DIFC releases Exempt Company Regulations
5-May-2008The DIFC Authority issued for public consultation the Exempt Companies Regulations, designed to assist financial institutions to carry out, among other things, securitisation transactions using the existing Dubai International Financial Centre (DIFC) legal and regulatory framework.
Nasser Al Shaali, chief executive of the DIFC Authority said: "As the DIFC continues its emergence as a leading international financial centre we are committed to providing the most mature, sophisticated infrastructure and legal framework to promote the development of a highly prosperous financial industry. By proposing the new regulations we aim to encourage securitisation transactions at the centre and cater and encourage the expansion of the products and services available at the DIFC."
Both Islamic finance and conventional finance transactions in the region often require the use of special purpose vehicles (SPVs), which are usually incorporated with the intention of being restricted in their operations, with no employees other than special directors.
The use of SPVs in the DIFC under the new regulations is simply for the purpose of facilitating sophisticated financing activity. This is likely to have a favourable impact on the region's increasing demand for SPVs, in both conventional and Sharia-compliant products.
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