Regulatory Alerts2020-01-01
Proposed Regulatory Framework for Third Party Financial Technology Services in ADGM
The Financial Services Regulatory Authority of Abu Dhabi Global Market proposes a new regulatory framework classifying third-party financial technology providers as a distinct regulated activity that facilitates secure data access and payment initiation without holding client assets. Authorized firms must connect to the ADGM Digital Lab for API compliance, maintain a $50,000 base capital if initiating transactions, secure minimum $150,000 professional indemnity insurance, and adhere to strict operational, cyber, and conduct of business standards. This framework establishes baseline prudential and risk management requirements to support Open Finance innovation while mitigating contagion, data security, and customer protection risks in the digital economy.