Dubai reduces regulation for fintech firms with new licence

Dubai’s Financial Services Authority (DFSA) has announced the launch of a new financial services licence for fintech firms.

The Innovation Testing Licence will allow qualifying companies to test new concepts within Dubai International Financial Centre without being subject to the same regulatory requirements as normal firms.

Instead the authority will establish the appropriate controls on a case-by-case basis.

“Our efforts to develop a regulatory framework that promotes growth and innovation, while protecting financial stability and consumers, is part of our contribution to Dubai’s greater vision of becoming an information-based society and a smart city,” said DFSA CEO Ian Johnston.

Fintech firms will be able to use the licence to test a product or service for six to 12 months, with an extension beyond this period granted in exceptional cases.

If a firm meets the requirements detailed in the test plan and it can meet DFSA’s full requirements it will then migrate to full authorisation. If not it will be forced to cease activities in DIFC that need regulation.

DIFC has announced a number of regulatory changes in recent months in an attempt to lure more business.

Read: DIFC-registered non-financial firms can now also operate in Dubai mainland

The free zone also launched a new fintech accelerator in January to provide mentorship to start-ups and entrepreneurs.

Read: DIFC, Accenture launch new fintech accelerator in Dubai