ADGM Consultation Paper No. 7 of 2025: Administrative Regulations

Consultation Paper No.7 of 2025, issued by the Abu Dhabi Global Market (ADGM) Registration Authority (RA), proposes significant reforms through the enactment of new Administrative Regulations. These changes aim to unify and enhance the enforcement procedures, investigation powers, sanctions, and procedural fairness mechanisms applicable across ADGM’s commercial legislation.

Current Law:

Currently, enforcement provisions are fragmented across various pieces of laws, rules, and regulations, leading to inconsistency, inefficiency, and insufficient deterrents against legal breaches. This paper seeks public feedback on the proposed reforms, which are designed to create a more centralized, and simplified enforcement framework.

The process for issuing financial penalties for lower-level contraventions and other straightforward cases, such as late filings, under the relevant commercial legislation does not differ from the enforcement process applicable to higher-level contraventions. Moreover, there is currently no statutory emergency process that the RA can deploy in cases of urgency. The RA must follow the normal enforcement process (warning notice, decision notice, and final notice), which is time-consuming and ineffective at achieving the objective in such exceptionally urgent cases.

Proposed Amendmends:

The proposed Administrative Regulations introduce a new, overarching enforcement framework that will apply uniformly across all commercial laws in the ADGM. This regulation will amend existing legislation by replacing individual enforcement clauses, thereby centralizing enforcement procedures into a single, consistent set of rules. This shift is intended to promote clarity, simplify compliance, and ensure uniform application of regulatory powers.

A key feature of the new regime is the implementation of a two-tiered procedural fairness system. Tier 1 is designed for minor contraventions, such as late filings, and offers a streamlined enforcement process. This includes fixed fines corresponding to Fine Levels 1 and 2, the option for written representations within a specified timeframe, and a 30% discount if the fine is paid within 14 days. Tier 2, on the other hand, applies to more serious contraventions. It involves a more rigorous process including the issuance of warning notices, formal decisions, and the opportunity for judicial review. Penalties under Tier 2 can include substantial financial fines (ranging up to USD 54,000,000) as well as administrative sanctions like director disqualification and license cancellation.

To support these changes, a revised fine scale will be introduced. This updated scale consists of nine levels, allowing penalties to be more accurately matched to the severity and nature of the contravention. The goal is to enhance the deterrent effect of enforcement actions and to ensure that repeat or egregious violations are met with appropriately scaled responses.

The new regulations will also formalize the ability of contravening parties to waive their right to procedural fairness. By consenting in writing, a party can accept the enforcement outcome without undergoing the full procedural steps, thereby expediting resolution and reducing administrative burden for both parties.

In addition, the RA CEO will be granted emergency powers to act swiftly in urgent situations. Under the new statutory authority, the CEO may issue an "Exceptional Notice" to immediately suspend, restrict, or cancel a license, or impose a prohibition order, without the need to follow the standard Tier 2 procedure. These powers are reserved exclusively for the RA CEO and cannot be delegated, ensuring accountability while enabling rapid intervention in the public interest.

Finally, the Administrative Regulations will introduce statutory time limits within which enforcement actions must be initiated. This inclusion is meant to enhance procedural fairness by preventing undue delays, while also offering greater legal certainty to businesses and individuals operating under ADGM's jurisdiction.

Conclusion

This consultation paper reflects a comprehensive reform of ADGM’s enforcement landscape. By consolidating enforcement provisions, introducing tiered responses based on severity, and equipping the RA with clearer and more effective tools, including emergency and settlement mechanisms, the proposed Administrative Regulations aim to make regulatory compliance more predictable, proportionate, and efficient.