Abu Dhabi’s independent regulatory authority comes up with a regulatory framework to support participants deploying innovative technology within the financial services sector.
The framework will promote the development of blockchain startups and will create new efficiencies in the regional financial sector. The Financial Services Regulatory Authority (FSRA) proposal will seek to limit startups to be accepted into the program. It will limit to those that ‘promote significant growth, efficiency or competition in the financial sector,’ said a consultation paper which was released by Abu Dhabi Global Market.
The FSRA is one of the three divisions of the Abu Dhabi Global Market (ADGM). The paper explained its plans to create a sandbox environment for FinTech. Under this, startups would be allowed to work under a flexible regulatory framework for up to two years.
The paper stated that, “The advent of robo-advisers that offer lower costs, simplicity and real-time portfolio analytics and monitoring; or leveraging on the application of blockchain technology and distributed databases to facilitate price discovery, smart contracts, settlement of financial transactions, etc that may lead to safer [and] better products, and higher productivity and growth."
Talking about this development, Raza Rizvi, a UAE-based commercial IP lawyer with Simmons & Simmons told the coindesk.com that he sees the development as more indicative of Abu Dhabi’s wider push. He said that this would attract enterprise financial institutions; though he said the initiatives could prove synergistic.
He said in his statement, “No doubt the two independent initiatives will bring out the best in each other and enable the UAE as a whole to lead the way in the FinTech sector and usage of blockchain technology in the Middle East.”
Established in 2015, Abu Dhabi Global Market is a broad-based international financial centre for local, regional and international institutions.
