From the DFSA:

The DFSA proposes to make significant enhancements to the DIFC’s Collective Investment Funds regime to better align it with international trends and practices, thereby making it more attractive to both fund managers and participants in the funds industry. The Funds Regime is mainly contained in the Collective Investment Law 2006 and the Collective Investment Rules module of the DFSA Rulebook. Other modules of the DFSA Rulebook are also relevant, for example, the IFR module, which contains the Rules relating to Islamic Funds and the FER module, which contains Rules relating to fees applicable to Funds.

In June 2009, the DFSA established the Funds Regime by a Market Practitioner Panel, which comprised members with industry-wide expertise relating to the managed funds industry. The remit of the Panel was to review the DFSA’s Funds Regime and present to the DFSA recommendations that would better promote the growth of the Funds industry in the DIFC, while remaining fully compliant with the relevant principles of the International Organization of Securities Commissions (IOSCO).

The Panel presented its Report to the DFSA on 30 September 2009. It contains wide-ranging recommendations arranged under 10 issues. While the Panel found our Funds Regime fit for purpose, these recommendations suggest significant enhancements to that regime, to make it more usable by fund managers and industry practitioners.

The DFSA published the Panel Report on 19 October 2009, seeking public comments on the Panel recommendations. The period for public comment closed on 4 December and we received 4 sets of comments. While most of those comments were strongly supportive of the Panel recommendations, there were some differing views as to the nature of improvements that could be made to the Funds Regime. We have taken into account those comments in formulating the proposals in this consultation paper.

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The Dubai Financial Services Authority announced remedial action and enforcement sanctions against Damas International Limited, a multinational luxury goods retailer, and its Board of Directors for their failure to exercise appropriate corporate governance over the company and its subsidiaries.

The remedial action includes the resignation of the Damas Board, the appointment of a new Board to govern Damas, and measures to enhance the governance, systems and controls of Damas so as to protect the company, its assets and shareholders’ interests.  Damas has also agreed to the appointment of new auditors for the fiscal year commencing 1 April 2010.

The sanctions include financial penalties against Damas, Tawhid, Tawfique and Tamjid Abdullah, and voluntary bans, for periods up to 10 years, on the Abdullah Brothers from acting as Directors of Damas or any company in the Dubai International Financial Centre.

Today’s announcement follows an investigation by the DFSA into “unauthorised transactions” that were announced to the market by Damas on 15 October 2009.

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The CFTC is requesting public comment on a petition submitted by the Clearing House Division of the Chicago Mercantile Exchange and the New York Mercantile Exchange to amend an existing order in connection with contracts traded on the Dubai Mercantile Exchange.

In April 2008, the Commission issued an order under Section 4d of the Commodity Exchange Act permitting NYMEX and clearing member futures commission merchants to hold customer positions and associated funds held in connection with NYMEX’s clearing of specific futures contracts traded on or subject to the rules of the DME with other funds held in the segregated account. CME Clearing and NYMEX wish to amend the order to include four new financially-settled option and swap futures contracts that will be listed for trading on or subject to the rules of DME and cleared by NYMEX through CME Clearing.

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The Dubai Financial Services Authority entered into a Memorandum of Understanding with the Autorité des marchés financiers of France (AMF), the French securities regulator.

The signing took place between Mr Paul Koster, Chief Executive of the DFSA, and M Jean-Pierre Jouyet, Chairman of the AMF.

The AMF is France’s independent public body responsible for safeguarding investments in financial instruments and in all other savings and investment vehicles; for ensuring that investors receive material information; and for maintaining orderly financial markets. The AMF also lends its support to financial market regulation at European and International levels.

The Chief Executive of the DFSA, Mr Paul Koster said: “The Autorité des marchés financiers has been a valued member of the International Organisation of Securities Commissions (IOSCO) and an active participant in the work of the Committee of European Securities Regulators (CESR), adopting and harmonising international standards in Europe and continuing to establish world-class standards in the regulation of capital markets. As such, this MoU is a significant initiative, recognising the importance of these arrangements for co-operation and information sharing between the two regulators.”

Both the AMF and the DFSA are signatories to the IOSCO multi-lateral MoU, having satisfied the highest standards of co-operation and assistance among IOSCO members.  It is enhanced by today’s bi-lateral agreement which reflects each agency’s responsibilities in the regulation of securities.

This initiative reflects France’s continuing commitment to the UAE, as the AMF already enjoys a significant and warm relationship with our federal counterpart, the Emirates’ Securities and Commodities Authority (SCA), having signed a bi-lateral MoU in April 2009. Reflecting its status as an integrated regulator, the DFSA also has an MoU with Commission Bancaire, France’s banking supervisor, signed in August 2008.

“As a result of this signing, the DFSA now has a bi-lateral and multi-lateral MoU network with 90 regulators across the globe, which underlines the importance of effective co-ordination and co-operation”, Mr Koster said.

