Daily Personal Finance Insights – Regulating finance

Daily Personal Finance Insights – Regulating finance
10 March 2013

Regulating brokers and Independent Financial Advisors

Plans are being discussed for regulations governing broker and financial advisor fee disclosure in the UAE.  The regulations follow those implemented by the UK Financial Services Authority (FSA) and known as the Retail Distribution Review (RDR). This policy aids consumers by revealing ‘clearer charges:’ instead of being paid by commission, advisers will have to agree charges with you up front.

In a step towards clearer policy and regulation, Zurich International Life (ZIL) recently announced that it would only accept business from brokers in the UAE who are properly licensed and regulated here.

IMF calls for greater financial transparency in the region

The IMF Fiscal Affairs Department (FAD) has recently published a Paper on Fiscal Transparency, Accountability, and Risk. The new fiscal transparency agenda advocates: “fiscal transparency... provides legislatures, markets, and citizens with the information they need to make efficient financial decisions and to hold governments to account for their fiscal performance and utilization of public resources.”

In calling for greater transparency in the region, the IMF highlight: “the United Arab Emirates, the financial rescue of Dubai by neighboring Abu Dhabi was due in part to the unsustainable accumulation of liabilities by government-related enterprises, such as Dubai World, which had accumulated as of January 2010 US$86 billion (79 percent of GDP) in debt. The IMF indicates greater transparency and accountability of public resources would prevent such situations recurring.

Investor awareness and improved governance

The board of the UAE Securities and Commodities Authority (SCA) has passed several amendments to laws concerning trading of shares and corporate governance of listed entities in the Emirates. The regulations updates and amendments include: Improvements for corporate regulation for disclosure and transparency; regulation for short-selling of securities; regulation for securities lending and borrowing and regulation for trading, clearance, settlement and securities ownership transfer.

Additionally the SCA has embarked on an Investor Awareness campaign including forums, films and training. Additional information on the SCA website.

Dubai governance institute appoints board

Hawkamah, the Dubai International Financial Centre’s corporate governance body, has appointed its first board. Chaired by the director-general of the Dubai Chamber of Commerce and Industry, Hamad Buamim, Maryam al-Suwaidi of the UAE’s market regulator will act as vice-chairman.

The board also has Sameer al-Ansari. Mr. Ansari led Dubai International Capital, the private equity vehicle owned by Dubai’s ruler. He then moved to Shuaa Capital, where he spent two years trying to turn round the lossmaking investment bank’s fortunes. 

Hussein al-Banawi of Saudi Arabia has also joined the corporate governance body’s board. He is chairman and chief executive of the Banawi Industrial Group, the board of which also includes Mr Ansari.

The board also includes Peter Montagnon, an adviser to a UK council body aiming to improve corporate governance and financial reporting. Mr Montagnon was at the Financial Times for two decades, including a stint heading the Lex column.

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Head of Behavioral Finance
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