DFSA’s postal address.