Legislation

11th March 2025

Time is Running Out: New ADGM Whistleblower Protection Regulations

In a significant step towards enhancing transparency, accountability, and integrity within the financial sector, the Abu Dhabi Global Market (ADGM) has introduced the Whistleblower Protection Regulations 2024, which are ADGM's whistleblowing regulations. These new regulations are set to come into effect soon, with a compliance deadline of May 31, 2025. They are particularly critical for businesses operating within the ADGM’s financial freezone, as they impose new obligations on entities registered or licensed under ADGM’s jurisdiction. Given the approaching deadline, it is imperative for ADGM entities to understand the requirements and take immediate action to align their policies and procedures accordingly. ADGM authorities have the power to impose sanctions for non-compliance, including fines or other penalties.

The ADGM whistleblowing framework aims to create a supportive environment that encourages individuals to report suspected misconduct without fear of retaliation. The scope of the regulations covers employees, officers, and other individuals associated with ADGM entities, and includes a range of misconduct such as financial crime, regulatory breaches, and unethical behavior, reported through designated internal and external channels. By introducing clear whistleblower protections and effective arrangements for handling protected disclosures, the regulations seek to uphold market integrity and combat financial crime, including money laundering and other financial offences. In this article, we explore the key aspects of the whistleblower protection regulations 2024 and outline how ADGM entities can ensure full compliance.

What Are the ADGM Whistleblower Protection Regulations?

The Whistleblower Protection Regulations 2024 represent a comprehensive legal framework designed to foster a culture of accountability within the Abu Dhabi Global Market. These regulations require ADGM entities to implement written policies and procedures that facilitate the reporting and handling of whistleblower disclosures, and specifically to facilitate protected disclosures by establishing internal channels and safeguards to ensure confidentiality and proper handling of reports. Protected disclosures must be assessed and escalated by the ADGM entities as part of their obligations under the Regulations. The regulations introduce several important concepts, such as protected disclosures, non-retaliation protections, and confidentiality safeguards, all aimed at supporting good faith disclosures of suspected misconduct.

Under the new regulations, entities registered within ADGM, including those holding commercial licenses or designated non-financial businesses, must establish internal reporting channels that are secure, confidential, and accessible. These channels enable employees and other stakeholders to report concerns related to potential legal contraventions, financial crime, or breaches of ADGM laws. Moreover, the regulations empower ADGM authorities, including the Registrar, to impose financial penalties and other sanctions on entities that fail to comply, highlighting the serious consequences of non-compliance.

Key Features of the ADGM Whistleblower Protection Regulations

The whistleblower protection regulations introduce several key features designed to encourage and safeguard whistleblowers within the Abu Dhabi Global Market:

1. Definition of Whistleblowers
   The regulations clearly define whistleblowers as individuals or legal entities who report actual or suspected misconduct in good faith. This includes disclosures related to fraud, money laundering, other financial crime, or any other wrongdoing that threatens market integrity.

2. Protected Disclosures
   The concept of protected disclosures is central to the regulations. Such disclosures refer to reports made about knowledge or reasonable suspicion of illegal activities or breaches of ADGM laws. These can be directed internally through designated non-financial businesses or external reporting channels such as law enforcement agencies or ADGM authorities.

3. Non-Retaliation Protections
   To encourage reporting, whistleblower protections include non-retaliation safeguards. Whistleblowers, specifically employees, are shielded from dismissal, harassment, or any detrimental treatment. Retaliation includes dismissal, disadvantages, or any other act that could harm the employee making the disclosure. Employers are required to offer equal terms of employment and protection to employees who make protected disclosures, and retaliation such as dismissal or unequal terms is prohibited. This ensures that employees can come forward without fear of adverse consequences.

4. Confidentiality Safeguards
   Maintaining the confidentiality of whistleblowers is a critical element of the regulations. Entities must protect the identity of individuals making reports unless disclosure is legally required or necessary for investigations, thereby protecting the identity and rights of whistleblowers. This confidentiality encourages more good faith disclosures.

