The responsibilities, powers and authority of the AFSA are set out in the Article 12 of the Constitutional Statute as follows:
- to develop draft AIFC Acts relating to the regulation of financial services and related activities in the AIFC;
- to adopt Acts, in the form of regulatory provisions, on matters related to the regulation of financial services and related activities in the AIFC;
- to conduct the registration, recognition and Licensing of AIFC Participants;
- to keep registers of AIFC Participants;
- to exercise control and supervision over the activities of AIFC Participants and take appropriate measures in relation to them;
- to exercise other powers determined by resolutions of the Council.
AFSA is the integrated regulator with the following functions:
- Regulated and Market Activities – covering the financial services that Centre Participants may offer after obtaining their licence - including banking, insurance, capital markets, Islamic finance, as well as market-related investment exchanges and clearinghouses;
- Ancillary Services – covering those professional services that are ancillary to, but necessary for, the proper functioning of the financial services industry and capital market, including audit, accounting, legal, consulting and credit rating agencies, and;
- Corporate Registration – Administering the registration functions of AIFC companies.
In performing its functions and exercising its powers, the AFSA will pursue the following
- the regulation, control and supervision of financial activities in the AIFC by Centre Participants with a view to the maintenance of the safety and soundness of the financial system within the AIFC;
- ensuring that financial markets in the AIFC are fair, efficient, transparent and orderly;
- creating fair, transparent and non-discriminatory conditions for Centre Participants;
- fostering and maintaining confidence in the AIFC’s financial system and regulatory regime;
- fostering and maintaining the financial stability of the AIFC’s financial services industry and capital markets, including the reduction of systemic risks;
- preventing, detecting and restraining actions that may cause damage to the reputation of the AIFC or to the financial activities carried out in the AIFC by taking appropriate measures, including by imposing sanctions;
- protecting interests of investors and users of financial services;
- implementing in the AIFC a regulatory regime that complies with international standards in the sphere of regulation of financial services;
- fostering the development of financial technologies in the AIFC;
- pursuing such other objectives as may be specified by AIFC’s Regulations from time to time.
AFSA provides prudential regulation and seeks to ensure that licensed Centre Participants are financially sound and will monitor and mitigate institutional and systemic financial risk, including incidents of economic shock and financial disruption.
AFSA supervises firms and their employees in the context of monitoring both individual and institutional integrity and ensuring high standards of conduct. It regulates corporate governance in Centre Participants and has authority over their directors and key employees who are approved by AFSA to carry out designated functions. AFSA applies the standards of the Financial Action Task Force (FATF) on the regulation of money laundering and terrorist financing.
AFSA enforces its rules by taking robust and timely action against those who do not comply with their responsibilities.