ADGM Whistleblowing Framework – A Coordinated Initiative To Promote Transparency, Accountability And Market Integrity In ADGM

In Brief:

1. The Abu Dhabi Global Market ("ADGM") Whistleblowing Framework now protects good faith 'protected disclosures', provides a right to anonymity to the whistleblower and offers protection from reprisals.

2. 'Protected disclosures' can be made to specified external bodies, as well as internally.

3. Failing to comply with the Whistleblowing Framework can result in a range of disciplinary measures, ranging from private or public censure or a financial penalty to a suspension or withdrawal of the ADGM entity's commercial licence.

The Whistleblowing Framework includes:

• the newly enacted ADGM Whistleblower Protection Regulations 2024 ("Regulations");
• amendments to the ADGM Employment Regulations incorporating new non-retaliation provisions and protections from civil or contractual liability in connection with making a 'protected disclosure';
• amendments to the FSRA General Rulebook (GEN) and Market Infrastructure Rulebook (MIR).

In addition to these statutory instruments, ADGM has issued 'Supplementary Guidance – Regulatory Framework for Whistleblowing'.

The Regulations have a broad application to all 'Global Market Establishments' (effectively any entity, institution or project registered or licensed to operate or conduct any activity in ADGM, and referred to as "ADGM entities" in this article), and aim to safeguard whistleblowers that make good faith disclosures in respect of matters concerning ADGM entities.

What disclosures are protected?

In order to be regarded as a 'protected disclosure', the disclosure must:

1. Relate to knowledge or a reasonable suspicion of actual or potential contravention: (i) of ADGM Laws, or (ii) with respect to which an ADGM authority (RA or FSRA) can take action, such as engagement in money laundering, fraud or other financial crime;
2. Be made in good faith; and
3. Be made either:

• internally, to their employer – an ADGM entity; or
• externally, to a specified external body, including ADGM and UAE authorities.

A whistleblower who satisfies each of these elements makes a 'protected disclosure' and is entitled to the protections offered under the Whistleblowing Framework.

The updated Employment Regulations prohibit retaliation - defined very broadly to encompass a range of actions capable of causing detriment or disadvantage to the employee as a result of making a 'protected disclosure' - and enable the whistleblower (employee) to seek redress through the Court.

What disclosures are not protected?

While the Whistleblowing Framework protections apply to disclosures of information regarding contraventions of ADGM laws and with respect to which an ADGM authority can take action, disclosures about contraventions of other laws will not be regarded as a 'protected disclosure', at least in the ADGM. For international organisations, it may well be that other whistleblowing regimes from other countries will be engaged through a disclosure, even if the disclosure is not protected in ADGM.

Practically, whistleblowers making a 'protected disclosure' outside ADGM jurisdiction, other than to the specified UAE authorities, may not avail of the protections afforded by the Whistleblowing Framework.

Summary of key features:

• Provisions for confidentiality for the whistleblower, and protection from reprisals.
• The whistleblower can also provide the disclosure on an anonymous basis, so employers must not ignore disclosures made anonymously.
• ADGM entities are required to establish robust internal reporting mechanisms that facilitate secure and efficient handling of disclosures, proportionate to the size and complexity of their business operations.
• 'Protected disclosures' can be made through internal channels and to specified external regulatory authorities.
• Failing to comply with the Whistleblowing Framework can result in a range of measures, ranging from private or public censure or a financial penalty to a suspension or withdrawal of the ADGM entity's commercial licence.

What do ADGM entities need to do?

The Whistleblowing Framework took effect on publication. While ADGM entities have until 31 May 2025 to ensure that their policies and procedures facilitate the making of 'protected disclosures' in compliance with the Whistleblowing Framework, the corresponding protections for whistleblowers are currently in effect. Therefore, it is imperative that employers act quickly to ensure that their policies and procedures are fit for purpose. There is an ongoing obligation to keep the arrangements, written policies and procedures under review and up to date.

Records related to disclosures should be kept for at least 6 years, although a more extended period may be specified in other ADGM regulations. Accordingly, updates to data protection and retention policies may also be required.

Top of Form

Bottom of Form

Summary

The ADGM Whistleblowing Framework aims to bolster public trust, enhance transparency, accountability, and integrity, and encourage a culture supporting speaking up without fear of retaliation. The Whistleblowing Framework is an important step to ensuring that ADGM maintains a responsible corporate environment and protects the ADGM business community.

Those ADGM entities that are already operating robust whistleblowing arrangements should review these to ensure that they comply with the ADGM Whistleblowing Framework. For those not yet in that position, we recommend that proactive steps be taken now to ensure compliance, as being reactive when the whistle has been blown can be challenging, and is avoidable.

Hadef & Partners can help support your business, irrespective of how developed your whistleblowing organisational arrangements might be, or if you are dealing with a whistleblowing situation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.