5. Internal Reporting Channels
   ADGM entities are required to establish effective internal reporting channels that facilitate the safe and confidential submission of whistleblower reports. Entities must designate specific individuals or departments responsible for receiving and handling protected disclosures. These channels must be easily accessible to employees and other stakeholders to support effective whistleblowing.

6. Obligation to Investigate and Retain Records
   Upon receiving a protected disclosure, organisations must promptly investigate the matter and maintain comprehensive records related to the disclosure for a minimum of six years. Large establishments are subject to stricter documentation and oversight requirements. This record-keeping supports transparency and accountability.

The concept of protected disclosures is recognized in other jurisdictions, and public censure is one of the possible sanctions for non-compliance with these regulations.

How Can ADGM Entities Comply?

With the compliance deadline rapidly approaching, ADGM entities need to take concrete steps to align with the new whistleblower protection regulations. Entities with an annual turnover exceeding USD 13.5 million are classified as large establishments and are subject to stricter documentation and compliance requirements. Large establishments must formalize their arrangements by the start of the following financial year. Compliance not only helps avoid financial penalties and sanctions but also strengthens organisational governance and market integrity.

Implement Internal Procedures:Entities must develop and document written policies and procedures specifically designed to handle protected disclosures. These policies should clearly outline the process for reporting suspected misconduct, criteria for protected disclosures, and the roles and responsibilities of designated personnel.

**Ensure Proper Reporting Channels:**Organisations are required to establish secure, confidential, and accessible internal reporting channels. These channels must enable employees and other stakeholders to report suspected misconduct or concerns safely and anonymously if desired.

**Train Key Personnel:**Designated individuals or departments responsible for handling whistleblower reports should receive appropriate training. This ensures they are equipped to manage disclosures impartially, maintain confidentiality, and conduct thorough investigations.

**Monitor for Retaliation:**Entities must implement mechanisms to detect and prevent retaliation against whistleblowers. Employees should feel confident that reporting suspected misconduct will not result in adverse treatment, including employment termination or other civil or contractual liability.

**Record Keeping:**All records related to whistleblower reports and investigations must be securely retained for at least six years. This practice supports regulatory oversight and demonstrates the organisation’s commitment to accountability.

Why Compliance Matters

The importance of complying with the ADGM whistleblowing regulations cannot be overstated. Failure to meet the requirements may lead to significant financial penalties, suspension, or even withdrawal of commercial licenses by ADGM authorities. Beyond legal consequences, non-compliance can damage an organisation’s reputation, erode stakeholder trust, and undermine market integrity.

Conversely, adopting the new regulations helps ADGM entities foster a culture of openness and ethical conduct. By supporting effective whistleblowing and addressing concerns promptly, organisations contribute to preventing financial crime, including money laundering and other potential legal contraventions. This proactive approach not only safeguards the business but also reinforces Abu Dhabi’s position as a leading global financial centre.

Conclusion: The Clock Is Ticking

ADGM entities have until May 31, 2025, to implement the Whistleblower Protection Regulations 2024. As the deadline draws near, businesses must prioritise establishing robust whistleblower protection policies, internal and external reporting channels, and comprehensive training programs. By doing so, they will ensure compliance, protect whistleblowers, and demonstrate their commitment to transparency and accountability within the Abu Dhabi Global Market.

For further details, organisations are encouraged to consult the official ADGM publications, including the Whistleblower Protection Regulations 2024, the Consultation Paper on the Whistleblowing Framework, and Supplementary Guidance on Whistleblowing. For broader context, they may also find it helpful to understand the EU Whistleblowing Directive, which offers insight into best practices and regulatory standards internationally. Staying informed and proactive is essential to navigating these new regulatory requirements successfully.

By embracing these new whistleblower protections, ADGM entities not only comply with regulatory mandates but also contribute to a safer, more transparent financial marketplace in Abu Dhabi and beyond.