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The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective s. ADIA is wholly owned by the Government of the Emirate of Abu Dhabi and has an independent legal identity with full capacity to act in fulfilling its statutory mandate and objectives.
Law 5 provides separation of roles and responsibilities of the owner, the governing entity, and the management. The Council was established by Law No. Pursuant to Law No. In addition, it may issue directions to ADIA and other specified state-owned entities , including in relation to government ownership policy, investment controls and standards as well as borrowing policy. As defined by Law 5 , ADIA's purpose is to receive funds of the Government of the Emirate of Abu Dhabi allocated for investment, and invest and reinvest those funds in the public interest of the Emirate in such a way so as to make available the necessary financial resources to secure and maintain the future welfare of the Emirate.
ADIA carries out its investment programme independently and without reference to the Government of the Emirate of Abu Dhabi or the Government's other "affiliates" that also invest funds on behalf of the Government of the Emirate of Abu Dhabi. As this principle refers to direct domestic macroeconomic implications it does not apply, as ADIA manages a diversified global investment portfolio and its assets are not classified as international reserves. The general approach to withdrawals from the SWF and spending on behalf of the government should be publicly disclosed.
The Government of the Emirate of Abu Dhabi provides ADIA with funds that are allocated for investment and surplus to its budgetary requirements and its other funding commitments. In accordance with Law 5 ADIA, is required to invest and reinvest these funds and make available, as needed, to the Government of the Emirate of Abu Dhabi the necessary financial resources to secure and maintain the future welfare of the Emirate.
This ensures it is always able to meet its obligations to the Government of Abu Dhabi, if required, without compromising long-term investment goals. The relevant statistical data pertaining to the SWF should be reported on a timely basis to the owner, or as otherwise required, for inclusion where appropriate in macroeconomic data sets. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.