INSITE - UAE- Feb 2025
- sukhwinder21
- Mar 21
- 3 min read
DIFC ANNOUNCES CONSULTATION FOR AMENDMENTS TO SELECT DIFC LEGISLATION THROUGH DIFC LAW AMENDMENT LAW
Summary: The Dubai International Financial Centre (DIFC), a leading global financial hub in the Middle East, Africa, and South Asia (MEASA) region, has proposed amendments to select legislation through the DIFC Laws Amendment Law, Law No. 1 of 2025. These amendments primarily serve a clarificatory purpose, ensuring that DIFC laws remain aligned with international best practices. Notably, the proposed changes to the Data Protection Law introduce enhanced protections and expanded rights of action for data subjects within the DIFC.
In Detail:Â The Dubai International Financial Centre Authority (DIFCA) proposes amendments to the following laws through the DIFC Laws Amendment Law No. 1 of 2025 (the "DIFC Amendment Law") (collectively, the "Proposed Legislation"):
(a) Data Protection Law (DIFC Law No. 5 of 2020)
(b) Law of Security (DIFC Law No. 4 of 2022)
(c) Insolvency Law (DIFC Law No. 1 of 2019)
(d) Employment Law (DIFC Law No. 2 of 2019)
Proposed Amendments to the Data Protection Law
DIFCÂ proposes amendments to the Data Protection Law to:
ensure that DIFC data subjects receive full protection under the law, regardless of where their data is processed, reinforcing the extra-territorial reach of the legislation.
enable the commissioner to reassess the adequacy framework for evaluating third countries' suitability for receiving personal data. Additionally, ensure that government-processed personal data is protected, with appropriate redress mechanisms available for data subjects.
grant data subjects the right to pursue legal action through the DIFC Courts if their personal data is processed in violation of the law, thereby enhancing rights and remedies available to affected individuals.
Proposed Amendments to The Law of Security
DIFCA proposes amendments to Part 8 (Financial Collateral Arrangements) and Part 9 (Conflict of Laws) of the Law of Security in response to market participants' queries seeking clarity on financial collateral matters.
These amendments aim to further align the DIFC’s legal framework for financial collateral arrangements with international best practices. Specifically, the revised regime will better reflect the frameworks established in European Union member states under Directive 2002/47/EC on Financial Collateral Arrangements (the "Financial Collateral Directive") and in the United Kingdom under SI 2003/3226 – The Financial Collateral Arrangements (No.2) Regulations 2003 (as amended).
Proposed Amendments to the Insolvency Law
DIFCA proposes amendments to Part C of the Insolvency Law to clarify the definition of Security Right.
Currently, the term "Security Right" in the Insolvency Law adopts the meaning provided in the Law of Security. This inadvertently excludes security interests over immovable assets, such as real estate, which are instead governed by the DIFC Real Property Law (DIFC Law No. 10 of 2018) rather than the Law of Security.
To address this issue, DIFCA proposes clarifying the definition of "Security Right" to ensure it explicitly covers both moveable and immovable assets, providing greater legal certainty for secured creditors and stakeholders.
Proposed Amendments to the Employment Law
DIFCA proposes a clarificatory amendment to Part D of the Employment Law in response to employer queries regarding Qualifying Scheme contributions for GCC Nationals.
In March 2024, Part 10 of the Employment Law was updated under DIFC Law Amendment Law No. 1 of 2024, requiring DIFC employers to contribute to a Qualifying Scheme for GCC Nationals. Specifically, if the amount an employer would have paid into a Qualifying Scheme for a non-GCC National exceeds the employer’s contribution to the General Pension and Social Security Authority (GPSSA) for a GCC National Employee, the employer must pay the difference into a Qualifying Scheme. This obligation applies only if the shortfall exceeds $1,000.
To provide further clarity, Article 66(7)(c)(ii) has been amended to confirm that the required contribution for GCC Nationals is calculated based on the employer’s GPSSA contributions for the employee and not on any amounts the employee personally contributes to the GPSSA.
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