The Regulatory Playbook: Dubai Did It First, But Cyprus Can Still Do It Best

Dubai’s regulators may have had the luxury of starting on ablank sheet of paper: it attracted and utilised talent and knowledge fromexperienced professionals that worked in more mature supervisory bodies and is also being able to take any direction it considers optimal for the jurisdictionsshort, medium and long-term. Cyprus, an EU member state, by contrast, must fitinto the ever-thickening EU rulebook of PSD2, MiFID II, MiCA and theAnti-Money-Laundering Package. Yet a different starting point is no longer anexcuse for Cyprus, not to aim for the same destination of hyper-scale inhyper-responsible manner – even if not at the hyper-speed of the UAE. TheCyprus Securities and Exchange Commission (CySEC) and the Central Bank ofCyprus (CBC) can still import the best UAE mechanics - without breaching EU discipline. In fact, the Abu Dhabi Global Market (ADGM) and theDubai International Financial Centre (DIFC) have a proven playbook that Cyprus could implementimmediately. 1. Rolling-Review Sandboxes I call these “license while you build”. The DIFC’s Innovation Testing Licence (ITL) grants aprovisional permit , then reviews progress in 30- to 90-day bursts while theproduct is still being coded. If the firm meets pre-agreed KPIs—say, daily VaRbelow 0.5 %—the licence automatically graduates to full status. ADGM’s RegLabtakes the same “test-and-learn” approach, giving supervisors live dashboardsinstead of static PDFs. CySEC’s own sandbox Sandbox A sandbox is a commonly deployed term in the fintech universe, referring to a mechanism for developing regulation that keeps up with the fast pace of innovation.In scope of the computer science world, a sandbox is also associated with a closed testing environment that designed for experimenting safely with web or software projects.Sandboxes are very important to the regulatory field, though is also utilized within the digital economy space.The first regulatory sandbox was launched in the United A sandbox is a commonly deployed term in the fintech universe, referring to a mechanism for developing regulation that keeps up with the fast pace of innovation.In scope of the computer science world, a sandbox is also associated with a closed testing environment that designed for experimenting safely with web or software projects.Sandboxes are very important to the regulatory field, though is also utilized within the digital economy space.The first regulatory sandbox was launched in the United Read this Term , is the perfect canvas to adopt truerolling reviews rather than one-off “letters of comfort”. A phased licencealigned to EU proportionality principles would reduce time-to-market withoutrelaxing investor protection. Dubai’s financial regulator has introduced an Innovation Testing License, giving fintechs room to experiment in a simplified regulatory sandbox within the DIFC. pic.twitter.com/VmwiIJjYCv 2. Risk-Based Licence Paths VARA and the DFSA calibrate capital, disclosure and auditdepth to business-model risk: a low-volume advisory gets lighter scrutiny thana leveraged derivatives venue. Cyprus still funnels most applicants— CFDbrokers , EMI start-ups, crypto custodians—through a single process that canexceed 12 months. A better approach? Publish a CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term and a CBC “risk matrix”:green channel (advisors, no leverage, no clients’ funds), amber (spot crypto, PISPs/AISPs),red (margin products, algorithmic venues). Such a riskmatrix policy is entirely EU-compatible: for example, Article 7 of MiCA andRecital 15 of PSD2 already endorse proportionality. 3. Real-Time Supervisory Data ADGM’s Digital Lab lets regulators pull API data—latency,order-book depth, margin calls—in almost real time, replacing quarterlyspreadsheets with heat-maps. Cyprus should mandate API-based risk streams into CySEC’sand CBC’s new RegTech back-ends. Nothing in EU law bars this; in fact, ESMA’s2024 supervisory convergence report calls for “machine-readable” submissions.Faster anomaly detection protects retail traders and burns less supervisorymanpower, that could be focused on initiatives such as those listed in here. You may also like: Cyprus FX Exec Pay Drops, Compliance Salaries Soar; Dubai Stays Lucrative The Need for an Ongoing Discussion Further, the regulators in Cyprus