FSRA commences public consultation on proposed Third Party Financial Technology Provider regulatory frameworkADGM FSRA 25/11/2020
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has published a consultation paper proposing a regulatory framework to govern the provision of third party financial technology (FinTech) services in the ADGM.
ADGM’s strong emphasis on the robust supervision of FinTech has led to firms expressing interest in providing additional financial informational services to their customers. These firms, known as Third Party Providers (TPPs), do not hold their customers’ funds but instead intermediate the relationship between customers and other financial institutions. In other jurisdictions such as the UK and Australia, the growth of TPPs has been further enabled by the introduction of Open Banking and Open Finance (Open Finance) frameworks, which allow customers more control over their data.
The proposed regulatory framework prepares and regulates such FinTech firms for working with financial institutions in a secure and efficient manner that protects the data and interests of their customers. It also provides a strong foundation on which to build an Open Finance strategy to support business growth and financial innovation in the digital platform economy.
Mr Richard Teng, CEO of the ADGM FSRA said: “We are excited to introduce a forward-looking framework that supports technological collaboration between financial institutions and FinTech firms. With this framework in place, customers and financial institutions can be assured that TPPs will have appropriate security controls in place to safeguard their data and systems. Through this consultation, we look forward to collaborating with the industry to support the introduction and growth of Open Finance in the region.”
ADGM invites public feedback and comments on the proposed TPP framework, which can be addressed to: email@example.com.
The consultation paper and proposed legislative amendments are available here:• Proposed Third Party Financial Technology Provider regulatory framework