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DFSA issues first innovative fintech testing licence

Chris Hamblin, Editor, London, 9 November 2017

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The Dubai Financial Services Authority has granted Sarwa Digital Wealth Limited, an automated investment advice service, approval in principle for its Innovation Testing Licence or ITL, as part of an exercise akin to the UK's 'regulatory sandbox.'

The company is based in the Dubai Financial Services Centre and is the first financial technology or fintech operator to receive approval for this special class of licence, which the regulator issues for fintech firms only.     

The DFSA’s ITL is a restricted financial services licence that allows qualifying FinTech firms to develop and test innovative concepts from in the DIFC without being subject to all the regulatory rules that normally apply to regulated firms. It was introduced in May this year, as part of the DFSA’s efforts to promotes economic growth. Sarwa's business proposal has come under enormous scrutiny, as have the appropriate controls for the safety of the customers involved. The company is now striving to become worthy of an ITL.

Sarwa is the first automated investment advice service for young professionals in the Middle East, which combines investment strategies with technology to reduce investment costs. It is among the 12 start-ups to participate in the FinTech Hive at DIFC, the region’s first accelerator scheme that the DIFC set up in partnership with Accenture in January this year.

A 12-week exercise  to facilitate collaboration between cutting-edge technology companies and leading regional and international financial institutions began in August. It is also aimed at regulatory technology or regtech and alternative finance and mobile payments.

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