should implement proper channels to remain in touch andconnected to the industry and gather real insights for further improvement. Dubai’sregulators hold monthly, agenda-free roundtables where supervisors, foundersand investors debate edge-case scenarios before they become headlines. Theconversations de-risk policy drafts and reduce lobbying friction. Cyprus could institute majlis focused on hot topics—AItrading signals, finfluencer marketing, DeFi staking. Minutes published in nearreal time would raise transparency and pull private-sector expertise intofirst-draft legislation. The CySEC must be compliant with the requirements of the pan-European financial market regulator. However, the suggestions to mimic the UAE playbook would not violate any of the pan-European rules . Read more: FCA Warns Tech Firms Not Doing Enough to Stop Illegal Forex Finfluencers Brussels is not the barrier - inertia is: Phased sandboxes are already embedded in ESMA’s 2023 FinTech Guidelines. Risk-weighted reviews mirror the EBA’s SREP methodology for banks. RegTech APIs align with the Digital Operational Resilience Act’s call for continuous monitoring. Stakeholder forums echo the Commission’s new structured-dialogue approach used in the 2024 instant-payments package. And there some obvious pay-offs on implementing these measures. It can even directly uimpact the efficiency of the licencing regime. Speed – Rolling reviews could halve the median licence timeline from 12 (or more) months to six without loosening prudential screws. Safety – Live risk data, and early-warning majlis sessions shrink the window for consumer harm and market abuse. Signal to founders – A publicly documented fast lane tells the next wave of PSPs, brokers and tokenisation platforms that Cyprus is serious about custodianship and innovation. Dubai’s experience shows that hyper-scalable can behyper-responsible, and that is not marketing fluff. It is operational design.Cyprus may have had a different starting point, but the desired destination isthe same and borrowing the best practices – in this case the UAE’s mechanics –and embedding them inside the EU’s robust legal architecture, can still sprint theisland to the front of Europe’s fintech pack. Dubai’s regulators may have had the luxury of starting on ablank sheet of paper: it attracted and utilised talent and knowledge fromexperienced professionals that worked in more mature supervisory bodies and is also being able to take any direction it considers optimal for the jurisdictionsshort, medium and long-term. Cyprus, an EU member state, by contrast, must fitinto the ever-thickening EU rulebook of PSD2, MiFID II, MiCA and theAnti-Money-Laundering Package. Yet a different starting point is no longer anexcuse for Cyprus, not to aim for the same destination of hyper-scale inhyper-responsible manner – even if not at the hyper-speed of the UAE. TheCyprus Securities and Exchange Commission (CySEC) and the Central Bank ofCyprus (CBC) can still import the best UAE mechanics - without breaching EU discipline. In fact, the Abu Dhabi Global Market (ADGM) and theDubai International Financial Centre (DIFC) have a proven playbook that Cyprus could implementimmediately. 1. Rolling-Review Sandboxes I call these “license while you build”. The DIFC’s Innovation Testing Licence (ITL) grants aprovisional permit , then reviews progress in 30- to 90-day bursts while theproduct is still being coded. If the firm meets pre-agreed KPIs—say, daily VaRbelow 0.5 %—the licence automatically graduates to full status. ADGM’s RegLabtakes the same “test-and-learn” approach, giving supervisors live dashboardsinstead of static PDFs. CySEC’s own sandbox Sandbox A sandbox is a commonly deployed term in the fintech universe, referring to a mechanism for developing regulation that keeps up with the fast pace of innovation.In scope of the computer science world, a sandbox is also associated with a closed testing environment that designed for experimenting safely with web or software projects.Sandboxes are very important to the regulatory field, though is also utilized within the digital economy space.The first regulatory sandbox was launched in the United A sandbox is a commonly deployed term in the fintech universe, referring to a mechanism for developing regulation that keeps up with the fast pace of innovation.In scope of the computer science