The Dubai Financial Services Authority (DFSA) has released a new explainer guide for its Innovation Testing License. This initiative aims to support the development of innovative financial services within or from the DIFC.

The Innovation Testing License, launched in 2017, functions as the DFSA’s regulatory sandbox. It is a restricted financial services license that allows eligible firms to test new financial products, services, or business models in a controlled environment.

Temporary modifications to existing regulatory requirements are permitted during the testing phase, which takes place under close supervisory oversight.

The sandbox continues to be a key part of the DFSA’s broader approach to supporting responsible financial innovation.

The new explainer guide is intended to serve as a practical reference for firms considering applying for the license.

It provides information on the purpose of the license, eligibility criteria, the application process, and the responsibilities firms must adhere to during the testing phase.

According to Justin Baldacchino, Managing Director of Supervision at the DFSA,

“As the financial sector continues to evolve at pace, we recognise the importance of supporting innovation with clear and transparent regulatory guidance. The DFSA’s Innovation Testing License explainer guide is designed to demystify the process and empower innovators with the knowledge they need to engage with the DFSA and bring transformative financial services to market in the DIFC.”

The guide’s publication is part of the DFSA’s ongoing efforts to promote innovation while maintaining regulatory standards.

The release also comes ahead of the Dubai FinTech Summit 2025, scheduled for 12–13 May, where the DFSA is set to play a significant role.

It will lead the Regulatory Forum sessions on the first day, featuring discussions and speakers focused on global regulatory issues.

In addition, the DFSA will host the Cyber and AI Regulatory College, convening experts from industry, academia, and international regulatory bodies to address issues related to AI and cyber risk.

At the DIFC exhibition stand, the DFSA will be available to discuss its various initiatives, including the Innovation Testing License, the Tokenisation Regulatory Sandbox, the Threat Intelligence Platform, and its regulatory stance on crypto and digital assets.

The summit will also include roundtable sessions with industry participants, covering topics such as wealth management, crypto regulation, including a session co-hosted with the Global Blockchain Business Council, and sustainable finance.

During the event, the DFSA will share initial outcomes from its Expression of Interest process under the Tokenisation Regulatory Sandbox, a recently introduced framework designed to support the testing of tokenised financial products and services.

This forms part of the DFSA’s broader commitment to shaping resilient and adaptive regulatory structures for emerging areas in finance.

Featured image credit: edited from freepik