The Abu Dhabi Global Market (ADGM) is an international financial center located in Abu Dhabi, the capital city of the United Arab Emirates (UAE). It was established to promote and facilitate financial services and business activities within its jurisdiction. ADGM operates as an independent free zone, meaning it has its own legal, regulatory, and judicial framework separate from the UAE's federal legal system.
ADGM has its own legal and regulatory framework based on common law principles. It has its own courts, laws, and regulations tailored to meet the needs of businesses and financial institutions operating within the jurisdiction.
ADGM aims to provide a conducive environment for various financial services, including banking, insurance, asset management, capital markets, and fintech. It offers licenses and regulatory support for entities engaged in these activities.
ADGM has placed a strong emphasis on becoming a hub for fintech (financial technology) and innovation. It encourages the growth of fintech startups and companies by providing regulatory support, incubation programs, and access to a network of investors.
ADGM accommodates a wide range of companies, including local and international businesses, startups, and corporations. It offers various types of legal entities for companies to establish their presence, such as limited liability companies, branch offices, and special purpose vehicles.
The Financial Services Regulatory Authority (FSRA) is the regulatory body responsible for overseeing financial services activities within ADGM. It ensures compliance with ADGM's regulatory framework and promotes investor protection and market integrity.
ADGM is strategically located in Abu Dhabi, allowing businesses to connect with the broader UAE economy and the region's financial markets.
ADGM has established connections with other international financial centres, regulatory bodies, and industry associations, fostering collaboration and information exchange.
ADGM offers a business-friendly environment with streamlined registration processes, investor-friendly regulations, and modern infrastructure.
Financial licenses can be acquired within the Abu Dhabi Global Market (ADGM), one of the UAE's two Financial Free Zones. The Financial Services Regulatory Authority (FSRA), an independent risk-based regulator, is at the core of the ADGM model, granting licenses and regulating the operations of all banking and financial institutions in ADGM. The ADGM is a widely recognized and respected worldwide financial center that serves local, regional, and international organizations and gives approval for many types of financial licensing in ADGM.
ADGM Category 1 License Authorised Firm is a firm that is licensed to carry out the Financial Service of Accepting Deposits or Managing a Profit-Sharing Investment Account (received on an unrestricted basis). The Authorised Firm under this category may be authorised to conduct other Financial Services, but its authorisation for Accepting Deposits and/or Managing a Profit-Sharing Investment Account is what determines it as a Category 1 Authorised Firm, rather than another. A Category 1 firm may apply for an Islamic Window to conduct certain aspects of its business in a Sharia-compliant manner.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on the review of the application.
This is an Authorised Firm licensed to carry out the Financial Service of Dealing In investments as Principal and Providing Credit. In addition to this activity, the Authorised Firm under this category may also be authorised to conduct other Financial Services found in Category 3A, 3B, 3C or 4, provided that it cannot be authorised to conduct the Financial Services set out in Category 1.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on review of the application.
In this category, an Authorised Firm is licensed to carry on one or more of the Financial Services of: Dealing in Investments as Principal where it does only so as a Matched Principle; Dealing in Investments as Agent. An Authorised Firm grouped under this category may be authorised to conduct other Financial Services found in Category 3B, 3C or 4, but it cannot be 23 The Structure of the ADGM authorised to conduct any of the Financial Services in Categories 1 or 2.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on the review of the application.
An Authorised Firm in this category is licensed to Provide Custody (but only for a Fund) and act as trustee for a Fund. An Authorised Firm in this category can carry on financial services in Category 3C and 4 but cannot carry on financial services in Categories 1, 2 or 3A.
Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on the review of the application.
An Authorised Firm in this category may be licensed to carry on one or more Financial Services of Managing a Collective Investment Fund, Managing Assets, Providing Trust Services as a trustee of an express trust, Providing Custody (other than for a fund) and Managing a Profit-Sharing Investment Account (received on a restricted basis). An Authorised Firm that has a 3C licence can also provide Financial Services in Category 4 but cannot provide Financial Services in Categories 1, 2, 3A or 3B.
