Binance secures licence from Abu Dhabi Global Market’s FSRA

Blockchain services provider Binance said it has received a Financial Services Permission (FSP) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).

The FSP enables Binance, which has been expanding in the Middle East this year, to provide custody to professional clients, provided it meets the conditions as outlined by the FSRA, Binance said in a statement.

The FSRA in September published guiding principles on its approach to virtual asset regulation and supervision to outline its expectations for the asset class and service providers in the sector.

The principles complement ADGM’s regulatory framework for spot virtual asset activities, the financial regulator said.

ADGM’s FSRA introduced the world’s ﬁrst-of-its-kind comprehensive and bespoke virtual asset regulatory framework in 2018 to provide inclusive and robust rules and provisions for organisations.

"Our robust and transparent virtual asset regulatory framework is the backbone of ADGM’s strategy towards fostering a trusted and well-regulated environment that will pave the way for sustainable innovation within the financial sector and reinforcing the UAE’s status as a rapidly accelerating global crypto marketplace, with Abu Dhabi and the ADGM as the engine room powering this growth," said Ahmed Al Zaabi, chairman of ADGM.

Binance received in-principle approval from The Abu Dhabi Global Market to operate as a broker-dealer in virtual assets in the capital in April.

“Obtaining this licence is a pivotal step in the growth of Binance in Abu Dhabi and a reflection of the city’s progressive stance on virtual assets," said Dominic Longman, senior executive officer of Binance (AD).

"We are excited to continue to strengthen our symbiotic relationship with ADGM and the city of Abu Dhabi and look forward to providing institutional investors with a secure and reliable platform for their virtual asset activities."

In March, it secured a virtual asset licence to operate in Dubai after the emirate outlined clear regulations to govern emerging technology sectors such as cryptocurrency in an effort to safeguard investors.

The company also won regulatory approval from the Central Bank of Bahrain in March to operate as a crypto asset service provider in the kingdom.

In September, it won approval to join the minimal viable product (MVP) programme from Dubai’s Virtual Asset Regulatory Authority (Vara).

This allows Binance to offer a range of Vara-approved virtual assets-related services to qualified retail and institutional investors in Dubai within Vara's regulatory framework for providers.

Binance was founded in China in 2017.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Profile

Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari

Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.

Number of employees: Over 50

Financing stage: Series B currently being finalised

Investors: Series A - Audacia Capital

Sector of operation: Transport

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Day 3, Abu Dhabi Test: At a glance

Moment of the day Just three balls remained in an exhausting day for Sri Lanka’s bowlers when they were afforded some belated cheer. Nuwan Pradeep, unrewarded in 15 overs to that point, let slip a seemingly innocuous delivery down the legside. Babar Azam feathered it behind, and Niroshan Dickwella dived to make a fine catch.

Stat of the day - 2.56 Shan Masood and Sami Aslam are the 16^th opening partnership Pakistan have had in Tests in the past five years. That turnover at the top of the order – a new pair every 2.56 Test matches on average – is by far the fastest rate among the leading Test sides. Masood and Aslam put on 114 in their first alliance in Abu Dhabi.

The verdict Even by the normal standards of Test cricket in the UAE, this has been slow going. Pakistan’s run-rate of 2.38 per over is the lowest they have managed in a Test match in this country. With just 14 wickets having fallen in three days so far, it is difficult to see 26 dropping to bring about a result over the next two.

MATCH INFO

Karnatake Tuskers 114-1 (10 ovs)

Charles 57, Amla 47

Bangla Tigers 117-5 (8.5 ovs)

Fletcher 40, Moores 28 no, Lamichhane 2-9

Bangla Tiger win by five wickets

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