Dubai’s financial markets and services regulator, the Dubai Financial Services Authority (DFSA), has announced it will launch a new class of financial services license for financial technology companies, called Innovation Testing Licence (ITL).
The new type of license will let fintechs develop and test innovative concepts from within the Dubai International Financial Centre (DIFC), without being subject to all the regulatory requirements that normally apply to regulated firms. It will be valid for six to 12 months. After that the company would either have to apply for a full license, or to cease its activities in Dubai.
“FinTech is changing the landscape for financial services, providing more opportunities to seek financing and increasing financial inclusion. As regulators, it is our responsibility to provide a framework which supports the sustainable development of this industry while protecting consumers and financial stability”, said Ian Johnston, Chief Executive at the DFSA.
The temporary ITL license is part of the regulator’s aim to turn Dubai into a fintech innovation hub and formalize its approach to relatively new financial services like crowdfunding, which has already become a valuable source of financing in SMEs in several jurisdictions.