Expenditure based capital requirement of 18/52 of annual operating expenditure (as the Fund Manager will hold or control Client Money)
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on the review of the application.
Authorised Firms in this category can do one or more of Arranging Deals in Investments, Advising on Financial Products, Arranging Custody, Insurance Intermediation, Insurance Management, Operating an Alternative Trading System, Providing Fund Administration, Arranging Credit and Advising on Credit, operating a Crowdfunding Platform and/or Providing Trust Services (other than as a trustee of an express trust). In Categories 2-4, Authorised Firms may apply to conduct their business in a wholly Sharia Compliant manner or through an Islamic Window.
Expenditure-based capital requirement of 6/52 of annual operating expenditure (18/52 if will holding or controlling Client Money).
Note that additional capital requirements may be imposed by FSRA on the review of the application.
An Islamic Financial Institution carries out its entire business in accordance with the principles of Sharia and manages a profit-sharing investment account (received on an unrestricted basis).
Risk-based Capital minimum based on the totality of risks – CET1, 6%; Tier 1, 8%. Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by FSRA on the review of the application.
An ADGM representative office is an Authorised Firm and is regulated by the FSRA. However, it is not included in the above Authorised Firms categorisation table because it does not have any capital requirements as per the FSRA. This is because ADGM Representative Office can only be set up as a branch of an already established firm.
Any firm in a financial services sector can apply to be a Representative Office in ADGM but they must be regulated in an acceptable home jurisdiction (other than the ADGM). A representative office’s activities are confined to the general marketing of financial services and financial products already being offered from a location outside the ADGM by its head office or a member of its group.
An application outlining the proposed regulated activity (ies) and corresponding license type must be submitted to the proper regulatory body, which will examine the applicant's suitability: The ADGM Registry Authority and the FSRA.
During an introduction meeting, the draft regulatory business plan will be presented to the authorization team and regulators.
Compliance evaluation of the application papers, followed by submission of the entire application together with its regulatory business plan following acceptance of the draft regulatory business plan.
Before the incorporation is approved, all regulatory criteria associated with the sought category of the ADGM Financial license must be satisfied.
The Regulator will provide an In-Principal Approval letter to the applicant upon successful completion of their senior management's due diligence and fundamental aspects of the application. The entity is incorporated after meeting the Registration Authority's incorporation standards.
Permission to provide financial services if all requirements of the In-Principal Approval are satisfied.
Obtaining an ADGM Financial License involves navigating through a complex regulatory framework and fulfilling specific requirements. It's crucial to have legal assistance from experienced professionals who understand the local laws, regulations, and procedures. Here's an overview how our lawyers can assist you:
Our experienced lawyers provide an initial consultation to understand your business model, objectives, and the type of financial activity you intend to conduct within the ADGM. They also assess your eligibility and guide you through the regulatory landscape.
ADGM offers various license categories, such as banking, insurance, financial services, and more. We can help you determine the most suitable license category for your business activities.
Our team of professionals can assist in preparing a comprehensive application, ensuring all necessary documentation, financial statements, business plans, and compliance measures are in order. This is critical to demonstrate your business's viability and adherence to regulations.
Our lawyers will ensure your business adheres to ADGM regulations and other applicable laws. They can help you establish appropriate governance, risk management, and compliance frameworks.
Our lawyers can represent you in interactions with the ADGM Authority and regulatory bodies. This includes addressing any queries they might have during the evaluation process.
Our legal professionals review the terms and conditions of the license, ensuring that they align with your business interests. They also negotiate with regulatory authorities on specific points if needed.
Our lawyers conduct due diligence on your behalf, verifying that your business structure, operations, and financials are compliant with ADGM regulations.
Our professionals can draft and review legal agreements, contracts, and other documents necessary for your licensing process, such as shareholder agreements, employment contracts, and service agreements.
In case of any issues or disputes during the application process, our lawyers can assist you in appealing decisions or resolving conflicts.
After obtaining the license, our lawyers can help you maintain compliance with ongoing regulatory requirements. This might include reporting, audits, and updating your business practices as regulations evolve.
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