Weekly Spotlight: Amendments to the Abu Dhabi Global Market’s Crypto Asset Activities Guidance

Abu Dhabi Global Market’s Financial Services Regulatory Authority has amended its Crypto Asset Activities Guidance. The Guidance was first issued in mid-2018 and has since been amended twice. It was the first guidance of its kind when it was published then. The amended Guidance includes key updates on Stablecoins and Fiat Tokens, Custody, Technology Governance and Anti-Money Laundering and Sanctions Rules and Guidance.

Stablecoins which are fully backed by fiat currencies (Fiat Tokens) will be treated as a form of digital currency. When they are used as a payment instrument for Money Transmission which is defined under the Global Market’s Financial Services and Markets Regulations 2015, the activity will be licensed and regulated as Providing Money Services. The amended guidance also sets out the Authority’s approach to regulating issuers, custodians and exchanges using Fiat Tokens. The amended guidance provides further clarity on the types of crypto asset custody activities which can be undertaken and sets out the Authority’s expectations in terms of custody governance and operations.

In addition, there are amendments to the technology governance provisions in the guidance. For example, there are changes in the underlying protocol of a crypto asset which results in a fork or coding change, and the associated governance and control expectations for crypto asset exchanges and license holders.

Finally, the guidance has been amended to reflect the latest changes in anti-money laundering and sanctions changes and there is additional clarity on the use of new regulatory and surveillance technologies in this area.

Weekly Spotlight: Changes to the DIFC’s End of Gratuity Scheme Announced

The Dubai International Financial Centre have announced changes to the Centre’s end of gratuity scheme will come into effect on 1 January 2020. It follows the launching of an informal consultation in March 2019 where the Governor of the DIFC sent a letter to several hundred senior executives on replacing the end of service gratuity system with a new Employee Workplace Savings Trust savings scheme.

Under the changes, employees will contribute funds on an ongoing basis rather than being paid by their employer when they leave. However, the rate will be the same as the current gratuity and employees will be able to make extra contributions if they want to. Employees will also be able to determine if they want to invest in low, medium or high-risk options. When they leave they will receive their contributions and the end of service gratuity acquired to the date of the change. The replacement will only affect new benefits and gratuities. A new law laying out the provisions and requirements in detail will be issued and the scheme will be regulated by the Dubai Financial Services Authority. The master trust housing the scheme will be based in the DIFC.

However, it is not clear if the amended framework will only apply in the DIFC or will apply across the UAE.

Weekly Spotlight: Mandatory Child Vaccination in Dubai

The Chairman of the Standing Child Protection Committee of Dubai’s Health Authority has announced parents must vaccinate their children or risk being charged with negligence. It comes as there is a measles outbreak in the country. The Chairman added children requiring breastfeeding must also be breastfed. In addition, a parent or parents who fail to get a child who has a serious disease adequately treated could be charged with negligence.

Elsewhere in Dubai, the Health Authority’s Dubai Health Insurance Corporation have announced they have issued Directives meaning new-born babies will be able to get health insurance as soon as they are born rather than having to wait.

Directive No. 2/2019 applies to all parties involved in health insurance plans in the Emirate. New-borns will be covered under their mother’s insurance policy for 30 days or up to the annual limit of the mother’s insurance policy. Insurance companies must then issue an individual insurance policy for the child.

Previously insurance companies could implement a waiting period for providing insurance to a new-born which meant if anything happened to them they were uninsured. It comes into force with immediate effect.

Weekly Spotlight: ADGM Courts Issue Litigation Funding Rules

Abu Dhabi Global Market’s Courts have issued the Litigation Funding Rules. They have come into effect immediately. They are the first of their kind in the region and are designed to provide parties and funders with greater certainty on the enforceability of funding arrangements in proceedings for resolving disputes.

They have been issued following growing interest in third party funding of parties to manage their litigation and arbitration proceedings. Amongst other things, the Rules state a Funder’s principal business must be in funding proceedings to which the Funder is not a party and the Funder must have qualifying assets of at least $5 million. In addition, the Litigation Funding Agreement must contain some minimum terms including to ensure there are no conflicts of interest, the Funder’s involvement in the settlement of proceedings and the Funder’s obligations about dealings with lawyers.

