The Dubai Financial Services Authority (DFSA) is ushering in a transformative shift in how it regulates key roles within financial firms operating in the Dubai International Financial Centre (DIFC).
With the release of Consultation Paper No. 165 (CP165), which closed for feedback on 5 May 2025, the DFSA proposed a move from a licensing model to a designation model for certain critical functions. This change, expected to take effect from 1 September 2025, marks a significant evolution in regulatory oversight.
What’s Changing
Under the proposed framework, roles such as compliance officer, finance officer, and senior manager will no longer require DFSA approval. Instead, these will become designated functions, meaning firms assume responsibility for ensuring individuals in these roles meet internal “fit and proper” standards. However, the senior executive officer (SEO) and money laundering reporting officer (MLRO) will continue to require DFSA approval.
Requirements for designated individuals (DIs) include:
- DIs will appear on the DFSA’s public register.
- Firms must notify the DFSA within seven days of any appointment or removal of a DI.
- Annual attestations will be required for all DIs.
The DFSA also introduces the concept of relevant individuals—employees who are not authorised or DIs, but who either perform or support financial services activities. The DFSA emphasises that this classification is function-based, not tied to employment contracts or geographic location. This includes roles such as:
- Relationship managers
- Client onboarding officers
- Risk and compliance staff (below DI level)
- Junior portfolio managers and analysts
The consultation paper also renamed the Principles for Authorised Individuals to Conduct Principles and expanded its scope to apply to:
- Authorised individuals
- DIs
- Relevant individuals
This expansion significantly broadens the scope of accountability and ethical expectations across firms, reinforcing a culture of integrity and professionalism.
Our Guidance
The proposed changes place greater responsibility on firms to self-regulate and maintain high standards. Firms should begin preparing now to ensure compliance and readiness.
- Conduct a role impact assessment to identify which roles will move from licensed functions to designated functions and assess whether these persons meet the DFSA’s new standards for fitness and propriety.
- Update governance policies and procedures to reflect that appointments to designated functions will now be an internal responsibility and define clear appointment and removal procedures.
- Develop or refine the fit and proper assessment framework for DIs—including background checks, conflict of interest declarations, competency assessments, and annual attestation processes.
- Implement a process to notify the DFSA within seven days of any appointment or removal of an AI or DI and ensure these notifications are integrated into the firm’s regulatory calendar and compliance monitoring program.
- Conduct training and awareness sessions for existing and new DIs on the expanded Conduct of Principles.
- Embed the expanded Conduct of Principles standards in HR policies, performance management, and compliance training programs.
- Prepare for the public disclosure of DIs on the DFSA register and ensure all affected individuals are aware of this and confirm accuracy of information held.
With over 50 responses—the highest ever for a DFSA consultation—the financial community has shown strong engagement with CP165. The DFSA’s Feedback Statement is expected imminently.
Given the complexity and scope of these changes, many firms may benefit from engaging experienced third-party advisors—such as the ACA Effecta team—who can provide tailored support and help ensure a smooth transition.
How We Help
Our ACA Effecta team specialises in helping firms navigate the evolving regulatory landscape in the UAE, including the DIFC and ADGM. We combine deep local expertise with global best practices to deliver practical, scalable compliance solutions.
Here’s how we support firms responding to CP165 and beyond:
- Provide regulatory advisory with tailored guidance on the DFSA’s new designation model, helping you assess role impacts, update governance frameworks, and implement fit and proper assessments.
- Offer ongoing and/or ad hoc support via retainer, structured advisory, or flexible ad –hoc support agreements.
- Deliver project management for regulatory and compliance projects.
- Support drafting and review of DFSA/FSRA financial returns, including preparation of non-financial returns.
- Manage event driven applications and notifications including changes in control, variations of permission, changes of legal status, and preparation for regulatory inspections and change events.
- Guide the authorisation process helping you obtain a license from the DFSA and/or FSRA depending on your business activities and needs.
- Provide compliance outsourcing serving as your outsourced compliance officer and/or MLRO, ensuring continuity and regulatory confidence.
- Develop policies and procedurest helping you design and implement internal policies that align with the DFSA’s expectations for designated and relevant individuals.
- Deliver training and awareness focused on the expanded Conduct Principles, embedding ethical standards across your organisation.
- Conduct mock regulatory reviews preparing you for DFSA inspections with our simulation-based reviews that identify gaps and benchmark your readiness.
- Offer ongoing compliance monitoring building and refining compliance monitoring programs that proactively manage risk and ensure ongoing adherence.
Whether you’re updating your internal frameworks or preparing for regulatory scrutiny, our ACA Effecta team are here to help you stay ahead. Contact us today to speak with our UAE compliance specialists—we’re ready to support your transition with practical, expert-led solutions.