The Dubai Financial Services Authority (“DFSA”) announced the acceptance of seven new firms into its cohort process, which permits companies to apply for an Innovation Testing Licence (“ITL”). The ITL forms part of the DFSA’s commitment to support innovation and the development of financial technology by enabling successful applicants to test their FinTech solutions in and from the Dubai International Financial Centre (“DIFC”). With the pace of technological development in the financial services sector, FinTech continues to have a significant impact on the financial services industry in the Middle East and beyond.
A great variety of applications was received from firms wanting to be part of this latest cohort, launched in November 2018. These applications encompassed a range of innovative, technology-driven solutions and products including: green financing; the digitisation of bond and sukuk issuances using smart contracts; SME funding platforms; robo-advisors for Islamic finance; and the tokenisation of equities and debt issuances.
· Bryan Stirewalt, Chief Executive of the DFSA, said: “I am particularly pleased by the mix of international and local candidates that have been successful and the wide range of technology solutions and products on offer, including Ethereum and Corda blockchains, artificial intelligence and algorithms and smart contracts development. The cohort also had strong representation from companies that aim to support wider Dubai and UAE objectives and government initiatives, including environmental efficiency, support for SMEs across the UAE, and the promotion of Islamic Finance. We shall continue to support the Dubai Government and the DIFC in the development of the Dubai FinTech ecosystem and consolidate Dubai’s role as the regional Fintech hub.”
After being accepted into the DFSA’s latest cohort, successful firms are now invited to apply for an ITL. The DFSA expects to grant the first batch of licences in March 2019.
· The cohort system was originally developed by the DFSA in answer to the widely positive responses generated by the ITL programme. The DFSA will continue to offer two open cohorts each year, during which, applicants should provide a clear explanation of their business model and proposed innovation [in financial technology]. The next opportunity to apply to participate in a cohort will be in May 2019. For more information about the DFSA’s upcoming Cohort and the ITL programme, please visit the DFSA website or please email: Fintech@dfsa.ae.
One of the ITL programme’s core benefits is to allow companies to apply for a restricted financial services licence that provides the flexibility to test and develop innovative concepts without being subject to the full regulatory requirements normally applicable to DFSA regulated firms.