Commencement of regulatory framework for Robo-advisors by Abu Dhabi Global Market

The Financial Services Regulatory Authority of Abu Dhabi Global Market has issued today its regulatory framework for Digital Investment Managers which is also called ‘robo-advisors’, operating in ADGM.

Investment management services are provided by the Digital Investment Managers using the algorithm-based tools and technology to interact with clients who have the know-how of technology. This technology enables investment managers to provide customized investment management services to clients in a cost-effective and accessible way. Digital Investment Managers have the potential to play a vital role in the promotion of financial inclusion & providing a vast range of options for retail client investors in Africa and Middle East region.  To provide support to the industry, the Financial Services Regulatory Authority has prepared this guide to illustrate how its regulatory framework applies to these businesses and how robo-advisors can better operate in ADGM.

The Chief Executive Officer at Financial Services Regulatory Authority of ADGM, Mr. Richard Teng stated that Robo-advice leveraging data analytics & Artificial Intelligence is an area of Fintech which has huge potential to enhance investment decision making in the Africa & Middle East region. With this guidance, we target to make it easier for digital investment businesses to operate in ADGM and turn to provide greater access to investors of professional investment tools to help achieve their financial aims. As an international financial center, ADGM actively improves its framework & platform to bring innovation and provide support to the varying financial needs of investors, businesses, and consumers.  We look forward to hailing more robo-advisors to establish their presence in Abu Dhabi in ADGM and support investors with their ground-breaking solutions.

The requirements of FSRA, concerning algorithm governance, are carefully calibrated to match international best practices & incorporate principles of transparency, fairness, and accountability.