Updated anti-money laundering rules are also now in force in the Global Market as well. It comes ahead of an assessment of the UAE by the Financial Action Task Force this summer. The updated rules also cover anti-terrorist financing.

The Litigation Funding Rules are now available on Lexis Middle East : https://www.lexismiddleeast.com/regulatory/AbuDhabiGlobalMarket/ADGM_ADGM_Litigation_Funding_Rules_2019/

Weekly Spotlight: The UAE Announces Changes to Guarantees System for Domestic Workers

UAE officials have announced changes to the country’s guarantees system for domestic workers. Under the changes, domestic workers will now be able to be replaced or the hiring fees fully or partially refunded within the two-year recruitment contract.

The guarantee for those domestic workers who are recruited through the Tadbeer system has been extended to two years, in line with the Implementing Regulations to the Domestic Workers’ Law. The Law had previously granted a six-month guarantee period during which time an employer could get their recruitment fees refunded or replace a worker.

Under the new rules full recruitment fees will be refunded or an employee is replaced as an employer may want during the first six month of the contract or the probationary period in the event of termination of the contract by an employee illegally, quitting without an acceptable reason, the employee being unfit or unable to carry out their duties as required and agreed on.

After the probationary period and up to the end of the recruitment contract, part of the recruitment fees will be refunded if an employee terminates the contract illegally or quits without an acceptable reason. The amount refunded will be calculated on the basis of the remaining period of the contract. Recruitment firms will have to refund the fees to an employer within a month of the date an employer returns an employee or reports their absence from work. Where an employer specifically named a domestic worker to be recruited and the recruiting firm hired them, no recruitment fees will be refunded.

Weekly Spotlight: New Consultation Launched by the ADGM on Amendments to the Market’s Employment Regulations

The Registration Authority of Abu Dhabi’s Global Market has launched a public consultation on proposed amendments to the Market’s Employment Regulations. The consultation ends on 28 April 2019. The consultation includes a proposal for a new rule to govern work carried out by individuals not sponsored by Global Market entities in the Global Market.

The amendments aim to enhance the Market’s employment framework and make it appealing for both employers and employees. The proposed amendments have been developed in light of international practices and standards. The key proposals include introducing a temporary work permit regime which will allow individuals seconded from other jurisdictions or outsourced from non-Global Market entities to officially work in the Market and facilitate the engagement of interns, with or without pay by Global Market entities

It will also allow temporary freelancers to operate in the Global Market subject to a temporary work permit being obtained for them and add provisions for ‘overtime’ and ‘overtime compensation’ for employees, except for those who are employed in managerial or supervisory positions.In addition, it will introduce amendments to the Ramadan working hours provision and sick leave pay provisions and introduce a one-way repatriation flight ticket entitlement to employees

Finally, it will add protective provisions for the employment of young people between 15 and 18, add a provision to confirm the application of the Federal Law Concerning the National and Reserve Service in the Global Market and introduce amendments to the Protection of Wages and Hiring Employees sections of the Abu Dhabi Global Market Employment Regulations (Compensation and Awards Limits) Rules 2016.

Weekly Spotlight: Greater Insights into the Implications of the UAE Standalone Healthcare Data Protection Law

An insight piece from Clyde & Co provides greater insights into the implications of the standalone healthcare data protection law in the UAE. Federal Law No. 2/2019 regulates the use of technology in healthcare and is the first piece of federal legislation which directly addresses data protection principles. The new rules will be relevant to healthcare providers, insurers and companies delivering healthtech solutions in the UAE market. Affected organisations will include healthcare providers but also medical insurance businesses, healthcare IT system suppliers and providers of outsourced services to the health sector, such as cloud service providers.

Amongst other things, the Law establishes a central IT system and mandatory interoperability standards for the health sector throughout the UAE and creates a national IT strategy for healthcare. In addition it creates ‘data protection’ obligations and restrictions, in particular in relation to confidentiality, integrity, sharing, storage and retention of data. However there are derogations from data sharing restrictions to promote scientific and clinical research and to allow the necessary exchange of information with the insurance industry. Finally disciplinary committees in each local Emirate health authority to enforce the law and apply sanctions for breach will be established. Federal Law No. 2/2019 was published in UAE Official Gazette, 647 of 2019 on 14 February 2019.