The proposed “Financial Promotions Prohibition”, which will be enforced within the Dubai International Finance Centre, is to be loosely based on the UK’s “Restrictions on financial promotion” and will prohibit any financial promotions by unauthorised people or companies.
There are already some restrictions in place on the promotion of financial products however, the DFSA said its proposals are “designed to create a comprehensive regime covering financial promotions relating to financial services and financial products” which fall outside its current rules.
Examples of where the DFSA intends to extend its current rules include around the promotion of investment advice in relation to specific securities or funds, investment research, corporate finance advice, underwriting and market making. The DFSA said it will also cover credit facilities and deposit products, profit sharing investment accounts and insurance products.
In a statement it said: “The proposals fill a gap in the regime, and provide the DFSA with a power to bring enforcement action against persons making financial promotions which breach the rules, which at present we cannot effectively do.
“This will enable the DFSA to better police the perimeter, an area where we have experienced issues.”
It went on to explain perimeter issues it has experienced have included unauthorised persons setting up a marketing presence in the DIFC, “unregulated” conferences, pressure sales into the DIFC by unregulated persons and financial scams.
The DFSA has asked the industry for feedback on its proposals (which can be found here) and set a closing date for submissions of the 23 November 2010.
