The Financial Services Regulatory Authority (FSRA), the market supervisor of the United Arab Emirates’ (UAE) Abu Dhabi Global Markets, has outlined five ‘guiding principles’ that will inform its regulatory efforts.
The ADGM is one of the international financial centres and free trade zones in the UAE.
According to the FSRA, the principles are anchored on ensuring that ADGM’s regulatory frameworks are internationally recognized, market-orientated, risk-focused, accommodates regional and global cooperation, and delivers high standards of quality and service.
FSRA outlined and explained the rationale behind these principles in an undated post published on the official website of the ADGM.
The First Two Principles
The first principle seeks to bring international recognition to ADGM’s regulatory framework.
FSRA explained that “ADGM will draw on best standards and practices from international financial services centres around the world.”
Under this principle, the free trade zone will also confirm to international standards in Anti-Money Laundering and Countering the Financing of Terrorism.
At the same time, the free zone will also enshrine regulatory confidentiality except in cases where the disclosure of corporate information is required by other regulators, public authorities or the court.
The second principle seeks to make the free trade zone’s rules and regulations dynamic and market-orientated.
FRSA explained that ADGM’s regulatory framework will be principles-based and outcome-focused, proportional and progressive, responsive and proactive to industry changes and needs, as well as creates space for regular dialogue with the industry.
“ADGM’s legislative framework will be based on English Common Law, enabling the courts to draw on a well-established set of precedents and responding effectively to changing global market conditions,” FSRA said.
“This will also empower ADGM to offer its member institutions the same level of sophistication, certainty and flexibility in its legal and regulatory regime as practised in other international financial jurisdictions,” it added.
The Other Three Principles
Under the third principle, ADGM is to adopt a “prudential regulation approach” to see to the Abu Dhabi free trade zone’s financial stability and business…
