Tag:Dubai Financial Services Authority

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Islamic Finance News Europe Forum 2017
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Dubai issues loan-based crowdfunding consultation paper

Islamic Finance News Europe Forum 2017

By Jonathan Lawrence

The Islamic Finance News Europe Forum 2017 took place in London on 11 September. The Forum gave several insights into the Islamic FinTech regulatory space.

Ian Johnson, the Chief Executive of the Dubai Financial Services Authority (DFSA) (the regulator of the Dubai International Finance Centre (DIFC)) spoke at the Forum about his organisation’s approach to regulating the FinTech space. He said that regulators are engaging strongly in the sector, often at the behest of their national governments who are leading the charge as a policy matter. The regulator’s job was to allow innovation whilst maintaining systemic and investor protection.

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Dubai issues loan-based crowdfunding consultation paper

By Jonathan Lawrence

The Dubai Financial Services Authority (DFSA) issued a consultation paper “Crowdfunding: SME Financing Though Lending” on 31 January 2017. The paper proposes a regulatory framework for anyone looking to operate a loan-based crowdfunding platform in the Dubai International Financial Centre (DIFC). It is the first in a series of papers which will set out the DFSA’s approach to the regulation of FinTech more generally.

The key proposals include:

  • A tailored regime of rules specifically designed for loan-based crowdfunding platform operators.
  • Minimum standards for systems and controls.
  • Operational transparency and adequate disclosure to all participants – borrowers and lenders – on the platform.
  • Suitable checks on platform participants.
  • Appropriate safeguarding and segregation of client money.
  • The development of business cessation plans.
  • Enabling the transfer of rights or obligations between lenders.

The rules are benchmarked against the regimes in the United Kingdom, New Zealand, France, Netherlands and Spain, being those jurisdictions that create an individual regime for these types of platforms.

The DFSA is seeking comments from anyone who is interested in operating, investing in, or providing services to crowdfunding platforms in the DIFC. This can be done via email consultation@dfsa.ae with “CP109″ in the subject line.  Comments should be submitted by 2 March 2017.

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