ADGM FSRA launches Public Consultation to help facilitate the use of eKYC

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has published a consultation paper proposing enhancements to its regulatory framework to help facilitate the use of non-face-to-face digital verification of identity (eKYC) in ADGM and mitigate any associated risks.

The suggested enhancements are in response to the notable increase in the adoption of eKYC to on-board customers in ADGM and are in line with a general trend towards digitalisation of the customer experience across a range of sectors, which has only been accelerated by the global pandemic.

In May 2020 a number of regulatory authorities in the UAE, including the FSRA, published the “Joint Guidance on the treatment of financial crime risks and obligations in the UAE in the context of the Covid-19 crisis” (the Joint Guidance) that, amongst other initiatives, promoted the use of eKYC whilst emphasising that appropriate measures would need to be put in place to mitigate any inherent risks.

The enhancements proposed in the consultation paper build and elaborate upon the principles contained in the Joint Guidance, as well as those in related guidance published by the Financial Action Task Force (FATF).

The proposed updates would impact all entities required to undertake customer due diligence (CDD) in ADGM, including financial services firms authorised and regulated by the FSRA, Designated Non-Financial Businesses and Professions (DNFBPs) and Non-Profit Organisations (NPOs). Consequently, all entities undertaking CDD are encouraged to consider the matters raised in the consultation. The proposed updates will also have wider effect beyond the use of eKYC, such as when on-boarding customers with more than one nationality.

Mr Emmanuel Givanakis, CEO of the ADGM FSRA, said: “As an international financial centre, we are committed to addressing key regulatory challenges such as the development of a framework which encourages the use of eKYC whilst mitigating its inherent risks. We encourage the adoption of innovative technology to further the digitalisation of financial services in ADGM, including meeting all AML requirements. We believe that the proposed updates in this consultation paper will provide further clarity on the use of eKYC for the purposes of customer due diligence. We encourage all firms from across the spectrum of sectors who are required to undertake customer due diligence to consider and respond to these important proposals.”

ADGM invites public feedback and comments on the proposed enhancements, which can be addressed to the following email: consultation@adgm.com

For more information, please visit the dedicated webpage: ADGM Public Consultations.