Dubai Financial Services Authority finalises client assets regime reforms with rules effective from 1 January 2026

The Dubai Financial Services Authority has issued a Feedback Statement on Consultation Paper No. 160 on updates to its Client Assets regime and published the final rule amendments across the General Rulebook, Conduct of Business Module, Collective Investment Rules, Glossary, Auditor Module and Market module. The package confirms several targeted changes from the consultation, including a new “Client Assets crisis preparedness pack”, revisions to reconciliations and audit-related reporting, and refinements to requirements around third party agents and client disclosures. Key outcomes include clarifying that assets constituting Fund Property fall outside “Client Assets”, meaning a DFSA Authorised Firm acting solely as an investment manager under delegation (including sub-delegation) would not be subject to the Client Assets rules or need a Client Asset endorsement; the exclusion also applies to Fund Property of Foreign Funds managed under delegation, with firms expected not to suggest DFSA client asset protections apply where they do not. The new crisis preparedness pack applies only where firms “hold” Client Assets under COB rule 6.11.4(a)-(c), can be integrated into existing business continuity and disaster recovery plans if all required information is included, must be updated within a maximum of five business days after a change, and the update trigger no longer turns on materiality. For auditor-related changes, the DFSA dropped the proposal to have auditors opine on whether firms took “appropriate action” to rectify material reconciliation discrepancies, but introduced a requirement for firms to report to the DFSA within 30 days on remedial steps for all auditor findings (removing “materiality” from the scope) and clarified that rectification is not expected to be completed within that 30-day window. Reconciliation frequency for both Client Investments and Client Money is updated to at least monthly, while the proposal to require monthly Client Investment reporting to Professional Clients was not taken forward; third party agent suitability assessment expectations are reinforced through rules and supporting guidance, including on documentation, creditworthiness and principle-based diversification, and client disclosures are refocused on relevant aspects of the insolvency regime in the third party agent’s jurisdiction. The DFSA granted a longer transition period by applying the 1 January 2026 effective date to all new rules, and expects Authorised Firms and Registered Auditors to prepare in time to comply from that date.