The controversial Dubai International Financial Centre is set to open for business in mid-September. Following the abrupt departure in June of the two most senior regulators of the Dubai Financial Services Authority, the DIFC’s regulatory body, the project secured the personal involvement of Dubai Crown Prince Sheikh Mohammed bin Rashid al-Maktoum and is now proceeding at speed.
Speaking to The Banker in London in early August, the DFSA’s acting chief executive David King explained that after receiving Federal approval in July, all that was needed was the formal Dubai decree and a signed memorandum of understanding with the UAE Central Bank and the DIFC could open. The DIFC’s objective is to create a regional capital market offering investors and issuers of capital world-class regulations and standards. Mr King expects at least six institutions to open on day one but believes 40 to 50 more of the best-known financial names will follow as the facilities develop. A stock exchange able to trade in a wide variety of international and regional instruments is expected to open in the second quarter of 2005. In early August, it was announced that Merrill Lynch Bank (Suisse) had expressed an interest in submitting an application. “Merrill Lynch has enjoyed a presence in the UAE for over 30 years and we are pleased to confirm our interest in the DIFC,” said Bruno Daher, managing director of Merrill Lynch’s global private client division. Other institutions understood to be interested in joining the DIFC include Credit Suisse and Standard Chartered Bank. While the departure of chief regulators Ian Hay Davison and Philip Thorpe in June (The Banker, August,GCC supplement) did raise concerns over the independence of the DFSA in international circles, the incident has also helped to clarify the situation. Through agreement with Sheikh Mohammed in August, clear legal independence does now exist and it has also been noted that if such independence had been in place before the incident the departure would not have taken place. Robert Owen, a member of the DFSA Regulatory Council and an experienced regulator in Hong Kong, explained to The Banker: “The Council fully recognises the importance of international perceptions concerning the independence of the authority of the DFSA as the regulator of the DIFC and we have now received categoric assurances in the most unambiguous terms that the DFSA’s independence is the cornerstone of the centre.”
