Lawyers have given an initial thumbs up to Abu Dhabi Global Market’s long-awaited financial services legislation, published in draft form yesterday morning.
The free zone began issuing licences to non-financial services entities last month and aims to begin processing its first financial services licence applications in the final quarter of the year.
The new regulations cover a wide range of issues, including the management and marketing of funds and investment offerings, mandatory disclosure requirements, market infrastructure systems, market conduct rules, and the free zone’s disciplinary actions and enforcement powers.
The draft regulations are broadly modelled on the UK’s Financial Services and Markets Act, which will provide comfort and reassurance for foreign institutions, according to Tim Plews, the head of regional financial services and markets at Clifford Chance.
“The type of international firms that ADGM is trying to attract will be attracted by the extent to which the proposed regulations follow the UK model,” he said.
“It’s a big policy win for the ADGM to have made that decision, in that they’ve been responsive to their customers. Overall it’s a good regulatory toolkit that they’ve crafted, which they’ll be able to apply across the range of financial services they want to focus on.”
Interested parties have until August 11 to submit their comments on the draft regulations.
“Our regulatory approach adopts a calibrated balance of maintaining rigour in regulation while nurturing financial competition and also innovation,” said Richard Teng, the chief executive of ADGM’s Financial Services Regulatory Authority.
Mr Teng said: “We welcome feedback to support ADGM in establishing a sound regulatory framework of clear and transparent rules, benchmarked against international standards and global best practices.”
ADGM plans to publish further supplementary consultation papers to the new financial regulations in the coming weeks, including specific rules regarding insurance. “ADGM has obviously taken time with its advisors to produce laws and regulations that are fairly comprensive,” said Jody Waugh, a Dubai-based partner with Al Tamimi.
“It’s the right way to do it because it gives participants that its a centre that has laws and regulations that are on a par with other leading financial markets like London, Singapore and Hong Kong.”
jeverington@thenational.ae
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