Emmanuel Givanakis, CEO of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (AGDM), talks to Economy Middle East about the evolving financial regulatory landscape in the UAE and its role in ensuring a thriving, transparent and efficient financial ecosystem moving forward.
ADGM emerged as the region’s fastest-growing international financial center in 2023 with a 35 percent increase in assets under management. What role does a regulatory authority like yours play in this? What are your 2024 projections in this respect?
As a risk-based regulator, it is the financial services regulator’s role to ensure the regulatory environment is based on integrity, fairness and transparency. This includes having regulations that align with international standards as well as supporting the financial sector in its ability to provide world-class financial services and products to investors. The FSRA of ADGM has achieved this by maintaining a robust, comprehensive and progressive regulatory framework with respect to collective investment funds.
An example of this was our announcement of the introduction of a Private Credit Fund framework last year, which focused on alternative financing for private enterprises.
The global private credit market has experienced significant growth in the past decade. The framework provides the opportunity for fund managers to create Private Credit Funds in ADGM to support the FSRA’s objective to continue to enhance and develop ADGM’s comprehensive and vibrant financing ecosystem, for both professional investors and those companies seeking funding.
Moreover, the regulatory framework is also helping to increase and enhance the range of funds available in ADGM, attracting even greater participation by start-ups and SMEs, and reinforcing its standing as a jurisdiction of choice for businesses and a hub for innovation.
Looking ahead, the FSRA is always seeking ways to enhance its regulatory framework with an ongoing focus on innovation and sustainability, building on the significant progress the FSRA has made in 2023 and previously. This includes reviewing our existing comprehensive funds regulations and rules. Any review will need to take into consideration the growing adoption of digital assets as an investment class as well as the tokenization of securities including fund units.
The UAE recently exited the FATF list. What key steps do institutions like the FSRA have to take to ensure countries stay off the list?
ADGM and its regulatory agencies are especially aware of the national efforts in this area, and as the financial services regulator in ADGM, we remain committed to playing our part in combating financial crime in collaboration with other relevant regulatory agencies, particularly across the UAE.
From the time it was operational, the FSRA of ADGM implemented a comprehensive Anti-Money Laundering / Counter Financing of Terrorism AML/CFT Regulatory Framework, which we further enhanced as we have gone forward, in alignment with relevant UAE Federal laws and legislation.
As part of our ongoing review and enhancement of our framework in December 2023, we announced revisions to our Anti-Money Laundering and Sanctions Rules and Guidance that clarified the requirements to ensure compliance with targeted financial sanctions. The revisions are relevant to all firms subject to the provisions in the AML Rulebook, including authorized firms in the financial services sector and Designated Non-Financial Businesses and Professions.
We are also committed to our continuing collaboration with the Executive Office of AML/CFT, the CBUAE and other key stakeholders of the UAE in fortifying its AML/CFTF framework and aligning with the UAE’s national risk assessment initiatives.
This collaboration aims to safeguard the integrity of the UAE’s financial ecosystem through enhanced policies, procedures, and controls to effectively manage the risks of money laundering and terrorist financing.
ADGM has published a consultation paper on a comprehensive whistleblowing framework. How does a strong whistleblowing regulation help an economy and companies operating in it?
In line with global movements enhancing transparency, accountability, and integrity, ADGM believes a culture supporting speaking up with confidence and without fear of retaliation is part of any progressive business environment. Accordingly, a robust whistleblowing regulatory framework is instrumental in fostering a transparent and ethical business environment, benefiting both the economy and the companies operating within it.
In December 2022, ADGM launched the Guiding Principles on Whistleblowing with a focus on six key aspects of whistleblowing, reflecting ADGM’s emphasis on transparency, accountability and market integrity within the center.
Following this successful launch, the FSRA has worked closely with the Registration Authority (RA) of ADGM in developing a robust framework to support its licensed companies in their efforts to build and maintain internal whistleblowing systems and controls that ultimately protect and support persons raising concerns where appropriate.
This has led to publishing a consultation paper to introduce a comprehensive Whistleblowing Framework, complementing ADGM’s existing regulatory frameworks and building upon the publication of ADGM’s Guiding Principles on Whistleblowing in 2022.
The framework will require entities operating within ADGM to implement policies and procedures that are proportionate to the scale and complexity of their operations to support effective whistleblowing.
