The Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC) and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) (the Regulators) have jointly issued “Guidelines for Financial Institutions Adopting Enabling Technologies” (the Guidelines).
The Guidelines, published today, set out cross-sectoral principles and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services. The enabling technologies include: Application Programming Interfaces; Big Data Analytics and Artificial Intelligence; Biometrics; Cloud Computing; and Distributed Ledger Technology.
The objectives of these Guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed.
The issuance of the final Guidelines follows a public consultation launched in June 2021. In finalising the Guidelines, the Regulators have considered international standards, industry best practices and the valuable feedback received from market participants during the public consultation.
The Guidelines will apply to all financial institutions that are licensed and supervised by any of the Regulators and that utilise the enabling technologies, irrespective of the financial activities conducted.

 

 

 

Teams from the United Kingdom and United States have been crowned the winners of United Arab Bank’s (UAB) and the Abu Dhabi Securities Exchange’s (ADX) respective challenges under the first phase of the SCA Fintech Megathon. The first-of-a-kind nationwide Megathon, launched in May 2021 under the patronage of H.E. Abdullah bin Touq Al Marri, Minister of Economy (MoE) and Chairman of the Board of the Securities and Commodities Authority (SCA), is aimed at furthering the development of the fintech industry by bringing together a large army of startups specialized in financial services technology.
Powered by Fintech Galaxy’s FinX22 platform, the Megathon will continue to run until February 2022 and includes workshops and training sessions, plus two hackathons to showcase innovations that help better address challenges.
As part of the Megathon, participating teams were challenged with creating innovative technical solutions to several challenges facing the financial services sector under eight thematic areas: asset management/investment advisory, digital assets and cryptocurrencies, crowdfunding, forex, e-KYC form, SME financing, financial inclusion, suptech and regtech.
The first round of the Hackathon which consisted of two of the innovation challenges sponsored and organized by the Megathon’s strategic partners – UAB and ADX – has ended.
Commenting at the conclusion of the first round of the Hackathon, H.E. Dr. Maryam Al Suwaidi, CEO of SCA, said: “An important part of SCA’s mission is safeguarding the rights of investors, promoting sound practices and creating an ecosystem attractive to investors and innovation. With this in mind, we were delighted and proud to witness the forward thinking and innovation of all the participating teams, especially those which have won our two innovation challenges held so far. Fintech is an integral part of the UAE’s financial services industry – and indeed, that of the entire world – and looking forward, it is vital that we utilize technology and creative thinking to address challenges both, seen and unseen, in the sector. These teams demonstrated the type of thinking that will be necessary to enhance the customer experience.
The second round of the Hackathon will kick off in December 2021. The FinX22 platform will enable the screening, interaction, and collaboration among innovators and financial institutions, allowing them to crowdsource and prototype fintech solutions prospectively in Fintech Galaxy’s API Sandbox. It will promote partnerships and collaboration between established and startup fintech firms as well as leading banks from across the UAE.

 

 

 

The Capital Market Authority (CMA) announced the start of receiving applications for applicants to obtain FinTech ExPermit for the fifth batch. This comes as a continuation of the series of FinTech Lab successes in its previous four batches and in continuation of the CMA's keenness to regulate and develop the Saudi financial market and make it an attractive environment for local and regional investors by supporting the financial technology industry and developing innovative products in the capital market.
The CMA is looking forward to receive applications for obtaining a FinTech ExPermit for the fifth batch from all those interested in financial technology and entrepreneurs until the date of December 15, 2021, provided that their products meet the requirements, most notably must involve a securities activity, i.e. within the scope of the activities that the CMA regulates and must be at a sufficiently advanced stage of development to mount a live test, in addition to that, promotes significant growth, efficiency at the Kingdom capital. The CMA also clarifies that it receives applications from applicants during the year, and those applications received are evaluated and studied in batches.
The FinTech Lab is a legislative experimental environment that allows providers of financial technology products and services to test their innovative business models within specific criteria, time and regulatory requirements under the supervision of CMA. The lab receives applicants from inside and outside the Kingdom to experiment with financial products and services related to securities activity with innovative business models that are ready for testing in an experimental environment.
In this regard, the CMA has supported the creation of a legislative and regulatory environment for financial technology products in the financial market, and worked on continuous development to attract innovative business models and emerging technologies that open new horizons to facilitate financing and stimulate investment to build economic entities that enhance the depth and persity of the financial sector and are in line with the objectives of the Financial Sector Development Program, one of the main programs of the Kingdom's Vision 2030.
It is worth noting that the CMA launched the Fintech Lab in December 2018, which is one of the significant steps that aims to support and develop innovation in the Fintech field in the Saudi financial market. In addition, the Fintech Lab enables the Fintech developers to experiment their innovative capital market products and services, within specific controls, parameters and timeframes under the CMA's supervision. Subsequently, CMA opened the first batch of applications for the FinTech ExPermit in February 2018. Since then, the CMA continued its efforts to receive applications in various batches. As a result, CMA Board of Commissioners granted 17 FinTech ExPermits in different business models including Equity Crowdfunding, Robo-advisory, Offering and Investment in Debt Instruments, platform that uses Distributed Ledger Technology (DLT) to arrange and offer of securities and custody services, and Social Trading Platform. During the second half of 2021, the CMA has adopted amendments to the instructions for the financial technology experiment permit. The most prominent of these amendments included the addition of definitions to clarify the nature of the FinTech Lab, as well as the addition of instructions for pursuit business in FinTech Lab.

