DFSA opens consultation on miscellaneous regulation changes

The regulator has unveiled plans (8-page/ 505 KB PDF) for three major areas of change, including the definition of certain crypto and investment tokens, reforms to the credit rating agency (CRA) and an update in regulatory reporting requirements.

The plans have now been put to public consultation  as the DFSA looks for input on the proposals and how they would affect firms operating in and from the Dubai International Financial Centre (DIFC) going forward.

Marie Chowdhry, a fintech expert with Pinsent Masons in the UAE, said the consultation contained several proposals which would have practical implications for regulated firms in the DIFC.

“Taken together, the amendments reflect the DFSA's continuing efforts to refine its regulatory framework, remove unintended consequences in existing rules and ensure alignment with international standards,” she explained.

“In the digital assets space, the proposals relating to digital asset rules are particularly interesting. The DFSA is seeking greater certainty around the classification of fiat crypto tokens, a more targeted approach to privacy tokens and devices, and a simplified investment token definition capable of accommodating emerging tokenisation structures - including hybrid on-chain and off-chain arrangements.

“These changes may affect how firms assess, structure and market certain crypto and investment tokens within the DIFC.”

For digital asset firms, the proposed amendments are intended to improve clarity, align the DFSA framework with international practices and address unintended consequences arising from the current drafting. 

Alongside those changes, amendments to the conduct of business module in the rulebook would mean a reduction in the restrictions around conflicts of interest, with credit rating employees only barred from decisions if they have a relationship with a person employed by a rating subject or a related party which may be perceived as a conflict of interest. 

Previously the rules included security in, or relatives connected with, ratings subjects, which the DFSA said had encompassed areas where a conflict of interest would be an insignificant risk.

Other changes include limiting disclose disclosure requirements around fees and charges, and around rating methodologies which are broader than necessary and not aligned to international standards, such as the International Organization of Securities Commissions.

The consultation also proposes rules revisions to reflect recent prudential reforms introduced through earlier consultations.

Jessica White, a financial regulation expert with Pinsent Masons in the UAE, said the planned changes would strike a balance between unnecessary regulatory burdens and consumer protection.

“The proposed CRA reforms demonstrate a willingness by the DFSA to recalibrate requirements where they may be disproportionate or duplicative,” she said.

“In particular, the proposed CRA amendments seek to maintain appropriate safeguards against conflicts of interest while reducing burdens that do not appear necessary to achieve regulatory objectives.

“More broadly, the consultation highlights the importance of firms regularly reviewing the DFSA's evolving regulatory framework.”

The consultation runs until 24 August 2026.