UAE -Visit of The Lord Mayor of the City of London
Published 5 February 2015
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0.1 This publication was archived on 5 August 2016.
This article is no longer current. Please refer to Overseas Business Risk - United Arab Emirates.
1. Summary
The Lord Mayor visited Dubai and Abu Dhabi to promote the UK’s financial and professional services and sustain and build relationships with key institutions in the UAE. He came as Abu Dhabi’s new financial freezone looks to get off the ground and Dubai’s ten year old equivalent expands. Discussion of market access, global economic shifts and the oil price.
2. Detail
The Right Honourable the Lord Mayor of the City of London, Alderman Alan Yarrow, visited Dubai and Abu Dhabi on the 25th and 26th January respectively. Dubai
The Lord Mayor met Sheikh Ahmed bin Saeed al Maktoum, Chairman of Emirates Group, as well as key stakeholders from Dubai International Finance Centre (DIFC), DIFC Courts and Dubai Financial Services Authority (DFSA). Essa Kazim, Governor of the DIFC, set out plans for the continuing growth of this financial freezone. With western financial institutions well represented, they were looking to attract more business from Asia. China’s four largest banks now all had DIFC branches. Bringing business from Asia provides good opportunities for the 50 plus regulated British institutions in the DIFC. Another area of DIFC expansion relevant to the UK is the insurance market.
Nasdaq Dubai, a DIFC exchange, is continuing its push to be the centre for global sukuk issuance with $13bn issued in 2014.. The sukuk market in Dubai remains strong, as it taps into a great deal of liquidity within the region, and so there is less difference in pricing causing a $150bn gap in supply versus demand.
At DIFC Courts the Lord Mayor met Sir John Chadwick, Deputy Chief Justice, and Sir David Steel, one of the senior judges. The Lord Mayor received an update on DIFC relations with other courts, including the successful enforcement of their judgements in the UK. They also set out the imminent creation of a non-Muslim Wills and Probate Registry in the DIFC which will be unique in the region and will allow expats to register trusts outside of the jurisdiction of Sharia courts.
Onshore in Dubai, a large increase in IPOs in the UAE suggests the potential for growth in this area with $3.74bn launched in 2014 and a backlog of companies now waiting to list.
2.1 Abu Dhabi
The Lord Mayor delivered one of the keynote speeches at the 9th GCC Regulatory Summit on the importance of professionalism and education, training and qualifications (ETQ) within the regulation sector. The Lord Mayor spoke alongside the UAE Minister of Economy and Chairman of Abu Dhabi Global Markets (ADGM, the new Abu Dhabi financial and professional services freezone, in the process of being set up).
In the subsequent meeting with the Minister of the Economy, there was discussion on the increased need for diversification in light of the oil price decrease. The Minister welcomed the Lord Mayor’s offer of UK assistance in developing a strong SME market, adequate bankruptcy and dispute resolution legislation, and structured development of the Islamic Finance sector.
The Deputy Governor of the UAE Central Bank (CB) led his team in a lively discussion focused on money laundering, terrorist financing and recent regulatory and economic developments.
A meeting with Chairman of ADGM, which is in the process of creating its regulatory environment, produced a number of action points and demonstrated the commitment of the UK to support this new offshore centre. The Lord Mayor will host the Chairman at the Guildhall during “City Week” in London in March with key UK financial firms who are interested in ADGM. ADGM aims to apply English Common Law directly . The first companies are expected to move in by September 2015.
2.2 Events
The Lord Mayor attended a number of events across both Emirates. In Dubai a lunch hosted by Thomson Reuters, an ICAEW/Chartered Institute for Securities and Investment event on oil price correction, and a Dubai Cass Business School reception. In Abu Dhabi, a lunch with senior figures from the Financial Services Working Group of the UK-UAE Business Council as well as the GCC Regulatory Summit . In the evenings the Lord Mayor attended dinners hosted by the British Business Groups in Dubai and Abu Dhabi. Through these events, the Lord Mayor was able to reach several hundred financial service professionals and leaders and reinforce the UK’s pre-eminence in this sector.
3. Comment
The visit drew out a number of opportunities to be pursued, particularly in the new ADGM financial freezone where UK companies are already showing interest. UKTI and the City will look to take this forward with ADGM to offer support for project delivery and bringing UK companies into the market.
The visit of the Lord Mayor came at an interesting time given recent economic developments. The general sentiment throughout the visit was that current prices will actually help drive diversification, particularly in the SME sector.
4. Disclaimer
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