DIFC and ADGM Licence Applications

Both the DFSA and FSRA offer various licence categories tailored to different financial activities, including:

• Asset Management
• Brokerage Services
• Advisory Services
• Money Services
• Islamic Finance
• Insurance

Common Concern:

Understanding the appropriate licence category and ensuring compliance with the associated regulatory requirements can be challenging.

Solution:

Clarity will work with you to identify the right licence for your business, ensuring that your application aligns with regulatory requirements and your operational needs.

The timeline for obtaining a license can vary depending on:

• The complexity of your business model.
• The quality of your application documentation.
• Feedback and additional information requests from the Regulator.

Typical timelines can range from 3-12 months (from beginning to end) depending on the licence being applied for.

Solution:

We streamline the process by ensuring your application is comprehensive and complete, reducing delays caused by back-and-forth communications with regulators.

Each licence category within the DIFC or ADGM comes with specific base capital requirements which range from USD 10,000 (advising/arranging) to USD 10 million (deposit-taking).  Capital Requirements will generally be calculated as higher of the base capital requirements or other components such as Expenditure Based Capital Minimum (EBCM), Risk Capital Requirement plus applicable Capital Buffer Requirements etc.

The DFSA also has specific requirements for Lower Prudential Risk Firms (those carrying out specific Prudential Category 4 activities and not holding insurance monies).  Such firms receive concessions from certain detailed prudential requirements, such as not being required to maintain capital to meet the EBCM requirement and their capital requirements will be equal to USD 30,000.  A Lower Prudential Risk Firm must maintain an amount which exceeds its Capital Requirement in the form of liquid assets.

Common Concern:

Firms often struggle to understand or meet these capital requirements.

Solution:

Where required, we can assist you in preparing or reviewing the financial projections, ensuring they meet the required regulatory standards.

The DFSA and FSRA require extensive documentation, including:

• A detailed Regulatory Business Plan (RBP).
• Completed application forms for the firm based on proposed business activities and for licensed function holders (Directors, Senior Executive Officer, Compliance Officer/MLRO, Finance Officer)
• Control documents such as the Compliance Manual, AML Policies and Procedures Manual, Risk Management Policy and initial Risk Inventory, Compliance Monitoring Programme, IT & Cyber Security related policies and procedures, Remuneration Policy, and Business Continuity and Disaster Recovery policies, etc.
• Financial projections.

Common Concern:

Compiling and presenting the required documents can be daunting.

Solution:

Our team assists you in preparing and reviewing all application related documents, ensuring they meet regulatory standards and effectively reflect your business model and activities.

Regulators often request additional information or modifications to the application.

Common Concern:

Delays caused by unclear or incomplete responses can prolong the licensing process.

Solution:

We assist in all communications with the DFSA or FSRA, providing timely and precise responses to ensure that the application progresses smoothly.

The costs of licensing include:

• Regulatory application fees (vary by licence type).
• Incorporation and commercial licence fees (vary by licence type).
• Capital requirements.
• Professional services for compliance and application preparation.

Common Concern:

Firms worry about unexpected costs arising during the process.

Solution:

We provide transparent pricing for our services and offer guidance on budgeting for application fees and other associated expenses.

Yes, DFSA and FSRA require firms to appoint specific roles, such as:

• Senior Executive Officer (SEO)
• Compliance Officer (CO)
• Money Laundering Reporting Officer (MLRO)
• Finance Officer
• Licensed Directors
• Risk Officer

The SEO, CO and MLRO must typically reside in the UAE.

Common Concern:

Finding qualified personnel who meet regulatory requirements can be a challenge.

Solution:

We can provided outsourced compliance and finance services and embed Clarity team members within your firm. Additionally, we can help train or support existing staff to fulfil these roles effectively.

Obtaining the licence is just the beginning. Firms must maintain ongoing compliance with:

• Regular reporting to the DFSA or FSRA.
• Adherence to compliance, anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
• Updating governance and risk management frameworks as required.

Solution:

Clarity provides continued support post-licensing, including compliance reviews, training, and regulatory updates.