ADGM: Consultation issued for new Whistleblowing Framework

On 7 March 2024, the Abu Dhabi Global Market (“ADGM”) issued a Consultation Paper (the “Paper”) proposing the enactment of the Whistleblower Protections Regulations [2024] (the “Proposed Regulations”), aiming to significantly enhance and expand the scope of whistleblower protections within the jurisdiction of the ADGM.

Drawing from the non-binding Guiding Principles on Whistleblowing, issued in December 2022 (the “Guiding Principles”), the Proposed Regulations seek to provide a comprehensive approach to safeguarding individuals who, in good faith, report suspicions of misconduct within the ADGM.

Potential Implications for entities registered in the ADGM:

• Entities will be mandated to implement, develop and periodically review policies and procedures that facilitate protected disclosures, protecting a whistleblowers identity, and ensuring the proper handling of reports.

• Whistleblowers will have immunity from civil, contractual and employment-related retaliations, safeguarding against dismissal, discrimination, or any adverse treatment related to the disclosure.

• Entities will be required to nominate specific individuals or departments authorised to receive protected disclosures through internal reporting channels. These may include, but are not limited to, personnel within compliance, legal, internal audit functions, or external parties such as third-party whistleblowing service providers. Entities must ensure that designated recipients are equipped to handle sensitive information confidentially, and in accordance with the ADGM's governance standards. External reporting channels are also available.

• Entities will be required to maintain records relating to the protected disclosure for at least 6 years following the conclusion of the matter.

• The ADGM Registration Authority will be empowered to impose sanctions on entities that fail to comply with the Regulations, ranging from censures to financial penalties and in severe cases, suspension, or withdrawal of commercial licenses.

Next steps

In light of the Proposed Regulations, ADGM entities are encouraged to review the Paper and provide comprehensive feedback on its provisions. The Paper outlines several key questions designed to solicit detailed responses on various aspects of the Proposed Regulations, including the scope of protected disclosures, the anonymity provisions, the framework for internal and external reporting channels, and the mechanisms for safeguarding the confidentiality of disclosures. These questions serve as a guide for stakeholders to offer insights and suggestions that could refine and enhance the effectiveness of the final regulations. A link to the Paper is available here.

To participate in this consultation process, comments should be submitted in writing to the ADGM by the deadline of 30 April 2024. Comments can be directed to the official email address: consultation@adgm.com. The ADGM has also highlighted that all comments received will be considered for publication unless a specific request for confidentiality is made by the commentator.

For any queries relating to this (including our assistance in submitting comments on the Paper) and other general ADGM or UAE employment related matters, please do not hesitate to contact David McDonald.

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David McDonald
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E david.mcdonald@simmons-simmons.com