5 Proposed Amendments to ADGM Capital Market Regulations and Rules

Image credit: Abu Dhabi Global Market

The Abu Dhabi Global Market (ADGM) continues its mission of becoming an internationally established financial centre by proposing amendments to its capital market regime.

They have invited comments on the proposal to make various amendments to the ADGM’s regulations and FSRA rules, most notably the following:

1. Remote Members Regime: Granting Remote Members access to ADGM-based exchanges or clearing houses. A larger pool of potential members that a Remote Member framework would allow would raise market awareness and trading interest in Recognised Bodies which are located in the ADGM. It would also permit greater market efficiency.
2. Elimination of Duplicate Transaction Reporting Requirements: Current FSMR subsections 149(1), (2), and (3) coexist to cater to the EU’s monitoring of highly fragmented trading activity across multiple markets. This is an attribute which is not seen in the ADGM. The proposal eliminates the reporting requirement for Authorised Persons contained in FSMR subsections 149 (1) and (2), and expand the reporting requirements imposed on RIEs and MTFs contained in subsection 149 (3).
3. Price Stabilisation: Part 8 of FSMR currently exempts Price Stabilisation from being considered Market Abuse if such behaviour conforms to certain requirements contained in the Price Stabilising Rules section in Chapter 6 of the MKT. One of the FSRA’s proposals is to limit the parties allowed to engage in such conduct, as well as to add more transparency to the process by requiring the Stabilisation Manager to contain a current register describing all interactions with its appointed Stabilisation Agents throughout the term of the Stabilisation Window.
4. Non-ADGM ‘Remote’ Bodies (Terminology Change): The broad use of the term ‘Recognised Body’ results in the generic application of regulatory requirements to both ADGM-based and non ADGM-based clearing houses and exchanges. This may add unnecessary burden to the latter group. Distinguishing Recognised Bodies from remote Bodies will help to provide additional clarity to both FSMR and MIR.
5. Other Proposed Policy Amendments

These amendments are in line with their efforts to regulate risk in capital markets activities in and from the ADGM, while also serving to raise the market awareness of, and trading interest in the ADGM. International investors will be more incentivized to trade and settle their trades on ADGM-based exchanges because of the greater convenience and choice. Also, the introduction of remote trading members, means that foreign investors have increased access to the Abu Dhabi and regional markets.

Comments should be in writing and sent to the address or email specified below. People sending comments by email should use the Consultation Paper number in the subject line, and if relevant, identify the organisation represented when providing comments. The deadline for commenting on this proposal is 2 January 2018.

Consultation Paper №5 of 2017

Financial Services Regulatory Authority

Abu Dhabi Global Market Square

Al Maryah Island, PO Box 111999

Abu Dhabi, UAE

Email: consultation@adgm.com