pc
nid 93806
Jul 08, 2026
ggallwey@vixio.com
Dubai
DFSA - News
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2300 charsDubai Financial Services Authority Proposes Significant Updates to Collective Investment Fund Framework
On July 7, 2026, the Dubai Financial Services Authority (DFSA) published Consultation Paper No. 173 (CP 173), proposing significant updates to its Collective Investment Fund framework. The DFSA's funds framework was established in 2006, with the last major review occurring in 2010. The proposals mark the most comprehensive review of the regime in over 15 years, reflecting substantial growth and evolution within the funds and asset management industry in the Dubai International Financial Centre (DIFC), alongside developments in international standards and regulatory best practice.
CP 173 sets out wide-ranging proposals aligning regulatory requirements more closely to the risk profile of a fund and its investors while maintaining a proportionate and risk-based approach to investor protection. Key proposals include: moving away from rigid specialist private fund classifications to a more flexible, risk-based approach accommodating hybrid and multi-strategy investing; simplifying authorisation requirements for investment managers by clarifying that dealing as agent and arranging activities are integral to investment management and covered by a managing assets licence; updating master-feeder public fund structures to remove outdated eligibility criteria and broaden the definition of master fund; removing the external fund manager regime, reflecting growing demand for full DFSA authorisation; broadening the scope for employee investment in private funds managed by their employer; and making targeted technical amendments to the Collective Investment Law to improve clarity and consistency. The consultation also invites early-stage feedback on tokenisation of fund units and fund assets, including tokenised money market funds, and the potential introduction of a long-term investment fund regime to allow retail investors to access illiquid, real-economy asset classes.
The DFSA encourages responses from all stakeholders with an interest in DIFC's fund and asset management ecosystem, including fund managers, fund administrators, asset managers, custody providers, firms intending to apply for DFSA authorisation, and legal, accounting, audit, and compliance advisers. The comment period ends on September 7, 2026, with responses submitted via the DFSA's online response form.
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2395 charsDubai Financial Services Authority Proposes Significant Updates to Collective Investment Fund Framework
On July 7, 2026, the Dubai Financial Services Authority (DFSA) published Consultation Paper No. 173 proposing a comprehensive overhaul of its Collective Investment Fund framework .
The consultation proposes:
Replacing the current specialist classifications for Qualified Investor Funds (QIFs) and Exempt Funds with a more flexible, risk-based framework focused on the activities undertaken, the risks presented and the safeguards required.
Proposes applying certain risk management requirements horizontally across all fund managers
To introduce enhanced disclosure requirements for borrowing and leverage, extending rules governing the use of prime brokers
Retaining targeted safeguards for funds pursuing credit investment strategies while removing several prescriptive specialist fund requirements.
The proposals would also simplify the authorisation framework by clarifying that the regulated activities of Dealing in Investments as Agent and Arranging Deals in Investments are covered by a Managing Assets licence where they are undertaken as part of delegated investment management.
In addition, the DFSA proposes:
Updating master-feeder fund rules
Broadening the definition of a master fund
Removing the External Fund Manager regime in favour of full DFSA authorisation
Expanding opportunities for employees to invest in private funds managed by their employer
Extending the first annual reporting period for new funds from 12 to 18 months
Making technical amendments to the Collective Investment Law and related Rulebook provisions
The consultation seeks early-stage feedback on the future regulation of tokenised fund units, tokenised assets and tokenised money market funds, as well as the possible introduction of a long-term investment fund regime that could provide retail investors with access to illiquid real-economy assets subject to appropriate investor safeguards.
The proposals are intended to align the framework more closely with international standards and regulatory best practice, improve clarity, reduce unnecessary regulatory burden, and adopt a more proportionate, risk-based approach to investor protection.
Responses to the consultation must be submitted via the regulator's website by September 7, 2026. If adopted, the DFSA proposes a general transition period of three months following the finalisation of the legislative and Rulebook amendments.