Changing Needs

How would you assess ADGM’s role in establishing a world-class financial free zone in Abu Dhabi and how does the Emirate attract financial multinationals to establish branches in ADGM?

ADGM, the international financial center in Abu Dhabi, was established to support the financial stability and complement the vibrant economic growth of Abu Dhabi and the UAE. It is ADGM’s role to identify and cater to the current and future needs of the markets in our region. Our three authorities, the Financial Services Regulatory Authority, the Registration Authority, and ADGM Courts have been fully operational since October 2015. We have also launched several new initiatives to address the unfulfilled needs of stakeholders for regulated products and business solutions. By providing a comprehensive suite of funds and new innovative investment vehicles, local and global financial institutions can now conduct activities in the UAE, which had to be undertaken overseas in the past. To date, we have registered more than 350 diverse non-financial and financial companies from local and international markets. Global institutions such as Macquarie Capital and Aberdeen Asset Management have also demonstrated confidence in ADGM to host their MENA operations. In terms of funds, we have five domiciled funds and three foreign funds in ADGM. On expanding financial services, we are also pleased that Mubadala Capital will be relocating to ADGM on Al Maryah Island soon. In addition, more than 70 special purpose vehicles (SPVs) have been set up, catering to a broad range of business types, uses, and industries.

What key milestones have you reached in the past two years?

We are honored that ADGM, in our first year of operations, has been recognized by the industry as the Financial Center of the Year (MENA) 2016 by the prominent Global Investor/ISF publication. ADGM is the first jurisdiction in the region to adopt common law in its entirety, similar to other international jurisdictions such as Singapore and Hong Kong, as opposed to codifying common law. One key advantage of this is that we can benefit from changing case law, which is critical, especially in wealth management where standards, norms, and practices are evolving. ADGM Courts serve as an independent and first-class common law judicial system for ADGM. We are also the first courts in the entire MENA region to be founded upon the direct application of the English Common Law for civil and commercial matters. Being recognized by the FinTech Federation as a global hub member and our efforts in building a fintech ecosystem in the region are significant milestones and achievements.

What is the current state of ADGM’s target to make Abu Dhabi the regional hub for fintech and what progress has been made in this regard?

We are living in a world where transformational technologies are pushing the boundaries of economic opportunity while challenging current business models. Fintech developments such as blockchain, artificial intelligence, biometric applications, and virtual currencies are expanding the frontier of financial services. 2016 saw more than USD17.6 billion of VC investments in 1,436 global fintech deals across 66 countries. ADGM recognized the potential and impact of fintech on our economy since we first began operations. In March 2016 we became the first jurisdiction in this region to announce our ambition to be the fintech hub to support, enable, and accelerate the sector’s development. We moved quickly on two fronts, first establishing a conducive and balanced regulatory framework, then launching the Regulatory Laboratory (RegLab) in November 2016. RegLab is a regulatory sandbox designed to encourage fintech startups to develop, test, and deploy their solutions before going out to the market. This is the first RegLab in the MENA region. So far, we have received interesting applications from local and regional stakeholders, including an application from Singapore on digital banking. We are glad to approve our first batch of five ADGM RegLab firms and opened up the second batch of fintech applications.