DFSA amends rules on compliance requirements

DUBAI — The Dubai Financial Services Authority (DFSA), the exclusive regulator of Dubai International Financial Centre (DIFC) yesterday announced an amendment to the rules which apply to sponsors of reporting entities who have listed securities on the Dubai International Financial Exchange (DIFX).

By Babu Das Augustine (Assistant Editor)

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Published: Thu 22 Jun 2006, 11:21 AM

Last updated: Sat 4 Apr 2015, 3:25 PM

According to the new amendment, DFSA now has the discretion to ask any reporting entity that has listed securities on DIFX to appoint a compliance adviser to assist it with obligations under the DIFC Markets Law and Offered Securities Rules (OFS).

One of the primary obligations of a reporting entity is the requirement to continuously disclose price sensitive information to the market in a timely manner.

The DFSA has issued a policy statement that explain the obligations of compliance advisers and sponsors. The requirement for the appointment of a compliance adviser is designed to ensure that a reporting entity is aware of and complies with its continuing obligations under the Markets Law 2004.

The policy statement specifies that a compliance adviser should be a person familiar with the requirements of the Markets Laws and should have the necessary knowledge, experience, qualifications and resources to assist a Reporting Entity to comply with its regulatory obligations.

The DFSA’s 'Policy Statement 2/2006 Compliance Advisers' describes in detail the purpose of a compliance adviser and the circumstances in which DFSA is likely to require a reporting entity to appoint a compliance adviser. It also describes how a compliance adviser can assist a reporting entity to meet its obligations in Markets Law 2004.

The relationship between the reporting entity and compliance adviser is a contractual one similar to one with any other professional adviser. According to DFSA's policy statement, the compliance adviser's role is merely to advise and assist the reporting entity to comply with its continuing regulatory responsibilities.

“A reporting entity does not, and cannot, avoid or diminish its regulatory obligations simply because it is required to have a compliance adviser. The responsibility for the reporting entity to comply with its continuing regulatory obligations remains the sole regulatory responsibility of the Reporting Entity,” says DFSA's policy statement.

The circumstances under which DFSA might ask a reporting entity to appoint a compliance adviser may vary.

“While it is difficult to predict all of the scenarios in which the DFSA would conclude that it is advisable to require a reporting entity to appoint a compliance adviser, the DFSA anticipates scenarios such as, there is a reasonable expectation that the proposed compliance adviser will be able to assist the reporting entity to meet its continuing obligations; or the reporting entity may have difficulty on its own to carry out its continuing regulatory obligations.

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