The Financial Services Regulatory Authority (FSRA), the financial regulator of the Abu Dhabi Global Market free economic zone (ADGM), issued its “Guiding Principles” on its approach to digital asset regulation and supervision. The FSRA is taking a pro-market posture but pledges to obey international safety standards.
Friendly in tone to the crypto industry, the principles pledge to obey international standards in Anti-Money Laundering (AML), contesting the financing of terrorism (CFT), and supporting financial sanctions.
Five principles were issued without a specified date on the official webpage of the ADGM. The titles are Internationally Recognised Regulatory Framework, Dynamic and Market-Oriented Regulations, Risk-focused and Proportionate Approach, Cooperation and Shared Responsibility, and Delivering High Standards of Quality & Service.
Though overall the tone and content of the principles agree with the standard declarations of making the market more dynamic, innovative, and safe, at the same time, there are some explicit points that would define the ADGM regulatory landscape.
According to the principles, the ADGM’s legislative framework will be based on English Common Law, while within the economic zone, the regulator, register and court functions will operate completely autonomously, with a regulatory committee selected by the board to ensure supervisory independence.
As liberal as they sound, these premises will be accompanied by compliance with international AML/CFT standards, close cooperation with other jurisdictions, and “financial sector surveillance” as a part of the FSRA function.
The regulator also aims to cooperate closely with market participants on a “regular but informal” basis. This will contain one-on-one sessions between regulatory and business teams, as well as the working groups of market participants and professionals.
In March 2022, ADGM issued a consultation paper suggesting that licensed companies will be permitted to facilitate nonfungible token (NFT) trading in the jurisdiction. In April, Binance and Kraken became the first overseas companies to receive regulatory approvals to operate in ADGM.
Leave a Reply