Employment Regulations 2022
The Board of Directors of the DIFCA, in the exercise of the powers conferred on them by Article 9(1) of the Employment Law DIFC Law No. 2 of 2019 and also pursuant to the requirements of Article 66 of the Law, hereby make these Regulations.
1. — INTRODUCTION
1.1 — Application and interpretation
1.1.1 These Regulations apply to: (a) Employers and Employees; (b) any person who is an Operator of a Qualifying Scheme; and (c) any other person to whom the Law applies.
1.1.2 Defined terms are identified throughout these Regulations by the capitalisation of the initial letter of a word or phrase. Where capitalisation of the initial letter is not used, an expression has its natural meaning.
1.1.3 The following defined terms have the meaning given below:
| Defined Term | Definition |
|---|---|
| Annual Contribution Cap | The maximum aggregate amount of Contributions that may be paid into a Qualifying Scheme in respect of a Member in any Plan Year, as specified in the Rules of the Qualifying Scheme. |
| Approved Service Provider | A person who is licensed by the DFSA to provide financial services in the DIFC and who is approved by the DIFCA to provide services to a Qualifying Scheme. |
| Authority | The Dubai International Financial Centre Authority. |
| Benefit | Any payment or transfer of funds from a Qualifying Scheme to or for the benefit of a Member or their Beneficiaries. |
| Beneficiary | A person designated by a Member to receive Benefits from a Qualifying Scheme upon the Member's death. |
| Board of Directors | The Board of Directors of the Authority. |
| Contribution | Any amount paid into a Qualifying Scheme by an Employer or a Member. |
| DEWS | The DIFC Employee Workplace Savings Scheme established by the Authority. |
| DFSA | The Dubai Financial Services Authority. |
| DIFC | The Dubai International Financial Centre. |
| DIFCA | The Dubai International Financial Centre Authority. |
| Employee | An individual who is employed by an Employer in the DIFC. |
| Employer | A person who employs an Employee in the DIFC. |
| Employment Law | DIFC Law No. 2 of 2019, as amended from time to time. |
| Investment Option | A specific investment fund or portfolio offered by a Qualifying Scheme for Members to invest their Contributions. |
| Law | The Employment Law DIFC Law No. 2 of 2019. |
| Member | An Employee who is a member of a Qualifying Scheme. |
| Member Account | An individual account within a Qualifying Scheme that holds the Contributions and investment returns attributable to a specific Member. |
| Operator | The person responsible for the administration and operation of a Qualifying Scheme. |
| Participating Employer | An Employer who participates in a Qualifying Scheme. |
| Plan Year | The 12-month period commencing on the date a Qualifying Scheme is established and each subsequent 12-month period thereafter. |
| Qualifying Scheme | A scheme that meets the requirements of Article 66 of the Law and these Regulations. |
| Rules | The governing document of a Qualifying Scheme, which sets out its terms and conditions. |
| Supervisory Body | The body or entity responsible for the oversight and regulation of a Qualifying Scheme. |
| Transfer Value | The value of a Member's accrued Benefits in a Qualifying Scheme that is transferred to another Qualifying Scheme or a Recognised Scheme. |
| Recognised Scheme | A scheme recognised by the Authority as meeting certain standards for the transfer of Benefits. |
| Withdrawal Event | An event specified in the Rules of a Qualifying Scheme that triggers a Member's entitlement to withdraw Benefits, such as termination of employment or retirement. |
1.2 — References to writing
1.2.1 Any reference in these Regulations to writing or written includes any electronic communication that is capable of being reproduced in a legible form.
2. — QUALIFYING SCHEME REQUIREMENTS
2.1 — Qualifying requirements
2.1.1 A Qualifying Scheme must meet the following requirements: (a) it must be established and operated in accordance with the Law and these Regulations; (b) it must be licensed by the DFSA to provide financial services in the DIFC, or be otherwise approved by the DIFCA; (c) it must have a Supervisory Body responsible for its oversight and regulation; (d) it must have Rules that are clear, comprehensive, and consistent with the Law and these Regulations; (e) it must provide for the payment of Contributions by Participating Employers and Members; (f) it must provide for the investment of Contributions in a range of suitable Investment Options; (g) it must provide for the payment and transfer of Benefits to Members or their Beneficiaries; (h) it must ensure that Members receive regular statements and information about their Member Accounts and Investment Options; (i) it must have adequate administrative and operational procedures in place to ensure its efficient and effective functioning; (j) it must have a robust complaints handling procedure; (k) it must maintain proper books and records; and (l) it must comply with all applicable anti-money laundering and counter-terrorist financing laws and regulations. 2.1.2 The DIFCA may impose additional requirements on a Qualifying Scheme as it deems necessary to ensure the protection of Members and the integrity of the DIFC financial system.
2.2 — Supervisory Body and oversight
2.2.1 The Supervisory Body of a Qualifying Scheme must be: (a) the DFSA; or (b) a body or entity approved by the DIFCA to act as a Supervisory Body. 2.2.2 The Supervisory Body must: (a) oversee the operation and administration of the Qualifying Scheme; (b) ensure that the Qualifying Scheme complies with the Law, these Regulations, and its Rules; (c) protect the interests of Members; and (d) have adequate powers and resources to carry out its responsibilities.
3. — MEMBERSHIP
3.1 — Membership requirements
3.1.1 An Employee who is employed by a Participating Employer must be a Member of the Qualifying Scheme. 3.1.2 An Employee may only be a Member of one Qualifying Scheme at any given time. 3.1.3 The Rules of a Qualifying Scheme must specify the eligibility criteria for membership, including any minimum age or service requirements.
