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Abu Dhabi, UAEWednesday 19 December 2018

By supporting the stimulus, we can be well-prepared for long term growth and the prosperity of future generations

Following from the Dh50 billion package announced this week, Abu Dhabi Global Market is ready to further contribute towards a thriving financial ecosystem, writes its chairman Ahmed Al Sayegh

Al Maryah Island, the commercial free zone in Abu Dhabi. The emirate's economy is set to grow steadily, S&P said. Courtesy Mubadala
Al Maryah Island, the commercial free zone in Abu Dhabi. The emirate's economy is set to grow steadily, S&P said. Courtesy Mubadala

At Abu Dhabi Global Market (ADGM), we were excited by the announcement that Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, made recently of a massive stimulus package of Dh50bn for Abu Dhabi’s economy.

As an International Financial Centre tasked with overseeing Abu Dhabi’s financial free zone, ADGM views the stimulus package as a significant boost to the overall competitiveness Abu Dhabi’s economy; one that is bound to provide a positive sense of direction to local and international investors.

To support Abu Dhabi’s ambitious economic diversification and growing role as a financial and commercial hub, ADGM was established in October 2015. It provides a platform for mutual growth and success, working with a wide range of partners – through a financial hub underpinned by internationally recognised regulations and standards, that puts innovation first.

Co-operation and innovation are central to our work. Alongside various local authorities and partners, we have established a comprehensive financial sector and innovation ecosystem, which support the financial services of Abu Dhabi and the UAE.

Comprising three independent authorities: ADGM Courts, the Financial Services Regulatory Authority and the Registration Authority, ADGM governs Al Maryah Island, which is the designated financial free zone.

We have issued more than 900 commercial registrations to firms spanning the full ambit of the financial sector, from banking and insurance to professional service providers and foundations. They operate within an English Common Law framework, with world leading regulation and unparalleled infrastructure on Al Maryah Island.

The priorities of the Dh50bn stimulus programme reassured us that ADGM is on the right path of development and growth for the nation.

The Government’s decision to allow companies operating in Abu Dhabi free zones to obtain dual licences will significantly boost the competitiveness of the Emirate’s business environment.

Indeed, it was only recently that ADGM’s Registration Authority and the Abu Dhabi Department of Economic Development began a dual licensing framework for non-financial firms, to make doing business easier.

We are also working closely with national financial services regulators with a view to harmonise regulatory frameworks and foster capital flows between the Financial Free Zone and the broader UAE. We eagerly await more detailed plans and information about how we can make necessary changes to support the overall initiative.

In addition, ADGM is a firm believer in small and medium-sized enterprises (SMEs) and the core need to stimulating this sector as part of the UAE’s economic transformation plans. To support Abu Dhabi’s innovation ambition, ADGM aims to establish an environment where entrepreneurs, financiers and the wider start-up community can convene to foster a vibrant interactive ecosystem.

In 2016 we launched our Regulatory Laboratory (Reglab), the sandbox for innovative startups to test their financial technology solutions in a safe and controlled environment. It is focused on promoting inclusion and access to quality financial services for the SME sector.

In our third batch of applications, we received a record 36 local and international submissions. ADGM RegLab firms have the real advantage of being able to live-test their solutions with real consumers.

Moreover, our hosting of Plug and Play, the world’s largest start-up accelerator based in Silicon Valley, and KPMG Digital Village, a global ecosystem builder dedicated to facilitating collaboration between start-ups and major corporations, will serve to support the new stimulus plans.

Finally, in reinforcing Abu Dhabi’s openness to technology and innovation, the establishment of the Abu Dhabi Accelerators and Advanced Industries Council (Ghadan) by Sheikh Mohammed couldn’t have been timelier. They will stimulate technological creation and attract extra investment to increase the pace of economic diversification.

ADGM recently began developing an electronic-Know-Your-Customer (e-KYC) service, in collaboration with an industry consortium comprising Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank and UAE Exchange.

The consortium will facilitate the use of blockchain – the secure distributed ledger technology – to improve the competitiveness of Abu Dhabi’s financial institutions in meeting regulatory requirements when familiarising new customers with their services.

In addition, In April, ADGM proposed the world’s first crypto-asset regulatory framework, to make it safer for investors to gain exposure to crypto investments. The framework supports the development of the wider crypto industry by addressing key risks including anti-money-laundering and counter-terrorist financing, consumer protection and technology governance.

These two initiatives are also bound to enhance the use of new technologies, transforming the way we do business in the UAE and supporting the economic competitiveness of Abu Dhabi.

The UAE and indeed the wider Mena region are experiencing a dynamic period – one that raises both challenges and opportunities across the board.

At ADGM we are committed to, and will continue to support, the Government’s initiatives as Abu Dhabi’s International Financial Centre, through our internationally-recognised legislative framework, comprehensive financial ecosystem and commitment to innovation.

By doing so, we are honoured to play a part in supporting the development of the Emirate’s economy, and towards the prosperity of future generations.

Ahmed Al Sayegh is chairman of Abu Dhabi Global Market