All eyes turn to Abu Dhabi Global Market as it selects first members

The Abu Dhabi Global Market will be issuing court procedure rules and practice directions early this year. Mona Al Marzooqi / The National

The new year is set to be a crucial time for Abu Dhabi Global Market, the UAE’s new financial free zone, as it prepares to welcome its first member companies.

ADGM was set up in 2013, and since then, under a team led by the chairman Ahmed Al Sayegh, has carefully put in place the structure and personnel to become a leading regional and global financial centre, in line with the capital’s long term economic strategy.

It declared itself open for business in October last year, in anticipation of the first applications for registration from UAE and international financial institutions.

Although ADGM will not speculate on the timing or identity of the initial batch of applicants, some in the UAE financial community expect there to be no shortage of interest in setting up on the site on the capital’s Al Maryah Island.

“I think there will be a flurry of interest and expect a couple of big local financial institutions, as well as at least one big global firm, to go there initially. The advantages of being an ‘early mover’ are clear for any firm that wants to build significant business in Abu Dhabi,” said one financial professional in the capital.

The initial focus of ADGM will be on private banking and wealth and asset management, but it has been designed to accommodate the full spectrum of the financial services industry, subject to market demand.

“ADGM’s objective is to build a critical mass of domestic and foreign financial institutions, which provide a wide range of financial services that are the hallmark of an international centre,” ADGM said.

“Most of the infrastructure is now in place – regulation, legislation and registration process. Firms and individuals can now apply for financial services licences to operate out of the centre. The focus is now very much on product development,” it added.

Last year ADGM took roadshows to India and America, where senior executives met representatives of a number of institutions as well as regulators.

The India roadshow came as the UAE had been extending and reinforcing ties with Indian financial institutions.

“ADGM will continue to reach out to key markets across the region, as well as in the US, Europe, India and Asia, to demonstrate the offerings of Abu Dhabi as a sustainable economy,” it said. “ADGM has always said that it understands and values the importance of building and nurturing long-term partnerships and collaborations locally and internationally. ADGM will continue to engage key stakeholders and customers, locally and internationally, to facilitate understanding of its internationally aligned regime.”

The international approach extends to the workings of the ADGM regulator, under the chief executive Richard Teng, who has had a busy year overseeing the drafting of regulations for current and future activities of ADGM.

Several intial agreements were signed last year, and more are expected this year with UAE and international regulatory and multilateral organisations. ADGM has said it wants to be as inclusive as possible in its approach to regulation. Its rules are based on the United Kingdom’s Financial Services and Markets Act, but it has also been influenced by the regulatory regimes in Singapore – Mr Teng’s home country – and Hong Kong.

The regulatory set-up also has unique features, for example in relation to the use of “restricted-scope companies” by family offices, a new type of company designed to be used as a holding company for institutions and professional investors.

There are new structures too for investment companies, trusts, partnerships and limited liability partnerships, extending the range of products and services ADGM can offer to fund managers. “Previously, many activities such as trust providers were managed offshore. ADGM wants to bring all of those activities to Abu Dhabi,” it said.

The ADGM courts, under the chief justice David Hope, have appointed four judges with extensive careers behind them in international law, and have put in place most of the structure for an independent legal and arbitration system based on English common law.

The ADGM registrar, under the chief executive Dhaher bin Dhaher Almheiri, intends to reach out to more stakeholders this year through roadshows, engagements and marketing campaigns, as well as to enhance its online platform.

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