The Dubai Financial Services Authority (DFSA) has issued Consultation Paper 165 (CP165), outlining key reforms to the Authorised Individuals and Licensed Functions regime. These changes, set to take effect from 1 September 2025, aim to streamline regulatory approvals, increase transparency, and shift greater responsibility to firms in managing their compliance and governance frameworks.

With the consultation period open until 5 May 2025, firms operating in the DIFC should start evaluating how these regulatory updates will impact their governance structures and compliance processes.

Key Changes Under CP165

The proposed amendments introduce several fundamental changes to how firms appoint and manage their key personnel:

• Reclassification of Key Roles

  • Compliance Officers, Finance Officers, and Senior Managers will now be classified as Designated Individuals rather than Authorised Individuals.

  • This means the DFSA will no longer require prior approval for their appointments, placing the responsibility on firms to ensure suitability.

    
    

• Firm-Led Responsibility for Appointments

  • Instead of obtaining DFSA approval, firms will be solely responsible for assessing, appointing, and ensuring the ongoing competence of Designated Individuals.

  • Firms must develop internal procedures to document and justify these appointments.

    
    

• New Notification Requirements

  • Firms must notify the DFSA within seven days of appointing or removing a Designated Individual.

  • This requirement enhances regulatory oversight while reducing administrative delays in approvals.

    
    

• Expansion of Conduct Principles

  • The DFSA’s Conduct Principles will now apply to all Designated Individuals and Relevant Employees, excluding ancillary staff.

  • This change strengthens accountability by ensuring compliance obligations extend beyond senior management.

    
    

• Public Disclosure of Designated Individuals

  • The DFSA public register will now include all Designated Individuals, promoting greater transparency across the DIFC.

What This Means for Firms

These changes place greater emphasis on internal governance, compliance monitoring, and due diligence. Firms will need to:

• Review their governance frameworks to align with new Designated Individual requirements.

• Strengthen internal vetting and approval processes for key personnel.

• Develop structured reporting mechanisms to ensure compliance with the seven-day notification rule.

• Educate relevant employees on the extended Conduct Principles.

Next Steps

With the consultation period open until 5 May 2025, firms should review the proposed changes and submit any feedback to the DFSA here.

How can firms prepare for these regulatory updates?

At j. awan & partners, we help financial institutions navigate regulatory changes with expert advisory services, governance assessments, and compliance support. Contact us today to ensure your firm is fully prepared for the upcoming DFSA reforms.

Email: info@jawanpartners.com | Visit: jawanpartners.com