Pepperstone, an Australian FX and CFDs broker, is seeking a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary, Pepperstone Financial Services (DIFC) Limited, in the Dubai International Financial Center (DIFC).
The DIFC’s website shows that the registration status of the new spin-off is ‘Active’ while its regulatory application is ‘Pending DFSA Authorization.’
Organizing the effort on behalf of the Melbourne-based firm, according to its listed directors with the DIFC, has been a small team headed by Tamas Robert Szabo (Group CEO and business owner), Gordon Bruce Buchanan (Pepperstone CFO) and Tarik Chebib, who has spent the past 15 months as the broker’s head of Middle East.
The team has secured office space for the new operation in Dubai’s Index Tower at Dubai International Financial Centre. However, it’s not clear if any executives have joined Tarik or relocated to the UAE to oversee the new operations.
If approved, this new license will allow Pepperstone to provide its range of FX and CFDs products to retail and professional clients not only from the UAE, but also to expand the offering to the other GCC states, meaning Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and North Africa.
Pepperstone’s other subsidiaries already hold financial licenses from the UK FCA and the Australian ASIC, and also has several representative offices in other countries.
Dubai Forex license is complicated
The Dubai International Financial Centre (DIFC) is a federal area that is financially-free, completely separated from the rest of the country and features its own legal system and courts.
The DFSA has been receiving increased interest from authorized firms and global brokers to offer FX trading to retail customers in or from the DIFC.
Within Dubai’s International Financial Centre, the DFSA is the regulatory authority that issues all Forex Broker licenses and regulates all financial and subsidiary services conducted.
However, the DFSA has very strict guidelines in place for obtaining a Dubai forex license, as well as for conducting forex business. Specifically, obtaining a Dubai forex license is a complicated procedure that involves many legal limitations that revolve around the country’s prohibitions on banking activity in the local currency as transactions in UAE Dirhams are strictly prohibited in the center.
Other than AML compliance, FX brokers also need to have systems and controls such as intra-day and end-of-day counterparty and settlement limits, segregation of functions, and other risk measures.
