DFSA launches consultation on changes to Islamic finance rules

The Dubai Financial Services Authority (DFSA) has set out plans to enhance the regulatory framework for Islamic finance in the DIFC.

In a public consultation, launched yesterday (5 May), the DFSA proposed measures to strengthen regulatory guidance on Islamic endorsement requirements, specifying circumstances in which Authorised Persons can be considered as conducting Islamic financial business. These include:

• Authorised Persons indicating that they conduct all or part of their business operations in accordance with Shari'a
• Authorised Persons providing financial services in relation to products presented as Islamic or Shari'a-compliant
• Fund managers operating funds held out as Islamic or Shari'a-compliant

The proposals also clarify that Authorised Persons simply providing access to or distributing Islamic financial products – without making representations about Shari'a compliance – would not require an endorsement, provided that they meet existing client protection obligations.

The DFSA is also seeking to strengthen Takaful disclosures for consumer protection, proposing that all Takaful sales must include specific disclosures about contract features, fee calculations, surplus-sharing arrangements, and potential additional contributions, whether the Authorised Person has an Islamic endorsement or not.

Charlotte Robins, managing director, policy and legal, at the DFSA, said: “As the Islamic finance sector continues its strong growth trajectory within DIFC, the United Arab Emirates, and globally, we want to ensure that our regulatory framework provides the clarity and certainty that firms need to operate confidently within appropriate boundaries.

“These proposals reflect our ongoing engagement with the industry and our commitment to supporting the development of this strategically important sector.”

The consultation runs until 19 June 2026. The DFSA will then review all submissions and make appropriate changes to the DFSA Rulebook.