This year has been challenging in many ways. It has also been one of the busiest years in recent times for changes in the legal and regulatory regime.
To assist in tracking the numerous legal developments which have taken place in 2020, our last client alert of 2020 is a recap on the material changes which have occurred.
We trust you find this helpful to keep track on what is an ever changing legal and regulatory landscape in the UAE.
1. Crowdfunding: the Loan Based Crowdfunding Activities Regulation was issued on 14 October 2020 and is now effective. For further information see our Client Alert here.
2. Movables Law: the Securing Rights in Movable Assets law was issued on 31 May 2020 (replacing the 2016 law), and came into effect on 1 June 2020. For further information see our Client Alert here.
3. Stored Values: the Stored Value Facilities Regulation was issued on 30 September 2020 and came into effect on 15 November 2020. The regulation replaced the ‘Regulatory Framework for Stored Values and Electronic Payment Systems’ and further information can be found in our Client Alert here.
4. SCA transition to markets - Federal Law no. 22 of 2020 was issued to Transfer SCA Regulatory Powers to the Financial Markets. The Law was issued on 27 September 2020 and came into force on the next day of publication date of 30 September 2020.
5. Suitability: SCA issued regulation (05/Chairman) of 2020 concerning suitability and appropriateness standards which created obligations on all SCA licensed entities to comply with certain suitability and appropriateness criteria while conducting their activities. The regulation became effective on 29 March 2020. See our Client Alert here.
6. Qualified Investor: SCA also updated the definition of ‘Qualified Investor’ with respect to its existing promotion regulations under Resolution No. (9) of 2020 amending Chairman’s Resolution No. (37/RM) of 2019 which came into force on 1 April 2020. See our Client Alert here.
7. Crypto Asset Regulations: SCA issued Chairman’s Decision (23/Chairman) of 2020 concerning the Regulations for Crypto Assets Activities, which was published in Gazette 690 dated 15 November 2020 and comes into force 30 days from the date of its publication. The regulation aims to regulate the offering, issuing, listing and trading of crypto assets in the UAE.
8. Banking Law: an amendment to the Banking Law was made through Federal Decree By Law No. 25 of 2020. The law was issued on 27 September 2020 and shall come into force on 2 January 2021. The amendment is primarily to introduce the Central Bank as the regulator of insurance activities in the UAE.
9. Bankruptcy Law: Federal Decree by Law No. (21) of 2020 Amending certain Provisions of Federal Decree by Law No. (9) of 2016 Concerning Bankruptcy was issued and came into effect on 1 October 2020. The primary focus of the amendment was to introduce the concept of an Emergency Financial Crisis period. For further information see our Client Alert here.
10. Dormant Accounts: the UAE Central Bank issued Circular No. 1 of 2020 concerning Dormant Accounts Regulations to establish a general framework for the control and protection of dormant accounts. For further information see our Client Alert here.
11. Shari’ah Governance: the UAE Central Bank issued Regulation no. 2123/2020 dated 3 May 2020 concerning the Standard regarding Shari’ah Governance for Islamic Financial Institution. For further information see our Client Alert here.
12. Corporate Governance: SCA issued the new Corporate Governance Manual, which replaces all previous Corporate Governance Regulations. The new Regulations were published in Federal Gazette No. 673 dated 27 February and came into force on 28 April 2020
1. Enforcement in India: UAE, DIFC and ADGM Court Judgments Now Enforceable in India Pursuant to a notification gazetted by the Indian Ministry of Law and Justice on 17 January 2020. For further information see our Client Alert here.
2. Civil Procedures: Federal Cabinet Resolution 33 of 2020 amending certain provisions of Cabinet Resolution (57) of 2018 concerning the executive regulations of the Civil Procedure Law. This was published in Federal Gazette 677 dated 30 April 2020 and came into force on the 1 May 2020. The new Resolution amended numerous provisions such as those relating to the court notification procedures, case fees, competent court tribunals, fines imposed on litigants for not complying with a court order, adjournment of court hearings, public auction bidding process, payment order procedures and regulations, execution procedures and appealing execution court decisions.
3. Commercial Transactions Law: Federal Decree by Law (14) of 2020 amending certain provisions of the Commercial Transactions Law Promulgated by Federal Law No. 18 of 1993. The law brings about changes to the Commercial Transactions Law, including changes to criminal liability for cheques with insufficient funds. This will create mechanisms that will ensure the collection of payments through cheques, such as obliging banks to partially pay the amount after deducting the total amount available to the beneficiary. The Law shall enter into force on 2 January 2022. For further information see our Client Alert here.
4. Trust Law: Federal Decree by Law No. 19 of 2020 was issued to enable a new onshore trust regime. For further information see our Client Alert here.
5. Companies Law: Federal Law by Decree No. 26 of 2020 amending certain Provisions of Federal Law No. (2) of 2015 on Commercial Companies, the highlight of which was changes to the foreign ownership regime in the UAE. The Law shall come into force on 2 January 2021. For further information see our Client Alert here.
In January 2020, the DFSA amended their existing rules, requiring enhanced suitability measures to be undertaken by Authorised Firms, which also coincided with the introduction of mandatory Continuing Professional Development requirements for all Senior Executive Officers, Compliance Officers and Money laundering Reporting officers.
In April of this year we saw the DFSA introduce a new type of regulated license under their newly issued Money Services regime.
The new DIFC Data Protection Law 2020 also came into force on 1 July 2020. For further information see our Client Alert here.
Earlier the FSRA announced the enactment of various amendments to the FSRA’s regulations and rules concerning the authorisation and supervision of virtual asset activities within the ADGM, see further information here.
2020 also saw updates to the bankruptcy regime in the ADGM, with specific provisions dealing with priority financing. It also saw the introduction of the new Money Services regime.
Additionally, the ADGM had various public consultations including on the proposed regulatory framework for providing third party financial technology services in ADGM, together with its proposed Electronic Transaction Regulations.