UAE Banking Sector Strengthens Compliance for Restricted Licence Finance Companies and Agents
The United Arab Emirates (UAE) banking sector has taken a significant step in enhancing the regulatory framework governing Restricted Licence Finance Companies and Agents. As of September 29, 2023, these entities are required to implement robust compliance procedures that adhere to relevant UAE laws.
Key Requirements for Compliance
- Reporting Breaches: Restricted Licence Finance Companies and Agents must report any breaches or non-compliance issues to the Central Bank of the UAE (CBUAE).
- Prudential Requirements: The CBUAE retains the authority to impose additional prudential requirements, including:
- Restrictions on operational scale
- Specific governance arrangements
- Capital adequacy standards
- Anti-Money Laundering (AML) Compliance: Entities must implement preventive measures to mitigate money laundering and terrorist financing risks.
- Consumer Protection: Adherence to the CBUAE’s Consumer Protection Regulation (Circular No. 8 – 2020) and related standards is mandatory.
Outsourcing Service Providers
Restricted Licence Finance Companies and Agents are expected to ensure that their outsourcing service providers maintain high levels of:
- Information security
- Risk management
- Service delivery
These service providers must also comply with relevant UAE laws and Central Bank regulations applicable to their outsourced services.
The strengthened compliance procedures aim to bolster the regulatory framework governing Restricted Licence Finance Companies and Agents in the UAE. By adhering to these requirements, entities can ensure a more secure and compliant operating environment.