 

As part of the Capital Markets Authority’s (CMA) efforts to achieve its vision “To be a leading regulatory authority which works on developing and supervising the activities of capital markets in the State of Kuwait, and creating an attractive investment environment that obtains investors' trust,” the CMA has worked continuously on evaluating and developing its work for the purpose of raising its efficiency and effectiveness. Based on the CMA’s current strategy (2018/2019-2022/2023), in particular the strategy’s twelfth objective which stipulates “Upgrading the institutional building and developing the human resources,” the CMA has launched several strategic initiatives within this framework, one of which was the CMA’s Digital Transformation program which is in line with the country’s vision, the objectives of the development plan and the government’s work program. It also meets the requirements of the digital age of the multiple technologies, its accelerated pace of development, and its impact on the performance of the institutions and the work environment.

The program started in December 2019. The CMA’s Digital Transformation program was launched at that time through forming a higher committee named the Steering Committee of CMA’s Digital Transformation program, and its tasks and competencies were specified. The first recommendation of the committee was forming a special team from CMA’s cadres specializing in preparing CMA’s digital transformation strategy in which the strategy will be the main reference of releasing the program’s initiatives and measuring the achievement of its goals.
Furthermore, the team has prepared a detailed study for the requirements of the digital transformation strategy including the recommendations. The study included an evaluation of the CMA in terms of the digital readiness in addition to conducting benchmarks with several similar institutions within a group of selected countries for the purpose of viewing the applicable practices and the lessons learned from those experiences. It also included an analysis of the strengths and weaknesses, evaluation of the internal environment in terms of human and technological resources, identification of the gaps between the ongoing condition and the ambitions, and the final recommendations of the corrective steps that are necessary to achieve CMA’s digital transformation. According to which, the team started preparing the digital transformation strategy by following the Balanced Scorecard methodology of the strategic planning.
The CMA’s digital transformation strategy was launched in October 2021 based on 4 strategic aspects:
1. Effective data management
2. Integrated stakeholder experience
3. Operational excellence
4. Direct resources
Such aspects included 12 institutional objectives and 12 strategic measurement indicators to be achieved within 14 major initiatives. Such targets and initiatives range from institutional level to organizational level by 28 sub-targets, 34 measurement indicators, and not more than 40 sub-initiatives. The durations and the hierarchy of achieving the initiatives were estimated within a road map that extends until 2025. In line with its completion, the CMA’s business model will turn into a model that completely depends on digital technologies, beginning with automation techniques, artificial intelligence, large data, and cloud computing. By managing the digital transformation through a special strategy, the CMA looks forward to taking advantage of those platforms and explore new ways to acquire revenues in order to invest in these technologies and support its main role stipulated in the Law of its establishment, ensure its contribution in achieving the country’s vision 2035, and improve the international indicators of the country in this area.

