Overview Jurisdiction Al Reem Expansion Authorities Initiatives ADGM Academy Arbitration Centre Overview Business areas Setting up Operating in Public registers Legal framework Regulation Awareness Collaboration Ecosystem ADGM Sustainable Media News Events Spotlight Podcasts Publications Support Make an enquiry Whistleblowing FAQs
A platform that offers limitless opportunities and paves the way for a brighter future

Abu Dhabi boasts first-class infrastructure and unparalleled global connectivity, making it a premier international destination. Its exceptional qualities make it an ideal location to live, work, and conduct business.

Read about Abu Dhabi's lifestyle
Latest initiatives ADGM Announces Incentive Initiative for Existing Al Reem Island Businesses Transitioning to ADGM ADGM Marks Its Presence on Al Reem by Hosting its First Community Event on the Island
Providing an environment that empowers the future

A financial centre that provides transparency, efficiency, and integrity, through its progressive frameworks, future focused infrastructure, all within a familiar independent legal jurisdiction – ADGM is the perfect platform for success.

Find out how to set up in ADGM
Latest news 24 French Asset Management Firms With $1.6 Trillion AUM Convene for Second UAE – France Investor Meetup ADGM's Financial Regulator fines Sarwa Digital Wealth (Capital) Limited USD 122,500 for making an Offer of Securities in ADGM without Approved Prospectus
Preserve our economies and environment for future generations

ADGM, the centre for a transparent and thriving sustainable finance ecosystem.

More about our Sustainability vision
Highlights ADGM, the Region's Leading Climate Finance Hub, Announces its Role as Principal Partner at COP28 ADGM Implements its Sustainable Finance Regulatory Framework
Stay up-to-date with our wide range of available resources

Our community of business professionals, entrepreneurs, and investors can depend on ADGM to provide timely news and reliable insights.

Read our latest news articles
Upcoming events FSRA Supervision Outreach Session ADGM's 4th Annual FATCA and CRS Awareness Session LINK Networking Series
We are here to help

At ADGM, we offer various support options, including contact details, FAQs, enquiry forms, and a whistleblowing form.

View available support options
Some of our FAQ topics
  • Getting started
  • Foundations regime
  • Resolution for incorporation
  • Existing auditors
  • New auditors
  • ACCESSADGM
  • Announcement

    service

    share

    facebooktwitterlinkedin

    ADGM Releases Regulatory and Governance Regime for Robo-Advisors

    ADGM FSRA 15/07/2019

    Framework will promote fairness, accountability and transparency in the use of algorithm-based tools.

    The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has today issued its regulatory framework for Digital Investment Managers (also known as ‘robo-advisors’), operating in ADGM.

    Digital Investment Managers provide investment management services using algorithm-based tools and technology to interact with more tech-savvy clients. This technology allows investment managers to provide tailored investment management services to clients in a cost-effective and scalable way. Digital Investment Managers have the potential to play an important role in promoting financial inclusion and providing a wider range of options for retail client investors in the Middle East and Africa region. To support the industry, the FSRA has prepared this guidance to illustrate how its regulatory framework applies to these businesses and how robo-advisors can operate more effectively in ADGM.

    Mr Richard Teng, CEO, Financial Services Regulatory Authority of ADGM, commented: "Robo-advice leveraging AI and data analytics is an area of FinTech that has enormous potential to improve investment decision making in the Middle East and Africa region. With this guidance, we aim to make it easier for digital investment businesses to operate in ADGM and in turn provide investors with greater access to professional investment tools to help achieve their financial goals. As an international financial centre, ADGM actively enhances its framework and platform to support innovation and the varying financial needs of businesses, investors and consumers. We look forward to welcoming more robo-advisors to establish their presence in Abu Dhabi in ADGM and support investors with their innovative solutions.”

    The guidance outlines the key following areas:

    1. regulatory permissions that may be required to provide digital investment services in or from ADGM
    2. how the FSRA will apply its authorisation criteria in key existing areas of technology governance, suitability and disclosure, and newer areas such as algorithm governance

    The FSRA’s requirements, with respect to algorithm governance, are closely calibrated to match international best practices and incorporate principles of fairness, transparency and accountability. These include requirements for:

    • human oversight over the design, performance and security of the algorithm model;
    • ensuring that the algorithm model is not affected by possible behavioural biases;
    • adequate safeguards to protect the integrity of the algorithm model; and
    • ensuring the outcomes produced by the algorithm model are explainable, traceable and repeatable.

    In line with the FSRA’s risk-proportionate regulatory approach and framework, the guidance also states that the FSRA will permit Digital Investment Managers to hold a lesser amount of prudential capital should they meet the stipulated criteria and requirements.

    The supplementary guidance is available here.

     

    For further enquiries, please contact:
    Joan Lew
    joan.lew@adgm.com
    Telephone: +971 2 333 8858