UAE Trends and Developments Contributed by: Stefan Mrozinski, Gabrielle Margerison (nee Lowe) and Arnold Krutilins, White & Case LLP
have carefully balanced AML requirements with fostering technological advancement and finan - cial innovation, establishing clear parameters while supporting responsible growth in these high-priority verticals. While these developments are influenced by broad initiatives like the FIT Programme and the Dubai Cashless Strategy, specific regula - tory frameworks have emerged in response. We begin with three key CBUAE regulations: the Open Finance Regulation; the Payment Token Services Regulation; and the Sandbox Condi - tions Regulation. Each represent significant steps toward a more comprehensive fintech ecosystem in the UAE. The Open Finance Regulation In April 2024, the CBUAE issued the Open Finance Regulation, representing a milestone in the implementation of one of the nine key ini - tiatives under the FIT Programme. The Open Finance Regulation marks a significant step in the financial sector as it aligns itself with other financial hubs and has an impact on all existing financial institutions including, but not limited to, banks, branches of foreign banks, payment ser - vices providers and stored value facility provid - ers already licensed by the CBUAE. Under the Open Finance Regulation, financial institutions will open their systems to other insti - tutions and accredited third-party providers to allow the sharing of financial data held by each of the financial institutions in a way that enables innovation and improves customer experiences across the financial services landscape. The secure data sharing framework under the Open Finance Regulation will allow for the develop - ment of new fintech solutions that can leverage customer data from multiple sources, which will
ultimately create more personalised and efficient solutions for customers. In its publications on the Open Finance Regu - lation, the CBUAE has emphasised that the UAE is the first country globally to implement a consolidated trust framework and centralised application programming interface (API) hub, which will enable a single, secure and central - ised, connection to access the whole of the banking and insurance markets. Although other jurisdictions (such as the UK and the EU) have had open banking initiatives in place since 2017, the CBUAE’s approach to data sharing under the Open Finance Regulation is far broader and demonstrates the UAE’s broad commitment to developing its fintech ecosystem and solidify - ing its position as a leading financial innovation centre in the region. Building on this foundation of financial innova - tion, the UAE has also taken significant steps in regulating payment tokens, another critical component of its fintech strategy. The Payment Token Services Regulation In June 2024, the CBUAE published the Pay - ment Token Services Regulation. The Payment Token Services Regulation established a com - prehensive framework for licensing and super - vising digital payment services. This long-await - ed regulation explicitly prohibits the carrying out and promotion of payment token-related activi - ties within the UAE, or directed to persons within the UAE, without obtaining a licence from the CBUAE. The Payment Token Services Regula - tion covers the following key activities: • payment token issuance; • payment token conversion; and • payment token custody and transfer.
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