The calculation of the DBR should disregard any promotional or introductory interest rate being offered by the lender. Whilst it is expected that a number of CBUAE licensed banks that are joint-stock companies (subject to the SCA Regulations) will have already implemented a number of the requirements in the CB Regulations, action will need to be undertaken to comply with the additional mandatory requirements (set out above). There is a strong focus on having a vigorous internal controls framework and ensuring that any issues are being flagged to the board, including monitoring of outsourced activities. In relation to banks which provide islamic financial services, there are specific requirements which must be met from a shari’ah law perspective. Previously, UAE banks would have complied with several important CBUAE notices and circulars which mainly dealt with the appointment of board members and senior management. The Regulations will also apply without exemption to banks and institutions providing shariah complaint loans for the purchase of properties. PwC has a dedicated team that can help you with the following: All CBUAE licensed banks should assess and review their corporate governance framework and practices, including internal controls and policies, in order to ensure they are in line with the CB Regulations. The size of the group and its framework is taken into account by the CBUAE when assessing compliance with the CB Regulations. Have itall at your fingertips. Draft documentation supporting the corporate governance framework. by Margaret Elder - Senior Associate - Banking & Finance - m.elder@tamimi.com - Dubai International Financial CentreSarah El Serafy - Senior Associate - Banking & Finance - s.elserafy@tamimi.com - Dubai International Financial Centre. These new regulations encompass Islamic and conventional finance companies and introduce significant regulatory changes to the regulatory requirements applicable to finance companies (including capital requirements) and set out the type of activities permitted to be carried out by a finance company in the UAE. New DIFC Companies Law and Enhancements to the DFSA’s Funds Regime. Please see www.pwc.com/structure for further details. In the case of UAE nationals, for properties valued at AED 5 million and below, the LTV will be a maximum of 80 per cent of the value of the property. It has been another busy year for legislators in the United Arab Emirates (‘UAE’), as there has been a number of changes to the regulatory framework in the financial services sector. Business regulations related to mainland companies. Central Bank Finance Companies Regulation.
However, the scope and types of contracts that will be regulated remains unclear, as the SCA has not currently provided any separate guidance to clarify. Regulation Crypto Asset Activities in the ADGM. In essence it would appear that the Regulations are an attempt by the Central Bank to regulate borrowing in the market by reducing the level of leverage currently available to borrowers and increasing equity in property investments. Annual board evaluations must be undertaken, with an external evaluation undertaken by a third party at least every five (5) years. Al Tamimi & Company’s Banking & Finance team regularly advises on financial services regulatory matters. Provide board member training and an effective induction programme. 2 of 2015 on Commercial Companies, as amended applies on any economic entity which practice any commercial, financial, industrial, agricultural, real estate or other kinds of economic activity on the mainland except the following: .
In cases where the property value exceeds AED 5 million, the LTV shall be 70 per cent of the value of the property. The law permits the Federal Government to issue sovereign debt for the first time in the UAE. The law will be supplemented by a set of implementing regulations applicable to the licensing of finance lease activities in the UAE. In addition, the maximum financing amount allowed for UAE nationals is set at eight times their annual income and at seven times for non UAE nationals. Pursuant to these regulations, the SCA is now regulating credit rating agencies in the UAE. In brief New Corporate Governance Regulations for Banks. Thanks for contacting us! Want to view invoices? The Regulations set different rules relating to properties which are incomplete and therefore purchased off plan. The CB Regulations covers the following areas: A number of the key highlights of the corporate governance requirements set out in the CB Regulations are outlined below: It is important to note that it is mandatory for all CBUAE licensed banks to comply with the CB Regulations, unlike the SCA Regulations which are enforceable on a ‘comply or explain’ basis for those entities it is applicable to (joint-stock companies in the UAE). The board must have a robust delegation of authority which clearly defines decision making between the board and senior management. An important point to note in respect of the new DIFC regime, is that DFSA regulated firms, are exempt from the new Ultimate Beneficial Owner regulations. The above LTV’s apply to properties that are completed. In the event of a second home or an investment property purchase by a non UAE national, the Regulations state that the maximum loan available will be 60 per cent of the value of the property. New Banking Law: Federal Law No 14 of 2018.