Abu Dhabi Global Market (“ADGM”) regulatory update Q3 2024

Regulatory horizon scanning and enforcement 

The FSRA issued several circulars during the reporting period: 

• On July 10, 2024, ADGM published its whistleblowing framework. The framework encompasses several arrangements including good governance requirements to support whistleblowing for all ADGM entities and protection for anonymous reporting in good faith of reasonably suspected misconduct. Entities within ADGM will implement proportionate arrangements to support effective whistleblowing by May 31, 2025. These arrangements need to be captured in writing by companies that are over a certain size or that carry additional financial crime risks.
  
  
• On July 19, 2024, the FSRA issued a Dear SEO letter to Authorised Firms regarding the widespread system outage caused by a global outage of services from the commonly used cybersecurity software provider, CrowdStrike. Responses from Authorised Firms were due by July 24, 2024. For further information, please contact your CO/MLRO for the full letter.
  
  
• On July 23, 2024, the Registration Authority released its Enforcement Strategy and Regulatory Priorities report to advise the ADGM business community of the regulatory approach for the 2024/2025 period, underscoring its commitment to transparency. Key regulatory priorities include:
  
  
  • Promote accuracy, timeliness, and quality of annual filings and licence renewals
  • Promote high standards of audit quality and corporate reporting in the ADGM
  • Conduct risk-based supervision on ADGM-licensed persons
  • Promote high standards of beneficial ownership compliance among ADGM-licensed persons
  • Deliver effective oversight of distributed ledger technology foundations
  • Facilitate, promote, and foster the uptake of ESG-related disclosure reporting
  • Identify potential or actual contraventions of operating or purporting to operate without a valid licence, exceeding the scope of ADGM licences, and false claims about the licence status/type
  • Ensure timely, decisive, and proportionate enforcement action is taken, including those in partnership with relevant authorities
    
    
• On August 27, 2024, the United Arab Emirates Financial Intelligence Unit (“UAEFIU”) issued a report via GoAML to all reporting entities and supervisory authorities registered on the UAEFIU reporting system. The UAEFIU is an operationally independent federal government entity that assists in the UAE’s efforts in combating money laundering and other financial crimes.
  
  
  1. The aim of the report is to provide feedback to reporting entities (“REs”) on various areas of the reporting process, including the reports submitted to the UAEFIU during the period in scope
  2. The report highlights issues noticed with the quality of the reports received and suggests possible areas of improvement
  3. The report also shares periodic snapshots of reporting quantity, quality, and disseminations. This includes looking at the volumes of reports being received and highlighting trends in the data
  4. Furthermore, the report includes outcomes of recently issued strategic analysis reports on the conclusions of recent projects or exercises that the UAEFIU conducted
  5. Additionally, the report highlights case studies, which provide important information and lessons for all REs that may be used to enhance their own processes, policies, and procedures

Consultation papers 

• On July 26, 2024, the Registration Authority (“RA”) issued a consultation paper to explain and seek public feedback on proposed amendments to the Employment Regulations 2019. The amendments enhance the regulations to reflect global changes in work practices, and also provide greater clarity to employees and employers regarding their rights and obligations. The consultation period was open until August 26, 2024
  
  The key features of the RA’s proposals are as follows:
  
  
  • Amending the definition of ‘employee’ to enable employers to hire remote employees and allow for more flexible working arrangements
  • Clarifying ambiguities related to employee entitlements, including those of part-time employees
  • Expanding the list of employees’ duties to their employer, as well as certain obligations employers have towards their employees
  • Clarifying certain requirements regarding obtaining and cancelling an employee’s work permit and visa
  • Expanding obligations and responsibilities related to discrimination and victimisation in the workplace
    
    
• On September 9, 2024, the RA issued a consultation paper to explain and seek public feedback and comments on the proposed Commercial Permits Regulations 2024 and subordinate rules. The consultation period closed on September 29, 2024.
  
  The key features of the RA’s proposals are as follows:
  
  
  • Introducing a requirement to obtain a commercial permit from the RA regarding certain activities
  • Establishing specific conditions applicable to alcohol or shisha permits
  • Providing the fees payable to the RA in connection with the issuance and renewal of annual or temporary alcohol and shisha permits

Matters of clarification 

• On September 20, 2024, the ADGM issued an alert concerning misleading claims made by New Financial Technology (“NFT”) Limited. It has come to the attention of the FSRA that NFT has falsely claimed to potential investors, both directly and in marketing documents and videos published on various social media websites, that NFT is in the process of obtaining a financial services permission from the ADGM FSRA and that the NFT Fund is established in ADGM. 

