The agreement begins a new era of "passporting mutual recognition" as a regulatory mechanism for the promotion and supervision of investment funds and is designed to encourage foreign licensed firms in the financial free zones of other countries to move to the UAE. It contributes to the realisation of one of the main objectives of the SCA, and that is to provide the appropriate environment for the investment of savings and funds in securities in line with the objectives of the country’s economic development.

The SCA, DFSA, and FSRA agreed to apply the same laws in their respective jurisdictions, which ought to help them co-ordinate their efforts in licensing domestic funds once the legislation takes effect. Under the terms of the agreement, each regulator will set up a notification and registration facility to facilitate the promotion and sale of domestic funds to potential investors situated anywhere in the UAE, under a single licence in each case.

The DFSA and FSRA will shortly begin to consultat interested parties about the shape of the new regime.

The SCA regulates the capital markets operating in the UAE, with the exception of financial free zones; the DFSA is the regulator of financial services conducted in or from the DIFC; and the FSRA is the regulator for financial services in or from the ADGM.