DFSA and Bank of Italy sign preliminary agreement for co-operation on financial supervision

Deal builds on a 2013 accord and focuses on fighting financial crime, among other issues

A new law has given the DIFC a broader remit. Sarah Dea / The National

The Dubai Financial Services Authority (DFSA), the regulator of the emirate’s financial hub, and the Bank of Italy signed a preliminary agreement to co-operate on financial supervision.

The deal between the two regulators focuses on co-operation and information exchange in the supervision and resolution of financial institutions, including the important area of fighting financial crimes, the DFSA said on Wednesday.

The agreement builds on a previous agreement signed by the DFSA and the Bank of Italy in 2013. It updates the framework of co-operation between the authorities, including procedures for on-site inspections of “supervised entities physically located in the jurisdiction of the other authority”.

"The DFSA places high importance on compliance with international standards of regulation and supervision, including pro-active co-operation and collaboration with other regulators,” Bryan Stirewalt, chief executive of the DFSA, said.

“Our strategic co-operation with the Bank of Italy has significantly enhanced communication between the two financial ecosystems, bringing continuity, stability and certainty to our respective economies.”

These engagements are even more critical in the current market, as supervisory co-operation allows “safe and efficient cross-border flows” of capital, talent and knowledge, Mr Stirewalt said.

The DFSA's regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading and Islamic finance. It also has oversight of insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange within Dubai’s financial hub.

The DFSA frequently updates its rules and regulations to align them with international standards. In March, the authority published for consultation its framework to regulate security tokens in the DIFC.

The proposed regulations include safeguards to tackle investor protection issues and misconduct risks. They also address market integrity, financial stability – as well as money laundering – and terrorism financing threats in the direct access environment, the DFSA said.