The UAE’s minister of economy has issued a decree adopting a regulatory framework for financial technology (fintech) firms conducting operations under experimental licences.
The decree, which comes into force after its publication in the Official Gazette, follows the introduction of similar licence concepts by financial free zones Dubai International Financial Centre and Abu Dhabi Global Market over the last year.
It will allow companies operating outside of these zones to conduct similar activities with less stringent regulation for a set period.
Sultan bin Saeed Al Mansouri, who is also chairman of the Securities and Commodities Authority, said the regulation was intended to promote an attractive environment for innovation and regulate risk.
“The experimental environment is defined as a pilot financial technology laboratory organised into a regulatory framework that allows entities to test innovative products, services, programs and business models in a simplified experimental control environment, within a limited and time-bound scope and timeframe,” state news agency WAM reported.
Under the plans, experimental licence holders in the form of emerging companies, existing companies and individual projcts, will be able to apply to be exempt from some regulatory requirements with appropriate safeguards for consumer protection.
A government commission will work with applicants to evaluate their projects and identify legal and regulatory requirements that can be mitigated or waived for a set period on a case-by-case basis.
If they are successful, they will then have six to 12 months to test the concept and show its impact on consumers and the financial sector.
This will then be reviewed by the commission.