Dubai, United Arab Emirates: The Dubai Financial Services Authority (DFSA), the independent banking, financial services, and markets regulator of Dubai International Financial Centre (DIFC), today 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, and these proposals mark its most significant review since 2010.
Since the regime came into force, the funds and asset management industry in DIFC has grown and evolved substantially, alongside developments in international standards and regulatory best practice.
CP 173 reflects the outcome of an extensive review informed by supervisory experience and market engagement. It sets out wide-ranging proposals aligning regulatory requirements more closely to the risk profile of a fund and its investors, whilst maintaining a proportionate and risk-based approach to investor protection and better aligning the framework with international standards and regulatory best practice – improving clarity and reducing unnecessary regulatory burden.
Charlotte Robins, Managing Director, Policy & Legal, of the DFSA, said: “The funds industry has been central to Dubai International Financial Centre’s (DIFC) development as the leading international financial hub in the Middle East, Africa, and South Asia (MEASA) region. The Dubai Financial Services Authority’s (DFSA) Consultation Paper No. 173 supports its strategic objective to broaden and deepen DIFC’s wealth and asset management ecosystem by proposing enhancements so that requirements and appropriate safeguards are directed at, and applied to, the relevant fund-related risks. This reflects our commitment to investor protection, market confidence, and proportionate regulation.
By aligning with international standards and regulatory best practice, improving clarity, and removing unnecessary regulatory complexity, we aim to support sustainable growth, responsible innovation, and the continued competitiveness of DIFC as the destination of choice for global asset managers looking to build and grow in this region.”
Shaping policy through strategic collaboration
CP 173 covers several substantive areas for formal consultation, providing greater clarity for firms:
- Moving away from rigid specialist private fund classifications to a more flexible, risk-based approach that accommodates hybrid and multi-strategy investing;
- Simplifying authorisation requirements for investment managers, clarifying that dealing as agent and arranging activities are integral to investment management of funds 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 to reflect market practice;
- Removing the external fund manager regime, reflecting the DFSA’s strong and growing pipeline of firms seeking full DFSA authorisation;
- Broadening the scope for employee investment in private funds managed by their employer, both directly and through dedicated vehicles, supporting recruitment, retention, and alignment of employee interests with investor goals; and
- Making targeted technical amendments to the Collective Investment Law to improve clarity and consistency.
The consultation paper also invites early-stage feedback on two topics, which may be the subject of policy proposals in the future:
- The 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, currently available only to professional investors.
Who should respond?
The DFSA encourages responses via its online response form by 7 September 2026 from all stakeholders with an interest in DIFC’s fund and asset management ecosystem, including:
- Fund managers and fund administrators;
- Asset managers and custody providers;
- Firms intending to apply for DFSA authorisation in any of the above categories; and
- Legal, accounting, audit, and compliance advisers serving the funds industry.
The full consultation paper is available on the DFSA website. https://www.dfsa.ae/
