The Securities and Commodities Authority, the Dubai Financial Services Authority (the regulator of the Dubai International Financial Centre) and the Financial Services Regulatory Authority of the Abu Dhabi Global Market have reached agreement about how best to facilitate the licensing of domestic funds by each authority for the purposes of their promotion throughout the United Arab Emirates.

The three regulators signed the agreement in Dubai. The signatories were Dr Obaid Al Zaabi, the CEO of the SCA, Bryan Stirewalt, the CEO of the DFSA, and Richard Teng, the CEO of the FSRA. The idea is to foster good relations between them and to facilitate the licensing and promotion of investment funds to attract foreign investment. It will also, they hope, pave the way for savings to be directed towards new financial instruments such as investment funds and activate a number of financial services and activities related to investment funds such as custodial services, investment management, and promotions, as well as the management of investment funds.

The agreement begins a new era of "passporting mutual recognition" as a regulatory mechanism for the promotion and supervision of investment funds and is designed to encourage foreign licensed firms in the financial free zones of other countries to move to the UAE. It contributes to the realisation of one of the main objectives of the SCA, and that is to provide the appropriate environment for the investment of savings and funds in securities in line with the objectives of the country’s economic development.

The SCA, DFSA, and FSRA agreed to apply the same laws in their respective jurisdictions, which ought to help them co-ordinate their efforts in licensing domestic funds once the legislation takes effect. Under the terms of the agreement, each regulator will set up a notification and registration facility to facilitate the promotion and sale of domestic funds to potential investors situated anywhere in the UAE, under a single licence in each case.

The DFSA and FSRA will shortly begin to consultat interested parties about the shape of the new regime.

The SCA regulates the capital markets operating in the UAE, with the exception of financial free zones; the DFSA is the regulator of financial services conducted in or from the DIFC; and the FSRA is the regulator for financial services in or from the ADGM.