Abu Dhabi Global Market (ADGM) has announced its first batch of financial technology (fintech) regulatory laboratory (Reglab) companies that will go through its new innovation center.
Two local United Arab Emirates (UAE) fintechs, two Indian and one U.S. fintech start-up will go through the Reglab in Abu Dhabi, which aims to encourage start-up fintechs and provide regulatory assistance and advice to support new technology-based developments in financial services.
The first entrants to ADGM's Reglab 'sandbox', which apes the Financial Conduct Authority (FCA) sandbox in the U.K. and other such support initiatives around the world, will enter a safe place where they can test innovative fintech products, services or business models, while ensuring appropriate consumer protections are built in. The FCA model has proved so popular in encouraging fintech innovation that it is being replicated around the world.
The idea is to promote competition through encouraging disruptive innovation. The ADGM Reglab is the first such fintech regulatory sandbox and framework in the Middle-east and North Africa (MENA) region.
The five initial participants were selected from a pool of 11 applications. They are:
ADGM is a broad-based international financial center located on Al Maryah Island in the heart of the UAE's capital city of Abu Dhabi. It houses the three local regulatory bodies comprising of the Registration Authority; the Financial Services Regulatory Authority (FSRA); and ADGM Courts, which collectively regulate FIs in the country and liaise with international colleagues to ensure best practice.
ADGM is also a free trade zone that aspires to house a range of local, regional and international FIs that can aid the future development of the country. Encouraging fintechs is a part of this strategy.
Commenting on the first cohort in a statement, Richard Teng, CEO of the Financial Services Regulatory Authority of ADGM, said he was "pleased to welcome our first group," and their "transformational solutions".
"We will support our Reglab participants to focus on sharpening their solutions, while leaning on ADGM and its partners to take them through the develop-test-and-implement journey," he said. "This is also a valuable journey for ADGM and the region as we guide the very first team of fintech companies through the regulatory environment to realize their innovations."
The ADGM Reglab authorizes fintech participants for a period of up to two years to develop and test their propositions in their support program, which should be enough time to get any good ideas into the marketplace.
The second batch of applications has recently opened and applications are invited via the ADGB website before the 31 July 2017 deadline.