ADGM issues regulatory framework for robo-advisors

Pedro Gonçalves
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ADGM issues regulatory framework for robo-advisors

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has rolled out a regulatory framework for digital investment managers, also known as "robo-advisors", to boost fintech activity and provide investment-related services, the regulator said.

The regulatory framework issued by ADGM outlines permissions that may be required to provide digital investment services in or from the financial centre and how the FSRA will apply its authorisation criteria in technology governance and newer areas such as algorithm governance.

Richard Teng, the CEO of Financial Services Regulatory Authority of ADGM, said that robo-advice has enormous potential to improve investment decision making in the Middle East and Africa region.

We look forward to welcoming more robo-advisers to establish their presence in Abu Dhabi in ADGM and support investors with their innovative solutions"

"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," Teng said.

"We look forward to welcoming more robo-advisers to establish their presence in Abu Dhabi in ADGM and support investors with their innovative solutions," he added.

According to ADGM, digital investment managers have the potential to play an important role in promoting financial inclusion and provide 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-advisers can operate more effectively in ADGM," the statement said.

The guidance also states the FSRA will allow digital investment managers to hold a lesser amount of prudential capital if they meet the stipulated criteria and requirements.

 

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