The Dubai Financial Services Authority (DFSA) is pleased to announce that its regulatory framework for central counterparties (CCPs) has been classified as equivalent to that of the European Union.

The determination, made by the European Commission (Commission), acknowledges the work undertaken by the DFSA to instil internationally-recognised best practices including a robust framework that promotes financial stability through a reduction in systemic risk. The distinction will encourage cross-border activity between European clearing members and CCPs located in the Dubai International Financial Centre (DIFC) by reducing the regulatory burden to participate in the market.

This development further evidences the DFSA’s commitment to implementing a regulatory framework for the DIFC that is in line with international standards set out under the Principles for Financial Market Infrastructures issued by the International Organisation of Securities Commissions. In so doing, the DIFC continues to cement its position as the leading hub for international financial services in the region.

Mr Ian Johnston, Chief Executive of the DFSA, said: “The DIFC has firmly established itself as the central gateway through which international and regional financial institutions conduct business across the region. The recognition received from the Commission for our regulatory framework for CCPs, will further strengthen the confidence market participants already have when operating in our Centre.”

Nasdaq Dubai is the DFSA-licensed CCP operating in the DIFC in respect of equites and derivatives trading. Alongside the DIFC, the Commission published equivalence decisions for the regulatory frameworks for CCPs of India, Brazil, New Zealand, Japan and the UAE. Other jurisdictions whose CCP regimes are also recognised include the US, Canada, Switzerland, Australia, Hong Kong and Singapore.