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    Media Announcements ADGM FSRA Enhances Regulatory Framework to Broaden Participation in Private Capital Markets Download Arabic

    ADGM FSRA Enhances Regulatory Framework to Broaden Participation in Private Capital Markets

    ADGM FSRA: 08 February 2022

    Download Arabic

    The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has updated its regulatory framework to enable and foster greater participation by investors and private enterprises seeking funding. The enhanced regulatory framework aims to support the continued development of “private capital markets”.

    Access to investments in private markets has largely been limited to professional investors, a fact compounded by the absence of an organized market for such investments which has resulted in illiquidity. However, with the advent of innovative financial technology such as digital assets and tokenised securities, private capital markets are increasingly accessible to investors of all types and more efficient for private enterprises that seek to raise capital, while permitting such investments to be traded and therefore become more liquid. Such developments have increased the opportunities for appropriately knowledgeable and experienced non-professional clients to invest in high-growth start-ups and existing ventures, in accordance with their investment strategy.

    The private capital markets framework (PCM Framework) introduced by the FSRA promotes broader participation in this area, thereby leading to greater liquidity, through technology platforms that allow:

    1. private enterprises to raise capital from professional clients alongside a limited number of non-professional clients, the latter group being required to have relevant investment knowledge and experience, without the need to ‘go public’ and issue a prospectus; and
    2. securities issued through the framework to trade on technology platforms amongst professional clients and qualifying non-professional clients.

    Notably, the PCM Framework is available to serve larger private start-up companies that are seeking to significantly scale-up and expand their operations but do not yet wish to tap the public equity capital markets through an initial public offering.

    Emmanuel Givanakis, CEO of the FSRA, said: “The private capital markets framework supports the FSRA’s objective to continue to enhance and develop ADGM’s comprehensive, vibrant financing ecosystem. It will help support and bolster the growth of enterprises, while providing greater investor choices, and ultimately contributing to the growth and diversification of the economy of Abu Dhabi, the UAE, and the broader region. It complements our existing regulatory regime for private financing platform operators that enables early stage start-ups to seek funding from angel and venture capital investors. Collectively, our regulatory framework caters to the funding needs of a wide range of companies at different stages of their growth cycle.”

    The PCM Framework is set out in the amendments to the FSRA Rulebooks and the updated Guidance for operators of private financing platforms which can be found here:

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