Feedback from the consultation paper released earlier this year supported the proposed legislative framework.
Abu Dhabi, UAE: Abu Dhabi Global Market (ADGM), the leading international financial centre (IFC) located in Abu Dhabi, announces ADGM Registration Authority’s (RA) introduction of an enhanced legislative insolvency practitioner framework that reinforces its alignment with international best practices. The enhancements have been introduced after a series of consultation rounds conducted earlier this year, where the proposed new framework received supportive feedback from industry experts.
The upgraded framework will now allow an increased number of insolvency practitioners to be active within the IFC, and simultaneously improve the role of ADGM Registration Authority in monitoring and regulating such practitioners. It also aims to provide greater protection for insolvent parties and creditors.
Under the previous framework, practitioners were obligated to obtain a license which includes having a registered office address within ADGM. The new rules replace this requirement and allow eligible individuals to follow an easy registration mandate in the insolvency practitioners’ Register maintained by the Registrar. Further, there is no annual renewal requirement, but a registered insolvency practitioner must provide the Registrar with an annual confirmation statement, confirming details of any appointments under the Insolvency Regulations 2022 and compliance with the Insolvency Practitioner Rules. This would significantly reduce the administrative burden on insolvency practitioners who want to be registered within ADGM and would encourage an increase in the number of registered practitioners.
Furthermore, the new Insolvency Practitioner Rules contain several registration requirements, including:
- being in continued employment with, or a member, director, or partner, of a firm or body corporate registered within or outside the ADGM;
- holding a membership with a recognised professional body (or satisfying certain ‘fit and proper’ criteria);
- providing evidence of insolvency experience;
One of the key alignments of the enhanced framework with international best practices is the mandatory prerequisite for registered insolvency practitioners to obtain a security bond before any appointment under the IFC’s Insolvency Regulations, with an exemption for practitioners appointed as a liquidator under Section 178 of the Insolvency Regulations.
Dhaher bin Dhaher Al Muhairi, CEO of ADGM Registration Authority said, “As a catalyst driving growth within Abu Dhabi’s financial hub, ADGM places great importance and efforts on maintaining a robust regulatory framework applicable to financial institutions and other individual practitioners. These new enhancements to the legislative insolvency practitioners’ framework at ADGM reflect our continuous commitment towards providing an agile ecosystem that fosters and maintains financial stability and momentum.”
Further highlighting ADGM RA’s dedication he added, “Strengthening the regulatory pillars of ADGM underlines our approach to supporting the global efforts that aim to spread the implementation of best practices and high standards across the financial industry. We continue to focus on bolstering ADGM’s position as a vibrant and sustainable business community with such enhancements and initiatives.”