Abu Dhabi Global Market, the UAE’s new financial free zone, is expecting a rush of applications to join its new incubator for financial technology (fintech) businesses, the first in the Middle East, which is now formally open for applications.
ADGM yesterday announced that its fintech Regulatory Laboratory (RegLab) is up and running, after new laws were drafted for the initiative and following consultation with the public and potential industry partners,
In March, the ADGM chairman Ahmed Al Sayegh set the ambition for the market to be the fintech capital of the region. Fintech is a growing sector within the financial services business, and could be worth US$12 billion globally by 2018, industry experts have estimated.
Richard Teng, chief executive of the ADGM regulator, which has drafted the rulebook for the new project, said: “We are very excited to launch the ADGM RegLab and it is encouraging that interest has been pouring in since we announced our plans.” The first batch of applicants has until the end of January to apply for membership.
The RegLab regime has been tailored for new entrants into the business and for established institutions keen to innovate in the sector. For a period of two years, they are subject to a lighter regulatory burden than institutions seeking a full financial licence at ADGM, but can opt for full membership after that.
Similar fintech incubator hubs exist in London and Singapore, but RegLab is the first in the Middle East region.
In addition to smaller entrepreneurial fintech start-ups, it is believed several big UAE banks are considering basing their fintech operations on ADGM’s Al Maryah Island headquarters.
Separately, yesterday Switzerland’s cabinet proposed new light-touch regulations for fintech companies aimed at bolstering business and competitiveness. Switzerland lags the likes of Britain and Singapore when it comes to fintech, according to Reuters.
Firms specialising in crypto-currencies, for instance, say financial regulations must change for them to thrive in places like Zug, dubbed “Crypto Valley”.
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