ABU DHABI 25 October 2020: The cabinet has approved the issuance of a federal decree-law regarding the amendments of some functions of the Central Bank of the UAE (CBUAE), and merging the Insurance Authority (IA), with the Central Bank.
The cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, also issued a federal law by decree regarding the distribution of competencies and authorities between the Securities and Commodities Authority (SCA), and the licenced securities and commodities markets in the country, so that the operational and executive authorities of the SCA are transferred to these markets.
The two resolutions come in the light of the government’s efforts to enhance the performance of financial institutions and support their work through continuous modernisation of the relevant legislative frameworks, in a way that contributes to developing the financial sector, achieving financial growth and stability, and granting the financial markets operational and executive powers that assist them to leverage the market performance level.
Regarding the amendment of the functions of the Central Bank, the decree stipulated merging of the IA with the CBUAE, and transferring all the powers of the authority to the bank, to ensure it works to provide the appropriate environment to develop and boost the role of the insurance industry to support the national economy, encourage fair and effective competition and provide the best insurance services with competitive prices and coverage.
The decree-law also added to the competencies of the Central Bank to regulate, develop and supervise the insurance sector and business, to propose and implement the legislation regulating it, to receive requests for establishing and opening branches and representative offices of insurance and re-insurance companies, agents and related professions, and to issue the necessary licences for them in accordance with the legislations regulating them.
In addition, the bank will protect the rights of the insured and the beneficiaries of the insurance business and monitors the financial solvency of insurance companies, to provide adequate insurance coverage as protection.
It will work to upgrade the performance and efficiency of insurance companies and bind them to the rules of practising the profession and its ethics to increase their ability to provide better services to the beneficiaries of the insurance and achieve positive competition between them.
In a related context, the cabinet issued a decree regarding the distribution of competencies and powers between the SCA, and the licenced stocks and commodities markets.
The decree-law stipulated the transfer of all operational and executive powers and competencies established for the SCA to the licenced securities and commodities markets, while the SCA maintains regulation and oversight of the local financial markets.
To implement its provisions, the decree-law has allowed the boards of directors of the securities and commodities markets, and market managers, to undertake the operational and executive functions that were prescribed for the board of directors of the SCA, and the CEO of the Authority, in the regulations issued by them and according to the circumstances.
The decree stipulated that the SCA must coordinate with the markets, each within its jurisdiction, to transfer all regulations and data related to the market’s implementation of the competencies entrusted to it under the provisions of this decree-law.