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The DFSA proposes changes to the corporate governance framework applicable to Reporting Entities in the DIFC. This framework needs to recognise that such Reporting Entities may be incorporated outside the DIFC and be subject to the requirements in their home jurisdiction, in addition to the requirements operating here. The proposed changes are part of a wider review of the DFSA Offered Securities Rules (“OSR”) currently in progress (which includes corporate governance rules). The framework for corporate governance, however, has been treated as a discrete subject in respect of which some clarificatory amendments are now proposed. In due course a consultation paper setting out additional changes to the OSR will be published. Although reform of the rules relating to the governance of entities is a current topic for debate due to recent events in the global economy, DFSA is not proposing, in the changes in this Consultation Paper, to set out bold new standards for conduct nor to pioneer extensive or prescriptive “black letter” obligations to address deficiencies identified in other markets. Such new standards or obligations, in the event they are enacted, will be reviewed in due course for relevance to the DIFC.

This Consultation Paper details proposed changes to the Markets Law 2004 and the Offered Securities Rules.

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Following the ending of the consultation period on a number of proposed legislative changes, set out in Consultation Paper 66, the Board, after due consideration of consultees comments, approved the final version of amendments to the Rulebook as described below.

RM69/2010 Restructuring the DFSA’s Islamic Finance Rules  - Rules Instrument (No. 69) 2010

Amendments to Rulebook Module

(1) Authorized Market Institutions (AMI) — AMI/VER8/01-09 is amended in accordance with Appendix 1 to this instrument and the module as amended by this instrument may be identified by the following reference — AMI/VER9/03-10.

(2) Collective Investment Rules (CIR) — CIR/VER11/01-10 is amended in accordance with Appendix 2 to this instrument and the module as amended by this instrument may be identified by the following reference — CIR/VER12/03-10.

(3) Conduct of Business Module (COB) — COB/VER17/01-10 is amended in accordance with Appendix 3 to this instrument and the module as amended by this instrument may be identified by the following reference — COB/VER18/03-10.

(4) General Module (GEN) — GEN/VER24/01-10 is amended in accordance with Appendix 4 to this instrument and the module as amended by this instrument may be identified by the following reference — GEN/VER25/03-10.

(5) Prudential — Investment, Insurance Intermediation and Banking Module (PIB) — PIB/VER15/01-10 is amended in accordance with Appendix 5 to this instrument and the module as amended by this instrument may be identified by the following reference — PIB/VER16/03-10.

(6) Offered Securities Rules (OSR) — OSR/VER13/01-09 is amended in accordance with Appendix 6 to this instrument and the module as amended by this instrument may be identified by the following reference — OSR/VER14/03-10.

(7) Islamic Financial Business Module (ISF) — ISF/VER2/07-08 is discontinued and replaced by the Islamic Finance Rules (IFR). The replacement Module IFR contains all the provisions that were originally set out in ISF.

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The DFSA entered into a Memorandum of Understanding with the Qatar Financial Center Regulatory Authority.

The MoU was signed on behalf of the DFSA by Chief Executive, Mr Paul Koster, and Mr Phillip Thorpe, Chairman and Chief Executive Officer of the QFC Regulatory Authority, during the 4th GCC Regulators’ Summit, held in Doha.

Paul Koster, Chief Executive of the DFSA said, “The DFSA is keen to engage with its counterparts in the GCC and I am particularly pleased to be signing this MoU with Phillip Thorpe, a distinguished and experienced figure in the world of financial regulation.  I am also pleased that we now have a formal arrangement with the QFC Regulatory Authority, with whom we have much in common. Both authorities are integrated regulators of international centers striving to embrace best practice and seeking to reflect the resolutions of the international standard-setters.  This initiative should be seen as a mutual willingness to co-operate and share information to those standards.”

“In the past year, the importance of effective co-ordination and co-operation between regulators cannot be overstated. We are looking for better ways of working together to resolve problems and prevent their repetition. Agreements such as this will make a difference”, Mr Koster said.

Phillip Thorpe, Chairman and Chief Executive Officer of QFC Regulatory Authority welcomed the signing of the MoU saying, “As markets and regulatory jurisdictions are brought closer together in today’s evermore complex financial environment, it is increasingly important that regulators share information and working practices as a means of bolstering their effectiveness. This is especially important in neighbouring jurisdictions where cross-border activities are, therefore, more likely to occur and where regulators are, therefore, more likely to need to communicate.

“This move marks an important development for both regulators in light of our clear shared interests. I am delighted that we are able to sign this MoU with the DFSA and I anticipate that a closer relationship will significantly benefit both parties”.

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The Consultation Paper seeks public comments on the DFSA’s proposals to make changes to certain Rules in the Price Stabilization Module (PRS). The paper also sets out the proposed changes to the PRS. The proposals are aimed at updating the PRS and are the result of an internal review of Rules on Price Stabilization.

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The Islamic Financial Services Board (IFSB) is organizing its 5th Seminar on the Regulation of Takaful on 22nd and 23rd February 2010, at the Emirates Towers Hotel, in Dubai. The DFSA will be hosting the Seminar.

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Following the ending of the consultation period on a number of proposed legislative changes, set out in Consultation Paper 65, the Board, after due consideration of consultees comments, approved the final version of amendments to the Rulebook as described below.

The following rule-making instrument is to come into effect on 3 January 2010:

· DIFC REPRESENTATIVE OFFICE REGIME RULES INSTRUMENT (NO.68) 2009

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