Proposed Amendments to DIFC Markets Law: Easing the Path for International Offers of Securities

The Riffle

The Dubai Financial Services Authority (DFSA) has released a public consultation (CP166) proposing significant amendments to the DIFC Markets Law and related Rulebook modules (MKT, IFR, GEN). The core aim of these changes is to eliminate the regulatory burden on Offers of Securities to the Public made from the DIFC—those aimed at investors outside the DIFC—while retaining investor protection within its jurisdiction. This move aligns DIFC regulations with global standards and reflects the DFSA’s commitment to proportional, efficient oversight.

Key Points

1. Current Regulatory Framework

• Offers of Securities to the Public “in or from” the DIFC require an Approved Prospectus under Article 14(1)(a) of the Markets Law.

• Such offers currently trigger Reporting Entity status, leading to extensive compliance requirements.

• Offerors must notify the DFSA and comply with both DIFC and the target jurisdiction’s regulations.

• Financial Promotion Rules apply to all communications “in or from” the DIFC, but exclude regulated offers to avoid duplication.

2. Rationale for Change

• Market Demand: Rising interest in using DIFC structures to raise capital abroad.

• Global Benchmarking: Regulators in Singapore, Hong Kong, ADGM, EU, UK, and BVI regulate offers in their jurisdiction, not those from it.

• Avoiding Duplication: Dual compliance imposes unnecessary burdens and may conflict with target jurisdiction rules.

• DFSA Principles: Supports efficient use of resources and ensures the cost of regulation is proportionate to its benefits.

3. Proposed Amendments

• Remove Offers "from" the DIFC from DFSA oversight, specifically:

  • Eliminate the Approved Prospectus requirement for such offers.

  • Amend the definition of a Reporting Entity to exclude offers made only from the DIFC.

  • Update Rulebook modules (MKT, IFR, GEN) to reflect this narrowed regulatory scope.

  • Remove notification requirements to the DFSA under MKT Rule 2.5.7.

  • Modify GEN Rules to clarify that Financial Promotion Rules do not apply to these offers.

• No mandatory disclaimers by DFSA, though offerors must still avoid misleading or deceptive communications as per Regulatory Law Article 41B.

4. Scope of Review

• These amendments are specific to offers of securities and do not affect the broader financial services regulatory regime in or from the DIFC.

Next Steps

The DFSA has opened a public consultation on the proposed amendments, with feedback accepted until June 16, 2025. After the consultation:

• The DFSA will evaluate stakeholder comments.

• Proposed changes will be submitted for formal assent.

• Rulebook amendments will be finalized and a public notice will be issued.

*Until the new framework is officially enacted, offerors must continue complying with the existing regulations.

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