Dubai Financial Services Authority Announces Fintech Innovation Testing Program Expansion

The Dubai Financial Services Authority (DFSA) announced on Wednesday the expansion of its Innovation Testing Licence (ITL) programme in response to continued interest in fintech and the digital economy. According to DFSA, the ITL program enables firms to test innovations in fintech in or from the Dubai International Financial Centre (DIFC).

The program was reportedly introduced by the DFSA in May 2017, as part of its strategy to foster an innovation-friendly ecosystem in the DIFC. The restricted financial services license allows qualifying FinTech firms to develop and test innovative concepts from within the DIFC, without being subject to the full regulatory requirements that normally apply to regulated firms.

The DFSA also reported that six companies will form a new Cohort (Cohort 1) that will today begin the ITL application process, which includes the development of a regulatory test plan describing the proposed business model, product or service. Over the next few weeks, the DFSA will reportedly work with the applicants to navigate the on-boarding process. Should the firms be successful, they will begin a testing period lasting up to 12 months, at the end of which the firms must demonstrate that they have met the agreed targets of the test plan, and can meet the full DFSA authorization requirements, to obtain a full license. Bryan Stirewalt, Managing Director of Supervision at the DFSA, stated:

“Since introducing the ITL in May last year, we have been impressed with the volume of applications from firms wanting to test from the DIFC. This is clearly indicative of the value they place on the established ecosystem available to them here. Although a number of firms have already been granted an ITL, in order to provide the necessary support to these applicants, we have introduced the Cohort approach to reviewing applications and believe this will provide the best outcome for firms with hopes of contributing to the Dubai and UAE economy.”

The Cohort 1 Applicants include:

  • Bridg: one of the Middle East’s first FinTech startups and is building a software-based payment solution that allows smartphones to process face-to-face transactions without the need to be connected to the internet.
  • Delio: A company that’s creating a digital ecosystem to enable deal providers to showcase investment opportunities in private assets to both institutional and private investors.
  • Fastnet: A fintech adviser that aims to link risk profiling with simple, liquid, low-cost investment solutions. The company’s focus is on developing a detailed understanding of the client, by helping investors truly understand how their financial personality affects their investment outcomes, providing investors with the tools to manage their wealth with confidence.
  • HedgeSPA: Offers Predictive Analytics to hedge funds and institutions. The company’s mission is to democratize access to advanced investment analytics for large institutions and sophisticated investors. HedgeSPA’s core platform, powered by artificial intelligence, big data, and cloud computing, empowers professional investors with asset selection.
  • MarketsFlow: A machine Learning and AI-based Intelligent Robo Advisor and Digital Wealth Management platform. It offers customised portfolio strategies that are suitable to the client. The platform allows clients to manage their assets actively on a daily basis, inclusive of rebalancing, readjustments, and risk management.
  • Jibrel Network: A Swiss blockchain development company, will be developing a UAE-specific financial services blockchain solution, to enable the deployment of virtual mobile accounts. Jibrel’s implementation will include consumer protection, awareness and support – as well as compliance / risk management and mitigation capabilities.

The DFSA added that the Cohort 2 applications will open in September to coincide with the second edition of the DIFC’s FinTech Hive@DIFC accelerator program.

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