 

The Capital Market Authority (CMA) announced the start of receiving applications for applicants to obtain FinTech ExPermit for the fifth batch. This comes as a continuation of the series of FinTech Lab successes in its previous four batches and in continuation of the CMA's keenness to regulate and develop the Saudi financial market and make it an attractive environment for local and regional investors by supporting the financial technology industry and developing innovative products in the capital market.
The CMA is looking forward to receive applications for obtaining a FinTech ExPermit for the fifth batch from all those interested in financial technology and entrepreneurs until the date of December 15, 2021, provided that their products meet the requirements, most notably must involve a securities activity, i.e. within the scope of the activities that the CMA regulates and must be at a sufficiently advanced stage of development to mount a live test, in addition to that, promotes significant growth, efficiency at the Kingdom capital. The CMA also clarifies that it receives applications from applicants during the year, and those applications received are evaluated and studied in batches.
The FinTech Lab is a legislative experimental environment that allows providers of financial technology products and services to test their innovative business models within specific criteria, time and regulatory requirements under the supervision of CMA. The lab receives applicants from inside and outside the Kingdom to experiment with financial products and services related to securities activity with innovative business models that are ready for testing in an experimental environment.
In this regard, the CMA has supported the creation of a legislative and regulatory environment for financial technology products in the financial market, and worked on continuous development to attract innovative business models and emerging technologies that open new horizons to facilitate financing and stimulate investment to build economic entities that enhance the depth and persity of the financial sector and are in line with the objectives of the Financial Sector Development Program, one of the main programs of the Kingdom's Vision 2030.
It is worth noting that the CMA launched the Fintech Lab in December 2018, which is one of the significant steps that aims to support and develop innovation in the Fintech field in the Saudi financial market. In addition, the Fintech Lab enables the Fintech developers to experiment their innovative capital market products and services, within specific controls, parameters and timeframes under the CMA's supervision. Subsequently, CMA opened the first batch of applications for the FinTech ExPermit in February 2018. Since then, the CMA continued its efforts to receive applications in various batches. As a result, CMA Board of Commissioners granted 17 FinTech ExPermits in different business models including Equity Crowdfunding, Robo-advisory, Offering and Investment in Debt Instruments, platform that uses Distributed Ledger Technology (DLT) to arrange and offer of securities and custody services, and Social Trading Platform. During the second half of 2021, the CMA has adopted amendments to the instructions for the financial technology experiment permit. The most prominent of these amendments included the addition of definitions to clarify the nature of the FinTech Lab, as well as the addition of instructions for pursuit business in FinTech Lab.

The Dubai Financial Services Authority (DFSA), the independent financial regulator of the Dubai International Financial Centre (DIFC), continues to enhance its regulatory framework by focusing on the future of finance. As finance across the world transforms through the use of technology, the role of regulation has never been more important.
Innovation is a key pillar of the UAE’s economic growth and it recently ranked 1st regionally in the 2020 Global Innovation Index, cementing its overall status as one of the world’s most innovative countries and further attracting businesses with innovation at the centre of their operations to choose the UAE. Similarly, the future of finance is at the heart of the development of the DIFC, the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region.
The DIFC is now the home of more than 3,200 companies and nearly 28,000 staff. Within this wider population, the DFSA regulates 521 financial services firms and registers 17 auditors and 108 designated non-financial businesses. The total assets of the financial services firms are approaching USD 200 billion. The pipeline of firms wishing to be regulated by the DFSA continues to grow.

The Dubai Financial Services Authority (DFSA) has today launched its regulatory framework for Investment Tokens. The framework reflects the proposals outlined in Consultation Paper 138 issued in March 2021, and forms the first phase of the DFSA’s Digital Assets regime.
The regulatory framework defines an Investment Token as either a Security Token or a Derivative Token. Essentially, these are:
· a Security or Derivative in the form of a cryptographically secured digital representation of rights and obligations that is issued, transferred and stored using Distributed Ledger Technology (DLT) or other similar technology; or
· a cryptographically secured digital representation of rights and obligations that is issued, transferred and stored using DLT or other similar technology and: (i) confers rights and obligations that are substantially similar in nature to those conferred by a Security or Derivative; or (ii) has a substantially similar purpose or effect to a Security or Derivative.
The Investment Tokens regulatory framework applies to persons interested to market, issue, trade or hold Investment Tokens in or from the Dubai International Financial Centre (DIFC) and Authorised Firms wishing to undertake Financial Services relating to Investment Tokens, such as dealing in, advising on, or arranging transactions relating to, Investment Tokens, or managing discretionary portfolios or collective investment funds investing in Investment Tokens.
The DFSA is drawing up proposals for tokens not covered by the Investment Tokens regulatory framework. These are expected to cover exchange tokens (also known as cryptocurrencies), utility tokens and certain asset-backed tokens (stablecoins). The DFSA intends to issue a second consultation paper later in Q4.