Out-Law News | 07 Jul 2020 | 1:22 pm | 1 min. read
The United Arab Emirates (UAE) is to merge its Insurance Authority (IA) and Securities and Commodities Authority (SCA) as part of a significant restructuring of government and supervisory authorities in the country.
Prime minister Sheikh Mohammed bin Rashid Al Maktoum announced the merger on Sunday, confirming plans originally mooted last year.
Financial services regulation expert Tom Bicknell of Pinsent Masons, the law firm behind Out-law, said the merger was likely to provide cost savings for the regulators in the long run as they will be able to share resources in a more efficient way.
“However, the changes will no doubt create a period of uncertainty for market participants as they await the publication of further information and will need to navigate the new rules. This may mean that firms currently authorised and regulated by the IA and SCA will need to reapply for licences under the new regulatory framework, although it is unclear at this stage what the licensing framework will look like,” Bicknell said.
“In the long run the removal of regulatory overlaps will be beneficial for firms needing to deal with a single regulator,” Bicknell said.
Confirmation of the merger followed a ministerial resolution announcing the plans in late September 2019. The UAE Ministry of Justice set up a committee including members of the SCA, the IA, and other government bodies such as the Ministry of Finance and the Ministry of Justice to prepare the necessary legislation.
The tie-up is expected to improve communication between the regulatory authorities in the country.
The merger between the IA and the SCA is part of sweeping changes announced by Sheikh Mohammed, which will see the closure of 50% of government service centres and their transformation into digital platforms within two years, and the mergers of around 50% of federal authorities with other authorities or ministries.
The merged IA and SCA will be chaired by the newly appointed minister of economy Abdullah bin Touq Al Marri.
19 Nov 2019