The Dubai Financial Services Authority (DFSA) first introduced its
Collective Investment Funds regime in 2006. The regime was designed to meet
international standards for regulation and, where required, to provide adequate
investor protection. It therefore provided a facilitative, business-friendly
regulatory framework, while remaining compliant with the International
Organisation of Securities Commission’s (IOSCO) principles for regulating
collective investment schemes.
Types of Funds
The DFSA Funds regime includes the
following types of funds:
Type of Fund
|
Public Funds
|
Exempt Funds
|
Qualified Investor Funds
|
Level of regulation
|
Detailed regulation in line with IOSCO standards
|
Somewhat less stringent than for Public Funds
|
Less stringent than for Exempt Funds
|
Investors and Offer
|
- Unitholders
include Retail Clients; or
- Has,
or intends to have, more than 100 unitholders; or
- Some
or all of its units are offered to investors by way of public offer.
|
- Only
Professional Clients;
- 100
or fewer unitholders; and
- Units
are offered to persons only by way of a Private Placement.
|
- Only
Professional Clients;
- 50
or fewer unitholders; and
- Units
are offered to persons only by way of a Private Placement.
|
Minimum subscription
|
N/A
|
USD 50,000
|
USD 500,000
|
Application process time
|
N/A
|
5 business days
|
2 business days
|
Regulatory changes
Recent changes have been made to the Funds Regime, with a view to making the DIFC a viable alternative to other established jurisdictions and as a fund domicile of choice for start-up Fund Managers.
As a result of this initiative, the DFSA adopted new regulations which came into force on 01 February 2017 and which resulted in a decrease in the Base Capital Requirements (‘BCR’) for Prudential Category 3C Authorised Firms who manage Collective Investment Funds, as follows:
DFSA Licence Category
|
Old BCR
|
Revised BCR
|
Managing
a Collective Investment Fund - Qualified Investor Funds (‘QIF’) and Exempt Funds
|
USD
500,000
|
USD
70,000
|
Managing
Collective Investment Fund - Public Funds
|
USD
500,000
|
USD
140,000
|
DFSA Licence Application Process
The DFSA applies a thorough but
simplified fast-track application process for Fund Managers seeking a licence
only in relation to QIFs. The DFSA aims to process a licence application within
a 4-6 week timetable, after which an In-Principle Licence will be issued,
setting out specific conditions which need to be met (office space in the DIFC,
bank account etc.) before a licence is issued and the Fund Manager can commence
business. This is expected to allow Fund Managers to start operations as soon
as 3 to 4 months from project initiation.
Fund Incorporation and Registration
The DIFC and DFSA have
streamlined procedures in relation to the incorporation and registration of Collective
Investment Funds. In relation to a QIF, both the DIFC Registrar of Companies
and the DFSA aim to process the incorporation and respectively the Fund
registration process within 2 working days.
DIFC Authority (‘DIFCA’) Fees
DIFCA has also proposed to reduce
its fees for start-up fund managers who are setting up funds in the DIFC as
follows:
Fee
Type
|
Reduction
|
Registrar of Companies Application Fee
|
100% reduction
(USD 8,000)
|
Commercial License Fee
|
100% reduction for 2 years
(USD 12,000/year)
|
Leasing of DIFCA owned real estate
(e.g. The Gate, Gate Village)
|
50% reduction for 2 years
|
How HOLT consultancy can assist
HOLT consultancy is a company incorporated in the DIFC and has a strong track record and reputation in the market. We have assisted a number of high profile financial groups as well as start-ups from the GCC, US, EU and Asia with obtaining their DFSA licence.
Please contact us if you
wish to know more about the DFSA Licence application process and how HOLT
consultancy can assist you. Please email us at info@holtconsultancy.com or call us on +971 4 386 6360.
