As we approach the midpoint of February, the Abu Dhabi Global Market (ADGM) has been in the spotlight for celebrating achievements as well as penalising firms for breaching regulations.
The Financial Services Regulatory Authority (FSRA) of ADGM has imposed penalties on six financial institutions for contraventions of the Common Reporting Standard Regulations 2017 (‘the Regulations’). These fines totalled AED 170,000.
The actions taken by the FSRA address failures (to the extent applicable in each case) to:
- follow due diligence procedures as required by the Regulations;
- keep records of the performance of due diligence;
- report required information in a complete and accurate manner; and/or
- submit the required annual information return.
The Common Reporting Standard (CRS) governs the collection of financial account and tax-related information and its global exchange between international regulatory bodies. The regulation sets out the scope of financial information that financial institutions must collect and report, as well as the due diligence procedures that those financial institutions must follow.
CRS was developed by the Organisation for Economic Co-operation and Development (OECD) and established in the United Arab Emirates in 2017.
Emmanuel Givanakis, chief executive officer of the FSRA at ADGM, said: “ADGM is committed to complying with international standards. The FSRA actively supports the UAE’s commitment to international tax information exchange as part of a broader national agenda to enhance financial transparency.
“We achieve this through maintaining a robust supervisory framework and enforcement regime. Compliance with the requirements of the CRS is a top priority of the FSRA, as it aligns with our objective to promote and enhance the integrity of the ADGM financial system. We are steadfast in our commitment to take regulatory action against practices intended to circumvent tax reporting.”
Not all bad news
Although the fines are a necessary punishment for failing to adhere to regulations, ADGM has also shed light on more positive news for its ecosystem in February. It announced a Memorandum of Understanding (MOU) with the Solana Foundation, a non-profit organisation dedicated to decentralisation, adoption, and security on Solana network. The partnership will enhance distributed ledger technology (DLT) solutions and advance blockchain innovation in the region.
Hamad Al Mazrouei, CEO of ADGM Registration Authority said: “Our strategic alliance with the Solana Foundation marks a key milestone in cementing ADGM’s leadership in the blockchain sector, and represents a direct reflection of the effectiveness of our DLT Foundations Framework and our commitment to the growth and the development of the blockchain sector.
Furthermore, in February, Deus X Capital, a $1billion family-office backed investment and operating company and Bridgetower Capital, a provider of digital asset and blockchain infrastructure with $800million AuD, partnered to create Bridgetower Middle East (ME). Based in ADGM, the platform will also offer private equity/venture building facilitation, to support and grow the blockchain digital asset ecosystem in the UAE region.
