Dubai Financial Services Authority expects further growth and activity in 2024

Ian Johnston

Ian Johnston, Chief Executive, Dubai Financial Services Authority (DFSA), expects further growth and activity this year, following the strong performance achieved in 2023.

"2023 was the DFSA's busiest year in terms of the number of new licences issued, with more than 100 new financial services firms, surpassing 2022," Johnston told Emirates News Agency (WAM).

The DFSA achieved exceptional growth last year, licencing and registering a record number of companies during 2023, a 25 percent increase from 2022, bringing the total number of licenced companies to 791.

"As the regulator of the Dubai International Financial Centre (DIFC), it is most important for us that the centre continues to grow and expand, especially as its work does not stop at attracting more companies, but there is more work being done by the financial institutions registered there," Johnston added.

"We have 27 out of 29 systemically important global banks headquartered in the DIFC, as well as most of the major fund managers and the majority of insurance and reinsurance companies," Johnston said.

The DFSA CEO pointed to a significant increase in the interest of hedge funds to be present in Dubai amid rapid growth in the sector, noting that many hedge funds and other funds around the world are moving to the DIFC.

During the past year, the DFSA recorded a 125 percent year-on-year increase in the number of asset managers and hedge funds established in the DIFC.

Ian Johnston highlighted the DIFC's impressive growth as a leading financial hub. He stated that the DIFC has surpassed its regional competitors to become the largest financial centre in the Middle East and a prominent global player.

Currently, over 600 financial services firms operate within the DIFC, employing more than 40,000 people and significantly contributing to the UAE's economy, he added.

Focusing on Nasdaq Dubai, the DIFC's stock exchange, Johnston noted its emergence as the world's leading market for environmental, social and corporate governance (ESG) Sukuk, as the percentage of ESG-related Sukuk denominated in US dollars listed on Nasdaq Dubai reached more than 60 percent, and nearly 40 percent of ESG-related Sukuks in other currencies. He explained that the volume of these Sukuk reached US$27 billion.

This achievement reinforces the DIFC's commitment to sustainable finance. Moreover, the total value of debt securities listed on Nasdaq Dubai has reached a staggering US$129.4 billion, with Sukuk representing US$71.6 billion, while conventional bonds reached US$30.8 billion, highlighting the depth and liquidity of the DIFC's capital markets.

Johnston further emphasised the crucial role of Chinese banks in sukuk listings on Nasdaq Dubai, underlining the robust ties between the UAE and China in the financial sector. He specifically mentioned major banks like Bank of China and Industrial and Commercial Bank of China conducting significant sukuk issuances on the exchange.

Beyond traditional finance, Johnston also pointed to the DFSA's interest in exploring new technologies within the financial sector. Dubai is actively positioning itself as a major hub for digital assets, and this strategic focus is expected to attract further investment and innovation to the DIFC.

Johnston highlighted the close cooperation between the DFSA and regulatory authorities in China and Hong Kong, reflecting the strong ties between the UAE and these countries in the financial sector. He mentioned that the DFSA works closely with the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission of Hong Kong, and that they jointly organise some activities.

Johnston also announced that the DFSA, in collaboration with the HKMA, will host a joint conference on climate finance in Hong Kong this year and in Dubai next year.

The DFSA and the HKMA have collaborated in a number of areas, including promoting and supporting innovation in their respective markets. In December 2017, the two sides signed a cooperation agreement in the field of financial innovation.