DSFA'S LEGAL FRAMEWORK
Legislation
Primary Legislation which applies in the DIFC, other than Federal or Dubai Laws, consists of DIFC Laws administered by either the DFSA or the DIFCA (DIFCA administered Laws). Such Laws are enacted by the Ruler of Dubai and apply only in the DIFC.
The Laws administered by the DFSA are the core laws relating to financial services, which are as follows:
- Regulatory Law 2004
- Markets Law 2012
- Law Regulating Islamic Financial Business 2004
- Collective Investment Law 2010
- Investment Trust Law 2006
These Laws can be viewed under Administered Laws.
The Registrar of Companies has delegated to the DFSA enforcement powers and functions under the following DIFC Laws:
- Companies Law 2018
- Limited Partnership Law 2006
- Limited Liability Partnership Law 2004
- Insolvency Law 2019
- General Partnership Law 2004
This instrument of delegation can be viewed under Instrument of Delegation.
DFSA RULES
A Rule is subsidiary legislation made under the Regulatory Law 2004 by the Board of Directors of the DFSA for the purposes of that, or any other, Law administered by the DFSA.
The Rulebook is made up of modules arranged by topic area, which specify their scope and the audience to whom they apply. These can be accessed under DFSA Rules.
The Rulebook also contains additional commentary as ‘Guidance’, which is designed to assist DIFC participants in complying with the relevant Laws and Rules. Guidance is indicative and non-binding, and does not provide a ‘safe-harbour’ to protect those who comply with it from action for breach of an underlying Rule.
Certain other matters that are not Rules, such as application forms, prudential returns and associated guidance in the form of instructional guidelines are contained in the DFSA Sourcebook Modules, which are also made up of modules arranged by topic area.
Note: The definitive version of the DFSA Rulebook text at any particular time is the version contained in the actual instruments (including amending instruments) made by the DFSA and published on the DFSA website. For all modules of Rules this will be the most recent relevant instrument setting out the entire consolidated module. The PDF of these published instruments can be accessed under the links for Rule-making instruments and Guidance-making instruments.
AMENDMENTS TO LEGISLATION
All the amendments that have been made to legislation administered by the DFSA since the first laws and rules came into force in September 2004 can be found under "Amendments to Legislation" by following the link above.
The DFSA exercises its rule-making power under Article 23 of the Regulatory Law 2004, in writing, in a document called a "Rule-making Instrument”. Prior to April 2011 the "Rule-making Instruments" set out the amendments made to the rules. As from April 2011 the rule-making instruments do not contain this detail but simply repeal and replace an entire module of rules with an updated, consolidated version. To ascertain what changes were made to a particular module of rules, reference must be made to the sub-section of Amendments to Legislation entitled Notice of Amendments to Legislation.
Amendments made to laws administered by the DFSA are to be found under the sub-section of Amendments to Legislation entitled "Amendment Laws".
Guidance may also be issued separately by instrument and can be accessed under the sub-section of Amendments to Legislation entitled "Guidance-making Instruments".
Amendments made to legislation are shown by way of striking through text to be deleted and underlining new text, unless otherwise stated.
DFSA CODES OF PRACTICE
Guidance in the form of a code of practice which has not been incorporated into the Rules may be issued by the DFSA Board of Directors.
WAIVERS AND MODIFICATION NOTICES
When the DFSA grants a Person relief from the effect of Rules pursuant to Article 25 of the Regulatory Law 2004, it issues a written notice to that effect. Such a notice may be issued subject to conditions and unless the DFSA is satisfied that it is inappropriate or unnecessary to do so, the DFSA will publish the notice in such a way as it considers appropriate for bringing the notice to the attention of:
(a) those likely to be affected by it
(b) others who may be likely to become subject to a similar notice.
DFSA FORMS
Please refer to the DFSA Prudential Returns Module and the Application Forms and Notices Module which are located under DFSA Forms. Some forms are only accessible by logging in to the DFSA ePortal and details on how to register for access to the DFSA ePortal are also located under DFSA Forms.
Public Consultation
We initiate policy proposals from sources such as feedback from DIFC firms, the European Union or international standard setters such as IOSCO, FATF, IAIS and the Basel Committee on Banking Supervision. We are required by law to consult the public for at least 30 days on any proposed legislation, unless any delay would be prejudicial to the interests of the DIFC.
We publish our Consultation Papers on our website and invite comments from the public. A Consultation Paper includes a summary of the draft legislation and the purpose for making these legislations. After evaluating the public’s comments and consulting with the Dubai Government (the Supreme Legislation Committee) and DIFCA, the DFSA Board of Directors approves the legislation.
