The new age of the GCC regulator

This autumn the expected launch of the Dubai International Financial Centre will also mark the arrival of yet another regulator in the Gulf region, the Dubai Financial Services Authority whose independence is personally guaranteed by the Dubai Crown Prince General Sheikh Mohammed bin Rashid Al Maktoum.

But this is only the latest in a series of regulatory authorities that now control critical parts of business the length and breadth of the Gulf region.

Bahrain has dismantled its telecommunications monopoly and in the process the government handed over control of the sector to the new Telecommunications Regulatory Authority. Meanwhile, Oman is moving down the same road with the appointment of its own powerful regulator in this sector.

Even Saudi Arabia has appointed regulators for telecommunications and power, although their independence is as yet unproven. More significant is the birth of the new Saudi Arabian Capital Markets Authority with a strong Chairman Jammaz Al Suhaimi.

This is undoubtedly the most important thing to happen in Saudi banking since the original creation of the Saudi Monetary Agency in the 1950s. For the CMA Chairman will enjoy sweeping powers to scrutinize and intervene in the affairs of listed banks and companies.
Now regulators will have to find their own level within the Gulf business community. Too many objections to established business practice, or attacks on leading business personalities, and they may find that their powers are swiftly checked.

However, a sensible accommodation of the traditional business patterns of the regions to modern realities, and the provision of greater transparency and openness in business transactions will be very much welcomed by all but a small minority of businessmen.

Generally, there is a feeling among the business community that cleaning up its own act is essential to maximize commercial opportunities, and to thrive in the challenging environment of a global economy. Regulators are definitely the way forward, and a vital part of economic reform in the region.