The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
As we embark on a new year, we are delighted to share a brief overview of recent legal developments in the UAE’s dynamic financial sector. For a wider overview of legal changes in the MENA region, do take a look at our Eyes on 2024 report.
The 2018 federal law governing the Central Bank was amended to introduce the national digital dirham. The move by the UAE Government is ground-breaking as it makes the UAE one of the first countries in the region, and the world, to permit its central bank to issue a native digital currency as valid legal tender in the UAE. Notably, under this amendment, virtual assets as defined in other UAE laws do not qualify as currency. The UAE Central Bank (“CBUAE”) retains the exclusive authority to issue currency which encompasses digital currency pursuant to the change. Moreover, the CBUAE can open financial accounts for digital currency, set limits and rules, take deposits for monetary authorities in national and foreign currencies and act as an agent for monetary authorities. This marks a pioneering move by the UAE Central Bank. The CBUAE can issue digital currency for denominations of up to AED 50. The change took effect on 1 November 2023.
On 31 October 2023, the UAE published a new corporate bankruptcy law. Effective from 1 May 2024, the existing 2016 bankruptcy law will be repealed. The new law is a refresh of the 2016 law, updating definitions to clarify key concepts, modifying the liability of boards of directors and managers of insolvent companies and expanding the scope of the Financial Restructuring Committee. It creates specific recognition of specialised bankruptcy courts which can supervise insolvencies and security enforcement by secured creditors. Notably, the preventative composition (a strict mechanism under the 2016 law) is replaced with a more user-friendly mechanism known as “Preventative Settlement”. We issued a detailed Client Alert on the new law which can be found here.
Financial institutions are excluded from the new Bankruptcy Law. Instead, the Recovery Planning Regulation has been introduced by the CBUAE. Financial institutions in the UAE (banks, branches of foreign banks and insurance companies) are mandated to establish a recovery plan. The goal of the recovery plan is to equip financial institutions to navigate periods of severe financial challenge and facilitate their recovery. We will be doing a detailed summary of this change in our upcoming client alert.
The CBUAE also recently issued a new Finance Companies Regulation introducing two new license categories. Of particular note is the category of ‘Restricted License Finance Company’, put simply entities providing ‘Buy Now Pay Later’ (BNPL) services. The other category is ‘Agent’ that can provide BNPL services without a license provided that they partner with a finance company or bank in the UAE. Non-licensed entities providing BNPL services had until 27 December 2023 to apply for CBUAE licensing or cease activities altogether.
The Securities & Commodities Authority recently issued an amendment to its regulatory rule book (the “SCA Rulebook”). The amendment introduces a fifth section to the SCA Rulebook focused on anti-money laundering measures and combating the funding of unlawful organisations. SCA license applicants will need to review their proposed anti-money laundering policies and SCA-licensed entities and adjust their internal anti-money laundering policies to ensure compliance. Although the change has not yet been published, we note that it will be effective from the date of its publication. We prepared a detailed Client Alert on the Rulebook Amendment which can be found here.
The fees and available services provided by the Emirates Integrated Registries Company (“EIRC”) were amended on 15 December 2023. Currently, registration on the EIRC costs AED 100. This fee will now start at AED 100 for time periods of: up to 12 months with incremental fees for each category depending on the registration period. Sixteen new additional services are now available for matters such as registration of amendment, extension of registration, the registration of an objection and so on. The new categories and fees will be effective from 27 February 2024. For additional information regarding this topic, please read our recent update here.