The proposed changes aim to modernize the DIFC’s wealth and asset management ecosystem by replacing rigid classification systems with a flexible structure capable of accommodating hybrid and multi-strategy investments. Key adjustments include simplifying authorization requirements for managers and updating master-feeder fund structures to better reflect modern market practices. The regulator also plans to remove the external fund manager regime, citing a robust pipeline of firms seeking full local authorization.
Dubai Financial Services Authority Proposes Major Collective Funds Overhaul
The Dubai Financial Services Authority has launched a sweeping review of its two-decade-old collective investment framework, marking the regulator's most significant update since 2010. By introducing Consultation Paper No 173, the DIFC markets authority seeks to pivot toward a risk-based model that aligns local operations with evolving international standards.
Charlotte Robins, managing director of policy and legal at the DFSA, stated that the initiative is designed to focus safeguards on relevant fund-related risks while fostering sustainable growth and competitiveness. Beyond structural updates, the consultation invites industry feedback on the tokenization of fund units and the potential creation of a long-term investment fund regime. This latter proposal seeks to grant retail investors access to illiquid, real-economy asset classes previously restricted to professional portfolios. Stakeholders, including fund administrators, custodians, and legal advisors, have until September 7 to submit their responses.
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