Enactment of Codified Corporate Beneficial Ownership and Control RegulationsADGM FSRA 17/04/2018
The Abu Dhabi Global Market (ADGM) board of directors approved the codification of existing corporate beneficial ownership and control (BOC) regulations on April 3rd 2018. The enactment of the new BOC regulations is scheduled to take place on April 17th, 2018. The new regulations will have the effect of safeguarding and promoting ADGM's reputation as a stable and responsible financial centre, and will reinforce its commitment to adhere to the highest global standards of financial crime prevention.
A key component in detecting and averting financial crime is the accessibility of information relating to corporate BOC. ADGM places great significance in implementing regulations that prevent and combat financial misconduct. The enactment of the new codified corporate BOC regulations enhances transparency and accountability both at a national level and in conjunction with other regulatory bodies globally.
ADGM's aim in codifying existing BOC regulations is to stay in line with international best practices on anti-fraud and financial crime prevention. The regulations will entrench the centre's compliance with Financial Action Task Force (FATF) recommendations 24 and 25, which deal with transparency and identifying the beneficial ownership of legal persons and legal arrangements. In addition, the new BOC regulations meet requirements set out in the 4th Anti Money Laundering (AML) directive which focuses on maintaining accurate and current information on the BOC of corporate entities. CEO of the Registration Authority; Dhaher Bin Dhaher Al Mheiri said, "The introduction of the new beneficial ownership regime by enactment of ADGM Beneficial Ownership and Control Regulations marks the new era of openness and transparency. This is the first and only standalone legislation to date. This legislation codifies provisions for maintaining accurate and up to date information on beneficial ownership and control of legal entities. The new regulations is introduced in order to provide clear evidence of how the Registration Authority collects and maintains information on registrable beneficial owners, and clear procedures on access to information on beneficial ownership of legal entities registered and incorporated in ADGM. This legislation demonstrates ADGM's commitment towards transparency, thorough due diligence during onboarding process, commitment to FATF recommendations, financial crime prevention and adherence to anti-money laundering guidelines."
Mohamed Jawad Shalo, Head of Financial Crime Prevention Unit FSRA added: "The codification of the BOC regulations is the first of its kind in the UAE and the region. This continues to demonstrate ADGM's commitment to be an international financial centre that recognizes international standards and best practices. It will assist ADGM in meeting international tax reporting requirements and support its profile for the upcoming OECD assessment and FATF mutual evaluation."
ADGM is one of a few jurisdictions globally that have decided to codify provisions in relation to the disclosure of BOC of corporate entities. The codification process was in line with international standards and followed a benchmark analysis of regimes applicable in Guernsey, Jersey, and the UK. The central features of the codified corporate BOC regulations include the creation of a new registry that maintains thorough, accurate and up-to-date information and the amendment of the definition of beneficial owner to include any person with 25% or more of shares or voting rights in a company. Furthermore, ADGM will impose positive obligations on its entities to obtain, maintain and report up-to-date BOC information.
The registry will incorporate appropriate privacy protection mechanisms and will include sanctions for noncompliance with the new regulations. The ADGM Financial Services Regulatory Authority (FSRA) will still possess jurisdiction for the detection, prevention and avoidance of illicit activities within ADGM. The Registration Authority will also be under an obligation to disclose information to other regulatory and tax authorities if required for the purpose of complying with international treaties, or pursuant to lawful requests. The codification will harmonize the approach across all ADGM entities and will support the global effort to combat financial crime by providing enhanced transparency due to the strengthening of BOC regulations.
About Abu Dhabi Global Market:
Abu Dhabi Global Market (ADGM), an international financial centre (IFC) located in the capital city of the United Arab Emirates, opened for business on 21 October 2015. Established by UAE Federal Decree as a broad-based financial centre, ADGM plays a pivotal role in positioning Abu Dhabi as a global centre for business and finance. It serves as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world.
Based in Abu Dhabi, home to one of the world’s largest sovereign wealth funds and one of the highest concentrations of high-net-worth-individuals in the world, ADGM's strategy is anchored by Abu Dhabi's key strengths including private banking, wealth management, asset management and financial innovation. Comprising three independent authorities: the Registration Authority, the Financial Services Regulatory Authority and ADGM Courts, it enables registered financial institutions, companies and entities to thrive and operate within an international regulatory framework based on Common Law.
Since its inception, ADGM has been awarded the "Financial Centre of the Year (MENA)" for two consecutive years for its initiatives and contributions to the financial and capital markets industry in the region.*
As part of its mandate, ADGM oversees and governs the Al Maryah Island, a designated financial free zone covering 114-hectares of financial and commercial services including residential, retail, leisure, hotel and office developments. For more details of ADGM, please visit www.adgm.com or follow us on Twitter: @adglobalmarket and Linked: ADGM
* Source: The Global Investor Middle East and North Africa (MENA) Awards
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Afra AL Rashdi
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