The DFSA launches Innovation Testing Licence explainer guide to boost innovation in the DIFC
The Innovation Testing Licence – the DFSA's regulatory sandbox – is a restricted financial services licence that allows eligible firms to test innovative financial products, services, and business models within a controlled environment with temporary modifications to existing regulatory requirements whilst being subject to close supervisory oversight. Launched in 2017, the Innovation Testing Licence remains a cornerstone of the DFSA's approach to support the responsible development of financial technology solutions in the DIFC.
Designed as a practical tool for firms interested in applying for the licence, the DFSA's Innovation Testing Licence explainer guide offers clear and accessible information on how to engage with the DFSA's regulatory sandbox, test innovative solutions, and navigate the path to full authorisation. It outlines the purpose of the licence, eligibility criteria, application process, and obligations firms must meet during the testing phase.
Justin Baldacchino, Managing Director, Supervision, DFSA, said: "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 Licence 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 release of the explainer guide builds on the DFSA's long-standing commitment to fostering innovation while ensuring regulatory integrity.
Looking ahead: DFSA at the Dubai FinTech Summit 2025
The launch of the DFSA's Innovation Testing Licence explainer guide comes ahead of the Dubai FinTech Summit 2025, taking place on 12-13 May 2025, where the DFSA will play a central role in shaping the global dialogue on regulatory innovation:
Leading the Regulatory Forum sessions on Day 1, with topics and speakers curated to shape global regulatory dialogue.
Hosting the Cyber and AI Regulatory College, bringing together, thought leaders on AI and cyber risk management from industry, academia, regulators, and standard setters from around the world.
Connecting with delegates at the DIFC exhibition stand to discuss the Innovation Testing Licence, Tokenisation Regulatory Sandbox, Threat Intelligence Platform, and the DFSA's regulatory approach to crypto and digital assets – among other key initiatives.
Exchanging views on emerging priorities with industry stakeholders through roundtable discussions on key topics such as wealth management, crypto regulation – including a session co-hosted with the Global Blockchain Business Council – and sustainable finance.
During the Summit, the DFSA will also share the outcomes of its Expression of Interest as part of the Tokenisation Regulatory Sandbox, a newly launched initiative providing tailored support for the testing of tokenised products and services within the DIFC. This marks another step in the DFSA's commitment to developing robust, future-ready regulatory frameworks for digital and tokenised finance.
The DFSA's Innovation Testing Licence explainer guide is now available on the DFSA website.
Applications for the Innovation Testing Licence are open year-round, with decisions typically issued within 10-12 weeks of receiving a complete submission, subject to the quality of the application and the responsiveness of the firm to any follow-up questions that the DFSA may have.
For further information, please contact:
Corporate Communications
Dubai Financial Services Authority (DFSA)
Level 13, The Gate, West Wing
Dubai, UAE
Email: DFSAcorpcomms@dfsa.ae
https://www.dfsa.ae/
About DFSA
The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose-built financial free zone in Dubai, UAE. The DFSA regulates and supervises financial services firms and markets in the DIFC. These include asset managers, banks, custody and trust services, commodities futures traders, fund managers, insurers and reinsurers, traders of securities and fintech firms. We supervise exchanges and trading platforms for both conduct and prudential purposes, overseeing an international securities exchange (Nasdaq Dubai) and an international commodities derivatives exchange (Gulf Mercantile Exchange). The DFSA is also responsible for supervising and enforcing anti-money laundering and countering the financing of terrorism requirements applicable in the DIFC. Please refer to the DFSA's website for more information.
Justin Baldacchino is the Managing Director of Supervision at the DFSA, bringing 25 years of international finance experience. He possesses deep expertise in regulatory interpretation, liaison, implementation, risk, regulatory affairs, compliance, anti-money laundering (AML), capital, liquidity, innovation, and technology. Joining the DFSA in 2020, Mr Baldacchino previously served as the Group Head of Regulatory Compliance for ANZ Bank in Australia and held various senior roles at JP Morgan in Hong Kong, including Head of Regulatory Compliance, Asia-Pacific, and Head of International Operational Risk, Asia-Pacific. He also served as Head of Compliance and Risk Governance, Asia for National Australia Bank in Hong Kong. Mr Baldacchino is an alumnus of Melbourne Business School with an MBA and a Post Graduate Diploma, and he holds a Bachelor of Economics from La Trobe University. He completed the Harvard Executive Programme in Regulatory Strategic Management and is a certified AML Specialist. He has served as an Executive Board Member for the Association of Certified Anti-Money Laundering Specialists and is currently a member of The Basel Consultative Group.
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