* SCA passed new fund fee structure late in June
* Details yet to be confirmed in Official Gazette
* Fund managers worry structure will hurt business
* Decision may boost local fund firms
By Dinesh Nair and Stanley Carvalho
DUBAI, Oct 3 (Reuters) - International funds selling
investments in the UAE plan to lobby financial regulators to
ease new product registration fees which they complain are much
higher than the charges on local operators and could run into
tens of thousands of dollars.
"You do not create an efficient and competitive landscape by
charging different amounts for local and international firms,"
said one Dubai-based head of a global asset management firm who
asked not to be identified.
"That too, at such huge disparities.
"The SCA has listened to us in the past and we hope they
listen this time too. It's in everybody's interest," he said.
The region is a major revenue driver for asset management
firms such as BlackRock Inc, Fidelity Investments,
Barings Plc and T Rowe Price which sell their products
via banks and insurance firms to wealthy Gulf investors,
institutions such as sovereign wealth funds and family firms.
By contrast, local asset management firms, which focus on
investing within the Gulf, have struggled to attract investor
interest and stay afloat since the 2008 financial crisis.
The UAE's Securities and Commodities Authority is proposing
to charge international companies 30,000 UAE dirhams ($8,200) to
approve funds being promoted to the public along with a 5,000
dirham fee for examining the application.
Funds being sold to private investors cost 15,000 dirhams to
The new scale of charges was issued in June but has yet to
be confirmed by being published in the Official Gazette.
Asset managers have complained that costs will soar if
products are sold through multiple distributors.
If an international fund sells three products through three
distributors, registration fees could total 270,000 UAE dirhams
By comparison, Singapore charges an initial fee of S$1,200
per fund and an annual fee of S$1,200 ($960), according to an
executive at an international fund firm said.
Rates in Luxembourg are fixed at 5,000 euros ($6,800) for
the range of funds which the asset managers intend to sell, he
The UAE SCA said local fund firms are required to pay 10,000
dirhams ($2,700) as licence fees and 5,000 dirhams fee for an
application to sell their products in the country.
Peter Duke, sales director for Fidelity Investments in
Dubai, said the impact of the new charges would not fall on
asset management firms but on those promoting the funds, like
"But the reality is that the fund promoter will pass the
costs to the fund provider or customers,"
"The fee structure doesn't work in the best interests of
customers. Some international firms could decide to reduce their
presence because it would be difficult to justify the charges or
In response to questions from Reuters, the SCA said in a
statement that its registration fees for funds were among the
best in the world and were designed to encourage fund providers
to offer only high-quality products.
"Investment funds' registration fees could help curb the
supply of large numbers of foreign funds at the expense of a
thorough due diligence processes by the promoters, and to the
benefit of high quality foreign investment funds," the SCA said.
It added that the fees appeared high because the SCA had
decided to introduce one-off, non-recurring charges.