A Member Firm of Andersen Global
IMC Group Companies
Forum - Q&A
DIFC provides a comprehensive legal framework including secure and easy access to an online register of all companies incorporated in the centre.
DIFC was founded as per the Federal Decree No. 35 of 2004 of UAE to strategically cater to the vision of Dubai to diversify its economy and attract Foreign Direct Investment (FDI) in the region. It is an independent jurisdiction within the UAE DIFC and can create its regulatory framework for all civil and commercial matters.
Following Dubai Law No. 9 of 2004, three independent establishments have been set up in DIFC to support the development and growth of businesses in the Centre namely, the DIFC Authority, the Dubai Financial Services Authority (DFSA) and the DIFC Courts.
DIFC financial services firms are regulated by DFSA that authorizes and monitors the financial entities carrying out specialized business activities across the five licensed categories and makes some crucial functions mandatory for all firms performing financial services in the region including the Compliance function.
DIFC promotes a company-wide culture of compliance with a top-down approach and through education, training and seminars. DFSA too enforces many rules, regulations and sanctions for ensuring compliance about conducting business, investments and data protection. On-site Audits and verification are frequently carried out by the DFSA and any non-compliance found can be severe and may result in hefty fines and even closure of businesses at times. Any non-compliance can be very damaging for the name and brand of the business as well.
Robust and sound compliance systems and processes become the fundamental building block of a successful business in the DIFC as it enhances operational effectiveness and increased revenue generation for a company.
During application to the DFSA, all financial firms must appoint a Compliance Officer and a Money Laundering Reporting Officer (CO/MLRO). As these two functions are generally interlinked, smaller firms are allowed for appointing one individual for performing these two functions simultaneously. There is, however, an implied requirement of DFSA that the individual responsible for ensuring compliance and reporting money laundering must have adequate and proven knowledge and experience for effectively discharging his duties. It is also desirable that the compliance executive once licensed, be a resident of the country.
Outsourcing of Compliance and MLRO functions including and Finance and Accounting are permitted by DFSA for financial firms in the DIFC. However, before issuance of such approval, the DFSA takes into consideration the financial services types and projected revenues including the ability of such firms to serve the retail customers. The organisational structure of such firms and top management teams are also reviewed before issuing approval for outsourced compliance services.
Investment advisory Category 4 firms with Restricted functional responsibility usually get this approval relatively easily and by way of a simple process. However, for financial firms with increased functional responsibility such as DIFC Fund Management companies and Brokerage houses, outsourcing is normally not an ideal option. Instead, compliance support services are recommended for such firms.
There may be times when a firm needs to run its operation in the absence of an in-house compliance officer who is on leave as it is not viable to put an assistant compliance officer to look after such tasks during this time, especially for smaller firms and startups.
DIFC compliance services outsourcing, however, guarantees that firms are covered through the entire year with uninterrupted services.
The other benefit offered by DIFC compliance services outsourcing is that no investment is required in technology, infrastructure, tools, training and personnel development usually needed for an in-house setup.
During the application process for DIFC company formation, the DFSA makes it mandatory for financial firms to identify and propose individuals who would be responsible for ensuring compliance and reporting money laundering. Yet to be engaged as external service providers, these Compliance and MLRO executives normally join the prospective firms on obtaining authorizations.
As the authorization process is generally lengthy and at times spans over four to five months, DFSA allows firms to carry out in-principle identification of such outsourced service providers at the time of application.
The easiest way however is to straightway appoint the externally outsourced compliance officer who is already authorized by DFSA for making the authorization process faster.
We, at IMC, can offer your DIFC firm a comprehensive compliance services package at a competitive price and can assume total responsibilities for implementing a sound and robust compliance system equivalent to international standards.
We can work with you hand in hand and develop your compliance system and documentation including an application submission complete in all respects for easy and fast authorization. We critically review your business functions and operational processes for designing the compliance system most appropriate for your regulatory compliance and risk management.
We appreciate your interest in IMC and are eager to address your needs.
To ensure we address your needs accurately and promptly, please fill out this form. This will help us in identifying and connecting you with the appropriate team of experts in our organization.
We take pride in our responsiveness and aim to get back to you within a span of 1-2 business days. Your journey towards solutions starts here.
© 2023 IMC Group. All Rights Reserved.