News/updates  

• On July 1, 2024, AXA IM Alts, a global leader in alternative investments with $200 billion of AUM, expanded its global presence with the opening of its first office in the Middle East, in ADGM. The FSRA granted the firm a financial services permission (FSP) for a category 4 licence. 
• On July 17, 2024, ADGM announced a fee revision that applies to all categories of commercial licences and will be applicable from January 1, 2025. ADGM will implement major reductions of 50% or more for obtaining non-financial and retail licences within its jurisdiction. 
• On July 18, 2024, ADGM hosted a second community event in Al Reem. Attended by over 150 representatives from Al Reem Island's business community, the event provided essential updates on licensing, registration fees, and transition processes. 
• On August 6, 2024, Trustin Limited, the UAE's first digital escrow platform in the region, was pleased to announce an important milestone in its journey. The firm has secured financial services permission (FSP) from the Abu Dhabi Global Market (“ADGM”) Financial Services Regulatory Authority (“FSRA”). This licence is a significant milestone, solidifying its commitment to regulatory compliance and innovation in the escrow services space.  
• On August 7, 2024, the plans for the “UAE-China Summit” were presented by HSBC, celebrating 40 years of bilateral cooperation. This event is set to be a part of the upcoming ADFW in December and was unveiled during a series of more than 75 engagements with leading entities in Shanghai and Hong Kong. This is in line with ADGM’s ongoing commitment to bolster Abu Dhabi’s position and bilateral relations with China. 
• On August 14, 2024, ADGM issued an update on its continued rapid growth. ADGM has issued 1,271 new licences in the first half of the year and increased AUM by 226%. Currently, 112 asset and fund managers operate in ADGM, managing 141 funds, with the workforce growing by over 2,500. It is the fastest-growing financial centre and the only jurisdiction with the direct application of English common law in the region.  
• On August 20, 2024, ADGM FSRA announced a proposed regulatory framework for the issuance of fiat-referenced tokens (“FRTs”) and invited public feedback and comments on the proposals. The consultation period ends on October 3, 2024. FRTs are a category of stablecoins that are backed by high-quality, liquid assets denominated in the same currency as the FRT and can be liquidated rapidly with minimal adverse price effect. FRTs are intended to be used as a means of payment and share certain characteristics with stored value. 
• On August 27, 2024, Aurem, the UAE’s first unified workplace wealth and benefits technology platform, announced its licensing by FSRA, marking a significant milestone in the company's mission to connect the world for a better financial future. The company is spearheading a new emerging trend of offering long-term employee benefits and investment plans in the UAE, a $100 billion market opportunity. 
• On August 28, 2024, Alpha Financial Markets Consulting opened a new branch in Abu Dhabi. The firm offers management and technology consulting services, covering both public and private markets. 
• On August 29, 2024, ADGM announced the successful conclusion of the third edition of the Summer Internship Program. This year’s programme, conducted in collaboration with ADGM Academy (“ADGMA”), the knowledge arm of ADGM, and sponsored by ADNOC Global Trading, welcomed over 100 students. 
• On August 30, 2024, ADGM began the countdown to Abu Dhabi Finance Week, with 100 days to go and an expansion to 50 events being held from December 9, 2024, to December 12, 2024. 
• On September 9, 2024, Leon Black, the esteemed founder of Apollo Global Management and a leading figure in private equity with a net worth in excess of $14 billion, established a new branch of his family office, Elysium Management, at Abu Dhabi Global Market (“ADGM”). This strategic move underscores Black’s deep ties with the region, cultivated over 30 years through his leadership at Apollo, a global alternative asset manager with nearly $700 billion under management, and reflects his growing commitment to making a deeper push within the region. 
• On September 11, 2024, the Registration Authority at ADGM alerted all ADGM-registered entities to comply with the ADGM Employment Regulations (2019) and the Temporary Work Permit Rules (2024). Effective from September 1, 2024, all entities registered with ADGM must obtain and maintain valid work permits and temporary work permits for every individual working within the ADGM jurisdiction.  
• On September 12, 2024, PGIM, a $1.33 trillion global investment management business of Prudential Financial, Inc., received financial services permission (“FSP”) to operate within ADGM. 
• On September 18, 2024, ADGM and the Department of Municipalities and Transport (“DMT”) signed a landmark MoU to transfer the real estate and municipal services on Al Reem Island from DMT to ADGM. The agreement outlines the roles and responsibilities of both authorities, ensuring a seamless transfer of the real estate sector on Al Reem Island from DMT to ADGM, while fostering ongoing collaboration on urban planning, infrastructure, and all other essential services with DMT. 
• On September 18, 2024, Stonepeak, a leading alternative investment firm focused on infrastructure and real assets, announced the opening of an office in ADGM after receiving its financial services permission from the FSRA. 
• On September 23, 2024, Gulf Capital, one of the largest private equity firms investing from the GCC to the rest of Asia, announced that it has formally joined the Abu Dhabi Sustainable Finance Declaration (“ADSFD”), formalising its commitment to a sustainable finance and investment industry in line with the UAE’s Green Economy for Sustainable Development initiative. 
• On September 24, 2024, Abu Dhabi Finance Week unveiled top finance leaders to speak at the 2024 edition. The lineup includes senior leaders from global banking institutions such as UBS, State Street, BNY, Santander, Standard Chartered, and First Abu Dhabi Bank, as well as CEOs and founders from PGIM, Brookfield, and more. 

ADFW is currently registering interests and will be open for registration in the coming weeks. For more information please visit: www.adfw.com. 

Events 

• On July 3, 2024, the FSRA held a session on “Policy and Legal Legislative Update” at ADGM. The session covered an overview of 2023 accomplishments, sustainable finance, whistleblowing, stablecoins and virtual assets, IT risk management, and the plan for 2024’s legislative agenda.  
• On the 17th of July 2024, the ADGM’s Financial & Cyber Crime Prevention team held a session on the Outcomes of the Updated National Risk Assessment (“NRA”). The session covered the key threads associated with money laundering and terrorist financing, the key vulnerabilities’ findings across out Sectors Fis, VASPs and DNFBPs and recommendations.  

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