[ I N D E P T H | M I D D L E E A S T ]
and easing of foreign ownership restrictions drive increased international participation. Christiane El Habre, Apex Group’ s regional managing director, Middle East, says:“ Regulators are pushing for stronger corporate governance and ESG compliance, which is influencing custodial services and reporting.” The growing emphasis on ESG standards is also reshaping the custody in the region. As investors demand greater accountability, custodians are under pressure to integrate these standards into their services, creating both challenges and opportunities. With these reforms in place, custodians in the region are playing an important role in ensuring efficient post-trade services, asset safekeeping, and risk management for investors looking to capitalise on the region’ s growth.
El Habre adds:“ The regulatory landscape in the Middle East is evolving rapidly, with authorities working to enhance market transparency, foreign investor accessibility, and compliance frameworks.” Regional regulators are now actively modernising the financial infrastructure to attract global capital, aligning with international standards and ensuring a level playing field for foreign investors. Saudi Arabia’ s CMA and Tadawul are among the most prominent examples, where regulatory reforms have been introduced to make foreign investment more accessible and attractive.
At the same time, the UAE’ s financial free zones, particularly Abu
Dhabi Global Market( ADGM) and Dubai International Financial Centre( DIFC), are playing a key role in solidifying the UAE’ s position as a global investment hub. These zones offer independent regulatory frameworks, tax benefits, and legal structures aligned with international standards, making them particularly appealing to institutional investors and asset managers seeking stability and access to regional opportunities. El Habre says:“ In the UAE, ADGM and DIFC continue to attract global asset managers with flexible regulations and but uniform. Different jurisdictions have their own rules, requirements, and operational nuances, making cross-border transactions a bit of a task for custodians. Compliance isn’ t just about ticking boxes; it’ s about navigating the intricate web of regulations that shift depending on the market. Krunic points out the lack of regulatory coordination across the region, saying,“ The challenge is that people are at different cycles, and there isn’ t enough collaboration among regional players – banks, financial institutions, infrastructures.”
“[ The region ] can do business with the whole world, and they are doing business with the whole world.”
ALEX KRUNIC, SENIOR ADVISOR TO THE CHAIRMAN OF COMMERCIAL BANK OF KUWAIT innovative financial structures.” These zones are becoming key hubs for financial innovation, drawing global asset managers keen to tap into the UAE’ s progressive financial landscape. With regulations that encourage flexibility and new ideas, they’ re positioning the UAE as a main hub for international capital looking to expand into the Middle East and beyond. The result? A rapidly evolving financial landscape where custodians must evolve beyond traditional safekeeping to provide bespoke solutions, tailored to the increasingly sophisticated needs of the region’ s investor base. Khalid notes: " The Middle East is all about growth – measured and strategic. We ' re seeing significant activity across the region, though no two countries are the same. The overarching theme remains consistent: attracting both financial and human capital to drive local economies while integrating into the global landscape.”
Challenges facing the region The regulatory environment in the Middle East is anything
He adds:“ There should be a lot more. They shouldn’ t be trying to reinvent the wheel when it comes to regulation. That regulation already exists somewhere else – it just needs to be adapted to local market requirements.” While some markets have made strides in modernising post-trade processes, progress remains uneven. Saudi Arabia has led the way with its post-trade transformation programme, introducing a T + 2 settlement cycle and a central counterparty( CCP) through Muqassa to align with global standards, according to the Saudi Tadawul Group. Qatar, as reported by Qatar Stock Exchange, is following suit, gradually moving towards T + 2 to improve market efficiency. Meanwhile, the UAE has focused on enhancing the regulatory framework of its exchanges, with Abu Dhabi Securities Exchange( ADX) and Dubai Financial Market( DFM) adopting global best practices to attract foreign investment. Other markets are pushing forward with targeted reforms. Oman, according to the Muscat Stock Exchange, is restructuring its operations to enhance
40 Global Custodian Spring 2025