Hawkamah, the Institute for Corporate Governance, and the Institute of International Finance (IIF), a global association of financial institutions, today announced the launch of the first-ever corporate governance survey of the GCC countries.
Announced during the formal signing of a Memorandum of Understanding between Hawkamah and IIF, the survey will cover all of the GCC countries. The joint mission will meet with regulators, Central Bank authorities, and market practitioners and will produce a report to offer practical guidelines for securities regulators, stock exchange authorities, boards of directors and companies’ management to advance corporate governance in the region.
The MoU with Hawkamah, a subsidiary of Dubai International Financial Centre, aims to propagate corporate sector reforms and improve corporate governance in the MENA region. It outlines four main objectives:
• Improve the corporate governance practices of private and public sector entities, including listed companies, banks and financial institutions, family-controlled enterprises (FCEs), small and medium enterprises (SMEs) and State-controlled enterprises (SCEs). This is aimed at improving their access to affordable credit and capital, increasing their decision-making capacity, operational efficiency and enhancing their reputation.
• Help develop corporate governance frameworks in accord with best practice for the public and the private sectors in order to promote open and transparent markets and a fair, rule-based and enforceable corporate governance regime.
• Co-operate on institution-building, a critical component of sound financial markets, in keeping with good corporate governance practices.
• Cooperate on promoting corporate sector reform in the banking and financial industry in the MENA region and beyond.
Dr Omar Bin Sulaiman, Governor of DIFC, commented: “The Institute of International Finance is a respected association comprising financial institutions from around the world. The DIFC aims to promote regional co-operation and economic integration and, the IIF, with its immense experience, is the ideal partner with which we can achieve our objective.
“This MoU will be a major contributor to the improvement of corporate governance practices in the region. By promoting a higher standard of financial reporting, accounting and regulation, the corporate sector in the GCC can ensure sustained regional economic growth and the attraction of foreign direct investment and trade.
Dr Nasser Saidi, Executive Director of Hawkamah, commented: “One of the key objectives of Hawkamah is to facilitate institution building in the MENA region and implement sustainable Corporate Governance strategies. The corporate governance assessment mission with IIF will allow Hawkamah to create a benchmark on the corporate governance legal and regulatory framework in the GCC countries, and will signal to the world that the region is seriously looking at improving corporate governance as key to expanding and modernizing the Arab market.”
The Institute of International Finance is the world’s only global association of financial institutions with over 350 member organizations from over 60 countries. Members include most of the world’s largest commercial banks and investment banks, as well as a growing number of insurance companies and investment management firms. A number of multinational corporations, trading companies, export credit agencies, and multilateral agencies are associate members of the Institute.
Notes to Editors:
About the DIFC: The Dubai International Financial Centre (DIFC) is an onshore hub for global finance. It bridges the time gap between the financial centres of Hong Kong and London and services a region with the largest untapped emerging market for financial services.
In just over one year, more than a hundred top international institutions have joined the DIFC as members. They operate in an open environment complemented with world-class regulations and standards. The DIFC offers its member institutions incentives such as 100 per cent foreign ownership, zero tax on income and profits and no restrictions on foreign exchange. In addition their business benefits from modern infrastructure, operational support and business continuity facilities of uncompromisingly high standards.
The DIFC is made up of the following core bodies:
1. The DIFC Authority (DIFCA) - Responsible for the Companies and Security Registries and attracting financial as well as non-financial institutions to set up in the DIFC. The DIFC Authority is also responsible for developing the financial services industry. (www.difc.ae)
2. The Dubai Financial Services Authority (DFSA) - An independent, unitary regulatory authority, responsible for the regulation of all DIFC operations. Its principle-based primary legislation is modeled on that used in London and New York, and its regulatory regime operates to standards that meet or exceed those in major financial centres. (www.dfsa.ae)
3. The DIFC Courts - An independent court system set up to uphold the provisions of DIFC laws and regulations, the courts provide comprehensive legal redress in civil and commercial matters within the DIFC. The DIFC Courts system is especially designed to deal with all of sophisticated transactions that will be conducted within DIFC. The DIFC Court laws, based on the common law, not only sets out the jurisdiction of the court but also provides for a dispute resolution services, including arbitration and mediation, thus allowing for the independent administration of justice in the DIFC. ( www.difccourts.ae )
4. DIFC Investments- The creation of DIFC Investments will result in the allocation to it of all non public administration activities previously carried out by DIFC Authority. This will include amongst other things all commercial and other activities such as the operation and management of any current and future subsidiaries, the development of the centre’s investment strategy and relevant policies and any other strategic investments or alliances which will further the goals and objectives of the Dubai International Financial Centre and contribute to the fulfillment of the Centre’s vision. Some of the companies and organizations that DIFC Investments owns include:
1. The Dubai International Financial Exchange (DIFX) The DIFX is the region’s first international financial exchange for equities, bonds, Islamic products, funds, index products and (subject to regulatory approval) derivatives. The target areas of the DIFX for seeking issuers include the Middle East and North Africa, as well as South Africa, Turkey and the Indian sub-continent. The regulator of the DIFX is the Dubai Financial Services Authority. The DIFX is located in the Dubai International Financial Centre (DIFC) and its owner is the DIFC Authority. (www.difx.ae)
2. Hawkamah- the first Institute for Corporate Governance in the region is being set up by a group of international institutions, including the Dubai International Financial Centre (DIFC), Organisation for Economic Cooperation and Development (OECD), UAE Ministry of Finance and Industry, Centre for International Private Enterprise (CIPE), International Finance Corporation (IFC), the Union of Arab Banks (UAB), Dubai School of Government (DSG), Young Arab Leaders (YAL), and the Institute of Management Development (IMD). (www.hawkamah.org)
