By introducing new rules on the sale of foreign funds, the United Arab Emirates aims to shield its investors from losses as global markets struggle. But the country risks damaging its role as a hub for asset management in the region.
The rules, which will take effect on an unspecified date when they are published in the official gazette, transfer primary responsibility for overseeing investment funds to the Securities and Commodities Authority (SCA), the national financial regulator, from the central bank.
They cover both the promotion and sale of foreign funds in the UAE, and requirements for offering and launching new local funds. Collectively they mark one of the biggest changes in UAE financial regulation since the country's corporate debt crisis erupted in 2009. The UAE is the main financial centre in the Gulf, and is used by investors from countries such as Saudi Arabia and Kuwait to channel money, so the regulatory changes could potentially affect fund flows throughout the region.
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