Legislation

11th March 2025

Time is Running Out: New ADGM Whistleblower Protection Regulations

In a move aimed at enhancing transparency, accountability, and integrity in the financial sector, the Abu Dhabi Global Market (ADGM) introduced the Whistleblower Protection Regulations 2024. These regulations, which come into effect in just a few months, are pivotal for businesses operating within ADGM’s financial freezone.

Companies must take immediate action to ensure compliance by the deadline: May 31, 2025.

Let’s dive into what these regulations entail and why it’s crucial for ADGM entities to act quickly.

What Are the ADGM Whistleblower Protection Regulations?

The Whistleblower Protection Regulations 2024 were designed to foster a culture of accountability within the ADGM by offering robust protections for whistleblowers. These regulations mandate certain businesses registered or licensed within ADGM to establish proper procedures for handling whistleblower reports, including creating written policies, ensuring confidentiality, and maintaining records for a minimum of six years.

The regulations also grant the ADGM Registrar the authority to issue penalties, suspend licences, or even withdraw them entirely in the case of non-compliance. This highlights the serious consequences for entities that fail to meet the requirements.

Key Features of the ADGM Whistleblower Protection Regulations

The new regulations bring several key features designed to encourage and protect whistleblowers. These include:

1. Definition of Whistleblowers

The regulations offer a clear definition of who qualifies as a whistleblower. This includes any individual—whether natural or legal—who reports actual or suspected misconduct in good faith.

2. Protected Disclosures

The regulations introduce the concept of "protected disclosures," which are reports made by individuals about knowledge or suspicions regarding illegal activities such as fraud, money laundering, or breaches of ADGM laws. These disclosures can be made to company management, designated individuals, or external regulatory bodies.

3. Non-Retaliation Protections

Whistleblowers are protected against any form of retaliation. This includes protection from actions like dismissal, harassment, or any other detrimental treatment. This safeguard encourages individuals to come forward with concerns without fear of reprisal.

4. Confidentiality Safeguards

To ensure whistleblowers’ safety, the regulations require businesses to protect the confidentiality of the individuals making reports. Disclosure of the whistleblower’s identity is only permitted if required by law or for the purposes of an investigation.

5. Internal Reporting Channels

Organisations are now required to establish secure, confidential, and accessible reporting channels. These channels should facilitate easy communication for whistleblowers to make disclosures in a safe and organised manner.

6. Obligation to Investigate and Retain Records

Under the new rules, businesses are obliged to thoroughly investigate all whistleblower reports. They must also retain all records related to these disclosures for at least six years. This promotes accountability and transparency within organisations.

How Can ADGM Entities Comply?

The deadline for compliance is fast approaching, and businesses within the ADGM need to act quickly to ensure they are ready. Here’s what organisations need to do:

•    Implement Internal Procedures: ADGM entities must establish processes for handling protected disclosures. This includes setting up written policies and procedures for organisations that meet certain criteria (e.g., companies with more than 35 employees or an annual turnover exceeding USD 13.5 million).
•    Ensure Proper Reporting Channels: Businesses must set up secure, confidential, and easily accessible internal reporting channels where employees can safely report misconduct or concerns.
•    Train Key Personnel: Designate specific individuals or departments within the company to handle whistleblower reports. Training must be provided to ensure these individuals are well-equipped to handle disclosures effectively and impartially.
•    Monitor for Retaliation: Establish mechanisms to prevent retaliation against whistleblowers. Employees must feel safe when coming forward with information.
•    Record Keeping: Organisations must keep all records related to whistleblower disclosures for at least six years.

Why Compliance Matters

With only a few months left to comply, businesses must move quickly. Failing to implement the necessary whistleblower protection arrangements could lead to severe consequences, including financial penalties, censures, or the suspension or withdrawal of licences.

Not only will non-compliance result in legal repercussions, but it could also harm a company’s reputation, reducing trust among stakeholders and the public. In contrast, compliance fosters a safer and more transparent environment, benefiting both the organisation and its employees.
 

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Conclusion: The Clock Is Ticking

ADGM entities have until May 31, 2025, to implement the Whistleblower Protection Regulations 2024. Businesses that fail to comply with these regulations face serious risks, including financial penalties and potential damage to their reputation. It’s crucial for organisations to familiarise themselves with the requirements of the regulations and take the necessary steps to establish robust whistleblower protection policies.

By acting now, ADGM entities can not only ensure compliance but also demonstrate their commitment to transparency, accountability, and ethical practices.

For more information, you can refer to the official ADGM publications:

•    ADGM Whistleblower Protection Regulations 2024
•    ADGM Consultation Paper on Whistleblowing Framework
•    ADGM Supplementary Guidance on Whistleblowing