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On July 1, 2026, the Dubai Financial Services Authority (DFSA) brought into force two significant Rule-Making Instruments amending the DFSA Rulebook as part of its broader initiative to strengthen the prudential and conduct frameworks applicable to firms operating within the Dubai International Financial Centre (DIFC). The amendments implement changes consulted on under Consultation Paper No. 161 (prudential reforms) and Consultation Paper No. 165 (Authorised Individuals and Conduct Principles reforms). Prudential  Investment, Insurance Intermediation and Banking Business Module (PIB)  - Rule-Making Instrument No. 441 of 2026 The revised PIB Rulebook introduces a restructured prudential framework for DIFC-authorised firms, with the following key changes: Re-categorisation of firms: Firms operating an alternative trading system are reclassified from prudential category 4 to prudential category 3A, aligning their capital treatment with other category 3A firms. Activity-Based Capital Requirements (ABCR): The ABCR framework is introduced as a key component in determining overall capital requirements for category 3A firms, comprising three metrics: the Assets Safeguarded and Administered (K-ASA) requirement at 0.06% of average ASA over the preceding six months; the Assets Under Management (K-AUM) requirement at 0.02% of average AUM over the preceding six months; and the Client Orders Handled (K-COH) requirement at 0.10% of average daily cash trades plus 0.01% of average daily derivatives trades over the preceding six months. Category 3A firms are relieved from risk capital requirements and are instead subject to ABCR. Capital buffers and liquidity: Category 3A firms must maintain a 20% capital buffer as stipulated in PIB 3.2.6 and must hold liquid assets in excess of their base capital requirement or Expenditure-Based Capital Minimum (EBCM), whichever is applicable. Firms whose capital requirement is determined by ABCR must maintain a Common Equity Tier 1 (CET1) ratio of 60% and a Tier 1 ratio of 80% of their ABCR. Professional Indemnity Insurance (PII): PII requirements are removed for firms under prudential categories 3C and 3D. Minimum PII coverage standards are established for domestic firms under categories 3B and 4. Conduct of Business Module (COB) - Rule-Making Instrument No. 442 of 2026 The revised COB Module introduces a reformed Conduct Principles framework and updates the DFSA's approach to Authorised Individuals, with the following key changes: Replacement of Principles for Authorised Individuals with Conduct Principles: The existing Principles for Authorised Individuals are replaced with a revised and expanded set of Conduct Principles, broadening their application beyond Authorised Individuals to a wider population of Relevant Employees within firms, including those in front-office, control functions, and certain outsourced roles. This significantly expands the scope of accountability and ethical expectations across DIFC-authorised firms. Retention of Licensed Functions framework: Following significant stakeholder pushback on CP165 proposals to replace DFSA authorisation with a designation model, the DFSA has decided to retain its existing Licensed Functions framework. Compliance Officers, Finance Officers, and Senior Managers will continue to require DFSA authorisation. The proposed Designated Function and Designated Individual regime will not be introduced at this stage. Fitness and propriety obligations: Whilst the authorisation requirement is retained, the DFSA reaffirmed that Authorised Firms remain fully accountable for the appointment and ongoing fitness and propriety of their employees, including those in key functions, regardless of regulatory approval. The DFSA confirmed that existing Rulebook guidance on fitness and propriety assessments is considered sufficient and no additional prescriptive requirements will be introduced. Enhanced scrutiny of governance arrangements: The DFSA indicated that Authorised Firms should expect additional supervisory scrutiny of their fitness and propriety processes, governance arrangements, record-keeping, and Conduct Principles training for all Relevant Employees going forward. All firms are required to comply with both sets of changes from July 2, 2026