In terms of the fintech landscape in the MIddle East, the UAE in particular is already showing strong signs of support for fintech, as well as some early success stories.
Today, Abu Dhabi Global Market (ADGM) announced the launch of its financial technology incubator in the capital’s financial free zone, the Regulatory Laboratory (RegLab).
The step is part of the strategy to make Abu Dhabi a centre for the fast growing fintech industry. Instead of being subject to the full regulatory regime of ADGM, fintech companies will be able to use a lighter ‘RegLab’ framework for up to two years to incubate their products. However, the unique initiative would seek to limit startups accepted into the program to those that “promote significant growth, efficiency or competition in the financial sector”.
From November 2, 2016 until January 31, 2017, ADGM’s regulator, the Financial Services Regulatory Authority (FRSA), will receive applications from local and international fintech participants and businesses to participate in the regulatory laboratory.
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How it works
Under the proposed framework, the firms will be granted two years to develop, test and launch their products and services in a controlled environment.
After that time, those who have demonstrated viable business models will be transferred to the full authorisation and supervisory regime upon successful demonstration of compliance with the authorisation criteria. Those that are not ready will exit the RegLab structure.
Aside from the RegLab project, ADGM has been increasingly active in recent months, appointing a regulatory committee in January and signing a memorandum of understanding with fintech accelerator Flat6Labs earlier this year to develop the fintech eco-system in Abu Dhabi.
Dedicated online portal
Moreover, the FSRA will launch a dedicated online portal to act as an additional resource to provide direct guidance to fintech participants and help them understand regulatory requirements.
Mr Richard Teng, Chief Executive Officer of ADGM, said: “We are very excited to launch the ADGM RegLab and it is encouraging that interests have been pouring in since we announced our plans. ADGM’s commitment to and pursuit of innovation have always been part of its DNA and culture as an International Financial Centre serving the business and financial aspirations of Abu Dhabi and the MENA region.”
“We welcome FinTech applicants from the MENA region and beyond to take advantage of this platform to develop and fulfil their aspirations. Firms and stakeholders can continue to rely on ADGM to help them navigate through the challenging environment of today and tomorrow and accelerate their business growth in this region,” he added.