Draft LawsWhen the legislation is a law, the DFSA Board of Directors may recommend the approved draft to H.H. the DIFC President so that he may submit it to H.H. the Ruler for his consideration and, if approved, enactment.
Draft RulesWhen the legislation is a Rule or a Code, the DFSA Board of Directors has the power to make and issue these.
Publication of Consultation PapersWe publish all past and current Consultation Papers on our website.
Call For Evidence
DFSA’s call for evidence is an information-gathering exercise in which we invite all interested parties, especially individuals, organisations and stakeholders with knowledge of a particular issue, to provide feedback and evidence on various aspects such as benefits, effects, impact, evaluations on public interest, and any other relevant responses, to issues that we are considering.
The call for evidence will form part of the resources the DFSA uses to inform itself in its policymaking work relating to financial services conducted in or from the DIFC and related matters.
The call for evidence is part of DFSA’s gathering of views and information to inform our policymaking work. Responses may also be utilised to inform our work in carrying out post-implementation reviews to gauge the effectiveness and adequacy of our rules.
OTHER LEGAL FRAMEWORK
POLICY STATEMENTS
We issue Policy Statements when we need to explain:
- The exercise of specific powers under our legislations.
- How we interpret certain provisions of the legislations we administer.
- The reasons behind our approach to certain matters or issues..
Notice of Amendments to Legislation July 2023
Following the ending of the consultation period on a number of proposed legislative changes that were set out in Consultation Papers No. 147 and 150 the DFSA Board, after due consideration of consultees’ comments, made amendments to the DFSA Rulebook as described below. Please bear in mind that changes may have been made to the legislation originally proposed in the relevant consultation paper.
- You can read the Notice of Amendements to Legislation Here
Article 121 of the UAE Constitution enabled the Federation to create Financial Free Zones in the Emirates, and most importantly, to exclude the application of certain Federal laws in these Financial Free Zones. A number of laws created the DIFC and the necessary centre bodies, which include the DFSA. These laws set out the objectives, powers and functions of the centre bodies. They also contain important exemptions and prohibitions in the DIFC.
Federal Law No. 8 of 2004 ( English)
Federal Law No. 8 of 2004 on “The Financial Free Zones in the United Arab Emirates” (the Financial Free Zone Law) mainly:
- Allow the creation of a Financial Free Zone in any Emirate of the UAE, by a Federal Decree.
- Exempts the Financial Free Zones and the Financial Activities from all Federal civil and commercial laws.
- Confirms the application of Federal criminal laws in the Financial Free Zones, including the Federal Laws on Anti-Money Laundering.
- Prohibits DIFC authorised firms from dealing in “deposit taking from the State’s markets and in the UAE Dirham”
- Restricts DIFC authorised insurers’ dealings in the State to carrying out re-insurance activities.
This means that the DIFC would mostly have its own regulatory and legal framework.
Federal Decree No. 35 of 2004 ( English)
Federal Decree No. 35 of 2004 created the DIFC as a Financial Free Zone in Dubai (the DIFC Law). The Federal Cabinet also made two Cabinet Resolutions that:
- Set out the geographic boundaries of the DIFC
- Allow the centre bodies and authorised firms to operate outside the DIFC for the first four years because the DIFC was still under construction
Dubai Law No. 9 of 2004 ( English)
Dubai Law No. 9 of 2004 on “The Establishment of the Dubai International Financial Centre” acknowledges the creation of the DIFC and:
- Recognises the financial and administrative independence of the DIFC
- Creates the DIFC centre bodies, which include the DFSA
- Exempts the DIFC from Dubai laws and regulations, under certain conditions.
DIFC Law No. 1 of 2004 ( English)
DIFC Law No. 1 of 2004 or the “Regulatory Law 2004” is the cornerstone of the DFSA’s regulatory powers, functions and objectives:
- Gives the DFSA the power to make Rules
- Sets out the powers and functions of the Board and the Chief Executive
- Establishes the Financial Markets Tribunal
- Sets out the criteria and process for authorising firms and individuals
- Sets out the powers for supervising and investigating Persons as well as the enforcement of DFSA-administered legislations
- Gives the DFSA the power to impose restrictions, suspensions and sanctions, including financial penalties
- Sets out various disclosure requirements to the DFSA
- Sets out the decision making process that the DFSA must follow to issue certain types of decisions
Cabinet Resolution No. 28 of 2007 ( English / Arabic)
Cabinet Resolution No. 28 of 2007 on “Implementing Federal Law No. 8 of of 2004 on Financial Free Zones” further detailed certain provisions of the Financial Free Zones Law.
The law establishing the DIFC Court can be found here
A database of DIFC laws can be found here