3 RegTech pilot initiatives have been launched from The Financial Services Regulatory Agency (FSRA) of Abu Dhabi Global Market (ADGM, with the target of serving to its regulated Financial services companies bring the region better compliance and risk management outcomes, whereas sinking the otherwise regulative prices and burden.
AI-enabled RegBot for Licence Application: –
ADGM for providing the core as well as all kinds of business potency to stakeholders’ operative in, the FSRA is automating its licence application method, enabled by AI, for Venture capital (VC) fund managers.
Potential candidates are going to be supported to move with a “RegBot”, that utilises Natural Language process (NLP) and machine learning to spot info and risk gaps within the application and raise instructive queries. As an illustration, if the individual didn’t offer adequate info on its risk management systems and processes in relevancy a regulative demand, the RegBot can prompt the relevant response from the individual and within the method, enhance the applicant’s understanding of and compliance with the FSRA’s rules and rules.
The FSRA would really like to ask prospective VC fund managers exploring business opportunities in ADGM to undertake out the RegBot, and supply feedback and inputs on the way to improve its user expertise and practicality.
From the data pool extracted from documents uploaded by the individual, the RegBot can classify the applicant’s readiness, and complete a draft form for the individual furthermore as a draft assessment report for the FSRA’s review. During this method, the RegBot is predicted to extend business potency and scale back overall turnaround for the applying method.
Nurturing a energetic VC Ecology: –
The FSRA had chosen the VC fund management community for the pilot in lightweight of the increasing pipeline of licence applications from VC managers. In could 2017, the FSRA introduced a first-in-the-region tailored regulative framework for VC managers that simplifies the applicable regulatory needs whereas maintaining the required safeguards to confirm that they operate in an exceedingly safe and sound manner.
Notably, funding and incentive schemes were launched in 2019 among ADGM to support start-ups and scale-ups at completely different stages of funding cycle. These embrace the Ghadan Ventures Fund, Mubadala MENA school Fund, ADGM Catalyst Fund, and Hub71 incentive programme.
Since then, the VC framework has gathered healthy traction among the VC community. within the last year, the FSRA has approved 9 VC fund managers to conduct regulated activities in ADGM. This development is united with Abu Dhabi’s wider efforts in fostering a spirited scheme for school start-ups and small-and-medium enterprises.
API-enabled resolution for Safe Conduct of Clients Finances: –
The RegTech resolution allows the reconciliation of a FSRA commissioned firm’s consumer cash balances command at the keeper bank against the licensed firm’s internal client money records in compliance with the FSRA’s regulative needs in the least times. Any discrepancies with relevance the commissioned firm’s reconciliation of consumer cash balances are going to be like a shot alerted to the firm and to the FSRA for prompt remedial actions.
To reduce the regulative reportage burden on non-bank commissioned companies (e.g. quality managers and broker dealers) whereas enhancing their risk management capabilities, the FSRA is utilising Application Programme Interfaces (APIs) to watch consumer cash command by such commissioned companies with keeper banks, on a true time basis.
Inspiring towards Digital rules: –
In an ever surging digital economy, wherever technology innovation is continually reworking the financial services landscape, the flexibility to introduce or update our rules to support that transformation is vital. to confirm that FinTech solutions, like the 2 initiatives mentioned higher than, are appropriate purpose within the event of any underlying changes in rules, the FSRA has launched into a pilot program to digitalise its rules, investment linguistics and human language technology.
The FSRA successively, would be in an exceedingly position to confirm that its rules will be updated with efficiency and effectively to support technological advances.
In an exceedingly digital state, the FSRA’s rules will be expressed as a group of arthropod genus and regulative taxonomy for companies and FinTechs to move with dynamically. This pilot could be an opening move towards achieving the FSRA’s idea of making “Regulations in a SandBox”, wherever companies will use the FSRA’s digital rules to check and deploy innovations that are compliant purposely.
These RegTech initiatives are prime samples of our model of shut collaboration with the business to develop sensible solutions for industry participants to boost regulative compliance and introduce the proper compliance culture among their organisations.
Mr. Richard Teng, Chief Executive officer of the Financial Services regulatory agency of ADGM, “As a part of our in progress efforts to make a best at school scheme of digital Financial and business services, the Financial Services regulatory agency continues to commit vital resources to promoting business potency and innovation in an exceedingly safe and well-regulated surroundings.”