In 2024, the Abu Dhabi Global Market (“ADGM”) further enhanced transparency, accountability, and market integrity within the financial freezone by introducing the Whistleblower Protection Regulations 2024 (the “Regulations”). In brief, those Regulations require certain entities registered or licensed to operate or conduct any activity within the ADGM to implement arrangements for handling whistleblowing, including having appropriate written policies and procedures, and to maintain related records for at least six years. The Regulations also afforded the Registrar of the ADGM the power to issue censures, impose financial penalties, or suspend or withdraw licenses for contraventions.

Importantly, ADGM entities have until May 31, 2025—approximately just four more months—to implement those arrangements. The clock is ticking.

The New Whistleblower Framework in Overview

On March 7, 2024, the ADGM issued a Consultation Paper (the “Paper”)[1] proposing the implementation of a comprehensive whistleblower framework and soliciting comment.[2] Then on July 5, 2024, the ADGM issued the Regulations,[3] significantly developing the scope of whistleblower protections within the ADGM.[4] Finally, on July 11, 2024, the ADGM issued Guidance on the Regulations (“Guidance”),[5] designed to assist with implementation.

Importantly, the Regulations require Global Market Establishments (“GMEs”)[6] to implement arrangements for handling Protected Disclosures[7] and to keep related records for at least six years.[8] These arrangements must be “proportionate to the size and complexity of [the] business and [its] operations” to support effective whistleblowing.[9]

Certain GMEs, including “Large Establishments,” meaning those with annual turnover more than USD 13.5 million or that have more than 35 employees, as well as Designated Non-Financial Businesses or Professions (“DNFBPs”), are subject to the more onerous requirement of needing to document their arrangements in written policies and procedures.

Key Features of the New Regulations

The key features of the Regulations include:

1. Definition of Whistleblowers: the Regulations clearly define who qualifies as a whistleblower, which is broadly defined as any person, natural or legal, who in good faith reports actual or suspected misconduct.[10] 
2. Protected Disclosures: the Regulations introduce the concept of “protected disclosures,” a concept widely recognized in other jurisdictions. The Regulations establish that protected disclosures are good faith reports of knowledge or reasonable suspicions that a GME, or an officer, employee or agent of a GME, has or may have contravened, or is likely to contravene, an ADGM law, regulation or rule, or has or may have engaged, or is likely to engage, in money laundering, fraud or any other financial crime.[11] Disclosures can be made to management or to any other person designated to receive such disclosures within the relevant GME, or to various regulatory or law enforcement agencies.[12]
3. Non-Retaliation Protections: the Regulations require protection against retaliation for whistleblowers.[13] They ensure that individuals who report wrongdoing in good faith are shielded from any form of retaliation, which could include dismissal, demotion, harassment, or any other detrimental treatment.[14] This provision aims to encourage more people to come forward without fear of reprisal, promoting a safer and more transparent reporting environment. Retaliation includes, but is not limited to, dismissal, forcing the employee to retire or resign, refusing to offer equal terms of employment (including conditions of work, fringe benefits, or opportunities for training, promotion, and transfer as are made available to other trainees), and any other act which is reasonably likely to cause detriment or disadvantage to the employee.[15] Where an employer or any related party retaliates against an employee, the employee may apply to the court for compensation, which may include an amount in relation to injury to feelings or any loss sustained by the employee.[16]
4. Confidentiality Safeguards: the Regulations place a strong emphasis on maintaining the confidentiality of whistleblowers.[17] GMEs are required to implement procedures to protect the identity of whistleblowers to the greatest extent possible, unless disclosure is required by law or necessary for the investigation.[18]
5. Establishment of Internal Reporting Channels: the Regulations require GMEs to establish and maintain internal reporting channels that are secure, confidential, and accessible.[19] This requirement not only streamlines the process for whistleblowers but also ensures that organizations are proactive and prompt in addressing concerns.[20]
6. Obligation to Investigate and Report: the Regulations require GMEs to log all disclosures, to investigate them thoroughly and impartially, and to retain for at least six years the disclosures and all supporting documents, as well as all internal analyses relevant to their investigation, assessment and determination.[21] This obligation ensures a high standard of accountability and transparency in how whistleblower reports are managed.

Spectre of Sanctions for Non-Compliance

GMEs have until May 31, 2025 to implement the specific arrangements required by the Regulations, including taking advice from external counsel if necessary.[22] The ADGM’s Registrar is expressly empowered to issue private or public censures, impose financial penalties, or suspend or withdraw licenses for any contraventions of the Regulations by a GME.[23]

Additional Considerations

With just four months to go, time is now of the essence for ADGM entities to familiarize themselves with the Regulations and to ensure that either their existing internal processes align with the requirements imposed by the Regulations, or they implement new processes, including written policies and procedures where appropriate, to facilitate protected disclosures, including by authorizing specific individuals or departments to receive disclosures through internal reporting channels; protect whistleblower identities; guarantee the prompt, systematic and independent investigation of disclosures; and safeguard all records relating to disclosures for at least six years. Those who do not run the risk of serious consequences.

[1] Abu Dhabi Global Market, Consultation Paper No.2 of 2024, (March 7, 2024).

[2] Abu Dhabi Global Market, ADGM Publishes Consultation Paper on a Comprehensive Whistleblowing Framework, (March 7, 2024).

[3] Abu Dhabi Global Market, Whistleblower Protection Regulation 2024, (July 5, 2024).

[4] Abu Dhabi Global Market, ADGM Publishes Its Whistleblowing Framework, (July 10, 2024).

[5] Abu Dhabi Global Market, Supplementary Guidance – Regulatory Framework for Whistleblowing (July 11, 2024).

[6] Any company, branch, representative office, institution, entity, or other project registered or licensed to operate or conduct any activity within the ADGM by any of the ADGM Authorities, per Law No.4 of 2013 Concerning Abu Dhabi Global Market (known as the ADGM Founding Law), (February 19, 2013).

[7] Good faith disclosures of knowledge or reasonable suspicions that a GME, or an officer, employee or agent of a GME, has or may have contravened, or is likely to contravene, an ADGM law, regulation or rule, or has or may have engaged, or is likely to engage, in money laundering, fraud or any other financial crime, per Section 4(2), the Regulations, (July 5, 2024).

[8] Section 6(8), the Regulations, (July 5, 2024).

[9] Section 6(1), the Regulations, (July 5, 2024).

[10] Schedule of Definitions, the Regulations, (July 5, 2024).

[11] Section 4(2), the Regulations, (July 5, 2024).

[12] Section 4(3), the Regulations, (July 5, 2024).

[13] Section 5(1), the Regulations, (July 5, 2024).

[14] Section 5(1)(c), the Regulations, (July 5, 2024).

[15] Section 7.3, the Guidance,(July 11, 2024).

[16] Section 5(2), the Regulations, (July 5, 2024).

[17] Section 12, the Guidance,(July 11, 2024).

[18] Ibid.

[19] Section 6(2), the Guidance,(July 11, 2024).

[20] Ibid.

[21] Section 6(2)(7), the Regulations, (July 5, 2024).

[22] Section 3, the Guidance,(July 11, 2024).

[23] Section 7, the Regulations, (July 5, 2024).