The CBUAE has requested that comments on the draft regulations be submitted by October 10
The UAE’s Central Bank is seeking comments and feedback from experts on a draft regulation on loan-based Crowdfunding Platforms CFPS, before it is approved and issued, CBUAE has announced.
In a statement published by the UAE’s state-run WAM news agency, the objective of the proposed regulation is to put in place a framework for licensing, regulating and monitoring loan-based CFPs and to establish standards that the Central Bank will expect them to follow.
These requirements, the CBUAE added, will protect the financial system from the risks posed by CFPs and protect UAE consumers.
The new regulations shall apply to individuals – wherever they are based – engaged in loan-based CFP operations in the UAE, except in financial free zones.
CFPs will be categorised according to their lending volume. Category 1, for example, constitutes CFPs will cumulative loans in a calendar year of above AED 5,000, while category 2 will facilitate cumulative loans below AED 5,000.
Applicants wishing to undertake loan-based CFP activity must apply to the Central Bank for a licence and, if approved, provide a bank guarantee drawn in favour of the CBUAE and issued by a locally-incorporated UAE bank of value equal to the required paid-up capital in addition to other requirements.
The CBUAE is requesting that comments by sent to email@example.com by October 10.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.