Abu Dhabi Global Market (ADGM) has enacted Electronic Transactions Regulations 2021. The regulations confirm the legal enforceability of electronic negotiable instruments such as digital promissory notes, bills of exchange, etc., that are equivalent to physical paper documents.
When it comes to the legal concepts related to contracts, signatures and documentation, these point to physical papers. ADGM believes that the legal concepts should be reconsidered looking at the remarkable growth of the digital economy and the impact of COVID-19. This is where the need for the regulations arises.
Technology Experts for Regulatory Action (TERA), a task force set up by the International Trade and Forfaiting Association (ITFA), provided valuable inputs into the new ADGM Electronic Transactions Framework. Enigio’s Lars Hansen is one of the founding members of TERA that aims to track and facilitate regulatory advocacy around the world.
André Casterman, the Chairman of ITFA Fintech Committee, said,
Regulators hold the key to boost adoption of digital trade solutions. This is very applicable in the area of electronic signatures and electronic transferrable records which is the focus on the Digital Negotiable Instruments (DNI) Initiative and the TERA task force. Recent technologies such as DLT are increasingly being integrated into law across financial markets and jurisdictions which demonstrate strong alignment between private and public sector.
The Regulations are established following the UNCITRAL Model Law on Electronic Transferable Records (MLETR). It is noteworthy that Enigio’s trace:original technology is perfectly aligned with the guiding requirements laid out in the Model Law.
In the ITFA update Luca Castellani, UNCITRAL Secretariat added,
Currently, 2 out of the 3 jurisdictions that have enacted the MLETR are from the Gulf: an excellent springboard for a deep digital trade dive in the MENA region.
Commenting on the collaboration with ADGM, ITFA Chair Sean Edwards said in the same ITFA update,
We will now explore further with them the commercialisation of specific instruments such as electronic bills of exchange and promissory notes.