world, a sandbox is also associated with a closed testing environment that designed for experimenting safely with web or software projects.Sandboxes are very important to the regulatory field, though is also utilized within the digital economy space.The first regulatory sandbox was launched in the United Read this Term , is the perfect canvas to adopt truerolling reviews rather than one-off “letters of comfort”. A phased licencealigned to EU proportionality principles would reduce time-to-market withoutrelaxing investor protection. Dubai’s financial regulator has introduced an Innovation Testing License, giving fintechs room to experiment in a simplified regulatory sandbox within the DIFC. pic.twitter.com/VmwiIJjYCv 2. Risk-Based Licence Paths VARA and the DFSA calibrate capital, disclosure and auditdepth to business-model risk: a low-volume advisory gets lighter scrutiny thana leveraged derivatives venue. Cyprus still funnels most applicants— CFDbrokers , EMI start-ups, crypto custodians—through a single process that canexceed 12 months. A better approach? Publish a CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term and a CBC “risk matrix”:green channel (advisors, no leverage, no clients’ funds), amber (spot crypto, PISPs/AISPs),red (margin products, algorithmic venues). Such a riskmatrix policy is entirely EU-compatible: for example, Article 7 of MiCA andRecital 15 of PSD2 already endorse proportionality. 3. Real-Time Supervisory Data ADGM’s Digital Lab lets regulators pull API data—latency,order-book depth, margin calls—in almost real time, replacing quarterlyspreadsheets with heat-maps. Cyprus should mandate API-based risk streams into CySEC’sand CBC’s new RegTech back-ends. Nothing in EU law bars this; in fact, ESMA’s2024 supervisory convergence report calls for “machine-readable” submissions.Faster anomaly detection protects retail traders and burns less supervisorymanpower, that could be focused on initiatives such as those listed in here. You may also like: Cyprus FX Exec Pay Drops, Compliance Salaries Soar; Dubai Stays Lucrative The Need for an Ongoing Discussion Further, the regulators in Cyprus should implement proper channels to remain in touch andconnected to the industry and gather real insights for further improvement. Dubai’sregulators hold monthly, agenda-free roundtables where supervisors, foundersand investors debate edge-case scenarios before they become headlines. Theconversations de-risk policy drafts and reduce lobbying friction. Cyprus could institute majlis focused on hot topics—AItrading signals, finfluencer marketing, DeFi staking. Minutes published in nearreal time would raise transparency and pull private-sector expertise intofirst-draft legislation. The CySEC must be compliant with the requirements of the pan-European financial market regulator. However, the suggestions to mimic the UAE playbook would not violate any of the pan-European rules . Read more: FCA Warns Tech Firms Not Doing Enough to Stop Illegal Forex Finfluencers Brussels is not the barrier - inertia is: Phased sandboxes are already embedded in ESMA’s 2023 FinTech Guidelines. Risk-weighted reviews mirror the EBA’s SREP methodology for banks. RegTech APIs align with the Digital Operational Resilience Act’s call for continuous monitoring. Stakeholder forums echo the Commission’s new structured-dialogue approach used in the 2024 instant-payments package. And there some obvious pay-offs on implementing these measures. It can even directly uimpact the efficiency of the licencing regime. Speed – Rolling reviews could halve the median licence timeline from 12 (or more) months to six without loosening prudential screws. Safety – Live risk data, and early-warning majlis sessions shrink the window for consumer harm and market abuse. Signal to founders – A publicly documented fast lane tells the next wave of PSPs, brokers and tokenisation platforms that Cyprus is serious about custodianship and innovation. Dubai’s experience shows that hyper-scalable can behyper-responsible, and that is not marketing fluff. It is operational design.Cyprus may have had a different starting point, but the desired destination isthe same and borrowing the best practices – in this case the UAE’s mechanics –and embedding them inside the EU’s robust legal architecture, can still sprint theisland to the front of Europe’s fintech pack.