Three years after its founding by federal decree, Abu Dhabi Global Market really started to find its feet in 2016.
The free zone’s first full year of operations – having officially declared itself open for business in October 2015 – led to ADGM spreading its wings internationally, with a series of agreements with key international regulators.
The centre launched a major push to attract fintech entrepreneurs and also unveiled new regulations to bring in aircraft financing companies.
And, of course, the financial hub on Al Maryah Island welcomed its first financial members, including its first major Emirati financial partner.
After finalising much of its regulatory framework in 2015 and with the appointment of its regulatory committee in January, the centre’s Financial Regulatory Services Authority wasted no time in reaching out internationally. After securing membership of the International Organisation of Securities Commissions, the regulator forged several agreements with its counterparts throughout the world including in China, India, Jordan, Egypt, France and Turkey.
Such agreements complemented a series of equally important cooperation agreements with local government entities, including the Abu Dhabi Securities Exchange and the federal Central Bank, courts and Ministry of Finance, as well as an MoU with fellow free zone the DIFC.
While the UAE’s industry leaders have publicly welcomed ADGM’s creation, several had admitted in private to doubts about the free zone’s raison d’être, expressing scepticism about its ability to attract key institutions already committed to the DIFC.
The free zone went some way to answering its critics in 2016, with a major focus on attracting investment in the burgeoning fintech sector.
Ahmed Al Sayegh, ADGM’s chairman, in March set out the free zone’s strategy to establish the regulatory infrastructure to make Abu Dhabi the Arabian Gulf’s capital for fintech.
The first major initiative of that strategy came about in November, with the launch of the FinTech Regulatory Laboratory. The centre, known as RegLab, provides a sandbox environment for start ups and more established players operating in the fintech space, modelled on similar initiatives in the UK and Singapore. RegLab provides an environment allowing fintech players to develop and test fintech businesses under a lighter-touch regulatory environment for up to two years.
On December 7, ADGM announced a second key strand of its strategy, with new regulations enabling the establishment of special purpose vehicles for aircraft financing, in a bid to attract aircraft financing companies to Al Maryah Island.
Of course, ADGM last year finally began to attract big-name international and local financial services companies to its premises in Al Maryah Island.
Afkar Capital, an incubator for asset management fund start-ups, was first out of the blocks, securing the centre’s first financial licence in January. This was followed two months later with the centre’s first big-name international clients, in the form of the UK’s Aberdeen Asset Management and Macquarie Capital of Australia.
And in a fitting way to round off its first full year of operations, ADGM this month unveiled Mubadala Capital, the financial business of Abu Dhabi’s strategic investment company, as its first big-name Emirati financial partner.
It is still very much early days for the ADGM. It is finding its feet, and doing so in uncertain economic times.
But its growing international visibility, new sense of purpose and growing membership roster find it starting its second full year in rude health.
jeverington@thenational.ae
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