3.2 — Member Accounts
3.2.1 Each Member must have an individual Member Account within the Qualifying Scheme. 3.2.2 The Member Account must hold the Contributions and investment returns attributable to that Member. 3.2.3 Members must be able to access information about their Member Accounts, including their balance, investment performance, and transaction history.
4. — CONTRIBUTIONS
4.1 — Member Contribution requirements
4.1.1 Participating Employers must make Contributions to the Qualifying Scheme on behalf of their Employees in accordance with the Law and these Regulations. 4.1.2 Members may also make voluntary Contributions to their Member Accounts, subject to the Rules of the Qualifying Scheme and any applicable Annual Contribution Cap. 4.1.3 Contributions must be paid into the Qualifying Scheme in a timely manner, as specified in the Rules of the Qualifying Scheme.
4.2 — Participating Employer duties
4.2.1 A Participating Employer must: (a) deduct Contributions from the salaries of their Employees in accordance with the Law and these Regulations; (b) remit all Contributions to the Qualifying Scheme in a timely manner; (c) provide the Operator with all necessary information to administer the Qualifying Scheme, including details of Employees, their salaries, and Contributions; and (d) comply with all other obligations set out in the Law, these Regulations, and the Rules of the Qualifying Scheme.
4.3 — Non-payment of Member Contributions
4.3.1 If a Participating Employer fails to pay Contributions in accordance with the Law, these Regulations, or the Rules of the Qualifying Scheme, the Operator must: (a) notify the Participating Employer of the non-payment and request immediate payment; (b) if payment is not received within a reasonable period, notify the DIFCA and the Supervisory Body; and (c) take all reasonable steps to recover the unpaid Contributions, including pursuing legal action if necessary.
5. — PAYMENT AND TRANSFER OF BENEFITS
5.1 — Payment of Benefits
5.1.1 Benefits from a Qualifying Scheme may only be paid to a Member or their Beneficiaries upon the occurrence of a Withdrawal Event. 5.1.2 The Rules of a Qualifying Scheme must specify the types of Withdrawal Events, the procedures for claiming Benefits, and the methods of payment. 5.1.3 Benefits must be paid in a timely manner following a valid claim.
5.2 — Transfer of Benefits
5.2.1 A Member may transfer the value of their accrued Benefits in a Qualifying Scheme to another Qualifying Scheme or a Recognised Scheme. 5.2.2 The Rules of a Qualifying Scheme must specify the procedures for transferring Benefits, including any fees or charges that may apply. 5.2.3 The Operator must facilitate the transfer of Benefits in a timely and efficient manner.
6. — INVESTMENT REQUIREMENTS
6.1 — Investment directions
6.1.1 Members must be given the opportunity to direct the investment of their Contributions across a range of suitable Investment Options offered by the Qualifying Scheme. 6.1.2 The Investment Options must be diversified and appropriate for different risk profiles. 6.1.3 The Operator must provide Members with clear and comprehensive information about each Investment Option, including its investment objectives, risk profile, and historical performance.
6.2 — Information to be provided to Members
6.2.1 The Operator must provide Members with regular statements, at least annually, detailing: (a) the balance of their Member Account; (b) the investment performance of their chosen Investment Options; (c) all Contributions made during the period; (d) all Benefits paid or transferred during the period; and (e) all fees and charges deducted from their Member Account. 6.2.2 The Operator must also provide Members with access to educational materials and tools to help them make informed investment decisions.
7. — QUALIFYING SCHEME FEES AND CHARGES
7.1 — Investment charges and fees
7.1.1 All fees and charges associated with the investment of Contributions must be clearly disclosed to Members. 7.1.2 These fees and charges must be reasonable and competitive. 7.1.3 The Operator must ensure that Members are not subject to excessive or hidden fees and charges.
7.2 — Plan administration and fees
7.2.1 All fees and charges associated with the administration of the Qualifying Scheme must be clearly disclosed to Members. 7.2.2 These fees and charges must be reasonable and competitive. 7.2.3 The Operator must ensure that Members are not subject to excessive or hidden administrative fees and charges.
7.3 — Disinvesting units towards fees and charges
7.3.1 The Rules of a Qualifying Scheme must specify how fees and charges will be deducted from Member Accounts, including whether units will be disinvested to cover such costs. 7.3.2 The Operator must ensure that the method of deducting fees and charges is fair and transparent.
8. — APPLICATIONS
8.1 — Application and ongoing compliance
8.1.1 Any person seeking to establish a Qualifying Scheme must submit an application to the DIFCA in the form and manner prescribed by the DIFCA. 8.1.2 The application must include all information and documents required by the DIFCA to assess whether the proposed scheme meets the requirements of the Law and these Regulations. 8.1.3 The DIFCA may grant or refuse an application, or grant it subject to conditions, as it deems appropriate. 8.1.4 A Qualifying Scheme must continuously comply with the Law, these Regulations, and its Rules. 8.1.5 The DIFCA may revoke the status of a Qualifying Scheme if it fails to comply with any of these requirements.
8.2 — Deemed Qualifying Scheme status for DEWS
8.2.1 The DEWS is deemed to be a Qualifying Scheme for the purposes of the Law and these Regulations.
8.3 — Qualifying Scheme List
8.3.1 The DIFCA will maintain a list of all approved Qualifying Schemes, which will be published on its website.
8.4 — Delegation
8.4.1 The DIFCA may delegate any of its functions or powers under these Regulations to any other person or body, subject to such conditions as it deems appropriate.
SCHEDULE 1 - FEES 1.1 The DIFCA may charge fees for: (a) the application for Qualifying Scheme status; (b) the ongoing supervision of a Qualifying Scheme; and (c) any other services provided by the DIFCA in relation to Qualifying Schemes. 1.2 The amount of such fees will be determined by the DIFCA and published on its website.