The UAE's Securities and Commodities Authority has surprised the industry by suspending all renewals of foreign investment funds aimed at the public until further notice, a source with knowledge of the matter told International Investment.
The regulator cited evolving market practices and the need to review regulations for updates as its reasoning for the move, the source revealed.
While this had prompted the suspension of ‘foreign investment funds to public', the SCA is allowing any registration of private funds to continue.
In early reaction, Nigel Silitoe, CEO of consultancy Insight Discovery, said: "This announcement has come out of the blue and is starting to reverberate around the funds industry in the UAE.
"To early to determine what the impact will be however investment managers who have funds already registered with the SCA will be mightily relieved."
Tom Bicknell, partner at Pinsent Masons also gave his initial response to the news: "So it seems SCA has closed registration to public offering of foreign funds. Whilst no explanation has been provided it seems that they have been dealing with an influx of foreign funds and are driving the domestic funds market. So now seeking to limit the registration of foreign funds."
