Standard Life Return Investments Text Only

November 9, 2014 8:50 am

Standard Life closes Dubai office

Chris Flood

Standard Life is to pull out of the Middle East and close its office in Dubai after being caught out by regulatory changes.

As a result, the Edinburgh ­based financial services provider will have to return around £10m in assets to customers and pay compensation to investors via an 8 per cent enhancement to the value of their savings and investment plans.

The closure, seen as an embarrassment for Standard Life, will trigger the loss of nine jobs, including that of Middle East chief executive. This position was held by Chris Divito who has managed the Dubai office since it opened in 2012. The decision to pull out of Dubai was made after the UAE Insurance Authority, a local regulator, issued updated guidelines that restricted the ability of brokers to work with product providers not regulated by the IA.

Alan Armitage, chief executive for Asia and emerging markets at Standard Life, said the regulator’s position had not been spelt out in precise terms before this year. “It was previously that IA ­licensed firms [brokers] could not deal with non ­IA entities for insuring

risk, but that they could deal with them for investment contract purposes,” he said.

Other investment product providers have said they are unaffected by the new guidelines and will continue to operate in Dubai.

Skandia International, the offshore division of Old Mutual Wealth, said it had a “strong, well-established business” in Dubai and remained committed to the region.

RL360°, a £2.2bn asset manager based in the Isle of Man, said it was in a different position to both Standard Life and Skandia. It was authorised to operate under a representative office licence from the Ministry of Economy, which allowed it to accept investment business from UAE residents.

Along with other companies, RL360° has had a licence application pending with the Insurance Authority for many years.