Our proactive approach not only mitigates risks in order to prevent financial losses but also enhances investor confidence and strengthens the culture of regulatory compliance.
Ultimately, these enhancements will contribute to building a culture of integrity, accountability, and trust within organizations, which is paramount for sustainable growth and competitiveness in today’s dynamic business landscape not just in Abu Dhabi and UAE but beyond our borders, globally.
ADGM recently partnered with Mohamed bin Zayed University of Artificial Intelligence to advance the role of Artificial Intelligence (AI) in regulatory compliance. What role does AI currently play in the FSRA or ADGM in general? How do you see this role progressing in 2024?
Artificial Intelligence (AI) is a key focus area for the FSRA as part of our broader focus on new-age technology through fintech innovation. This future of finance can provide greater access to the financial services industry by consumers, whilst also enhancing investor protection and promoting integrity in the financial system. To that end, the FSRA is working towards advancing thought leadership and capabilities in financial regulation and compliance related to AI.
Our focus is on advancing the role of AI to better achieve regulatory outcomes within the financial services sector. In navigating the transformative potential of AI for regulatory compliance, we have recognized that collaboration and open dialogue are critical. Our collaboration with MBZUAI stems from this thought process, and we will be actively inviting insights, feedback, and partnership opportunities from the wider financial community.
A part of the collaboration with MBZUAI is to provide reliable solutions for enhancing regulatory compliance and operational efficiency in providing financial services, through Regulatory Technology (RegTech) and Supervisory Technology (SupTech) solutions.
An example of this is the focus on a multi-step approach, by training an AI algorithmic model to extract meaning and context from financial regulations and rules administered by the FSRA. The regulatory information from the AI model will be aimed at providing financial services firms with a tool in which they can potentially improve or automate their decision-making processes to achieve regulatory compliance.
In its next phase, we aim to introduce an industry-facing version of what we call the ‘Risk Analyser’ will be introduced, designed to enable financial firms to develop their regulatory submissions or assess their compliance with FSRA’s regulations and rules in a more focused and compliant manner.
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Considering ADGM’s recent expansion into Al Reem Island, and with businesses having a transition period until December 31, how do you anticipate this move will impact the international businesses operating there?
ADGM’s objective is the seamless transition of existing businesses on Al Reem. This is not limited to just the international companies but also extends to the local and regional companies based on Al Reem Island and remains a top priority for ADGM.
Our focus on this objective has led to constructive and collaborative engagement with other regulatory authorities, which has then shaped several initiatives being introduced in the form of support to these businesses to facilitate orderly transitional arrangements.
For financial services businesses currently on Al Reem, the benefits are that they will be in a jurisdiction that directly applies common law and has a regulatory framework that is innovative and progressive, whether it is within the traditional finance sector or the new-age finance sector.
The international financial center’s vibrant ecosystem gives access to 1800+ operational businesses, including asset managers, global funds, financial institutions, leading advisors, law firms, capital providers, tech and digital companies, as well as family offices, among others.
It also gives access to high-profile business events such as Abu Dhabi Finance Week (ADFW).
About Emmanuel Givanakis
Emmanuel Givanakis is the CEO of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), where he oversees the financial services regulatory framework that governs financial services activities within the ADGM.
Emmanuel joined ADGM in October 2014 as the Head of Policy & Legal, overseeing the establishment of ADGM’s legislative and regulatory framework, which was a pivotal step in the creation of ADGM as an international financial center.
His legal and financial services regulatory expertise as well as his management experience span over 30 years. Prior to joining ADGM, Emmanuel held a number of senior legal roles and leadership and management positions in both Australia and the UAE, including senior positions at the Dubai Financial Services Authority and the Australian Securities and Investments Commission (ASIC).
His extensive knowledge and skills include legal, policy, regulatory risk and compliance (prudential and conduct of business) as well as corporate governance, which place him in a strong position to ensure the timely identification of risks and their mitigation.
Emmanuel holds a Bachelor of Laws from the Queensland University of Technology, as well as qualifications in Islamic Finance and a Graduate Diploma in Company Secretarial Practice (Governance Australia). He has been practicing law for over 30 years after being admitted to the Bar in Australia in 1994 (Queensland, New South Wales and the High Court of Australia).
In 2003, in recognition of his work at ASIC he was awarded the Australian Public Service Medal (National Australia Day Council Achievement Award).
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