Acquisitions of gigantic groups of companies in UAE are receiving a lot of attention lately, wherein banks plays a significant role in assisting the companies undergoing acquisition. Therefore, in order to securely regulate the tasks performed by the banks in big acquisitions, the Central Bank of UAE has issued a new circular that Circular number 2 of the year 2020 for implementing the major Acquisition Regulations. The motivation behind the Regulations is to manage and oversee significant acquisitions being attempted by banks in the UAE with the end goal of guaranteeing the sufficiency of UAE banks and adding to money related security and protection to the commercial market. Banking Lawyers of Dubai confirms that even though UAE government has issued Banking Law (Federal Law 14 of 2018), yet the new regulation intends to impose further regulations on the banks to comply with the procedures and steps whilst undergoing acquisition of major companies in the country.
The Regulations are, in this manner, quite appropriately issued on time, without any delay. The Regulations apply to all banks authorized to undertake financial activities authorized by the Central Bank in the UAE, including auxiliaries, members and universal branches. Some of the key highlights of the concerned regulation includes the following:
In spite of the fact that banks will as of now be aware of their commitments under the Banking Law while thinking about mergers and acquisitions, the said regulation will force an improved degree of prerequisites which ought to be considered in the beginning times of the examination of an acquisition. Nevertheless, the commercial lawyers of Dubai believe that whilst the implementation of the concerned regulation, it may be difficult to ascertain what all acquisitions will be considered as “Significant Acquisitions”. The necessity to give documents of due diligence to the Central Bank will probably bring up issues around the Central Bank’s dependence on those reports, and arrangement counsels to banks undertaking exchanges in the UAE ought to likewise be insightful of how that data could be utilized by the Central Bank in its dynamic procedure.