ADGM FSRA Issues Enhancements to its Capital Markets Framework Including Virtual Assets

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) today announces significant enhancements to its capital markets framework, across spot commodities, securities, derivatives, benchmarks, environmental instruments and virtual assets that will further improve on its innovative and progressive regime and leadership in financial markets.

Designed to reinforce and secure ADGM’s market-leading capital market ecosystem across the Middle East and North Africa (MENA) region, the wide-ranging changes were first proposed in March 2022 and received significant and widely supportive feedback from the industry and wider stakeholders. 

These changes enable allowing greater participation within primary and secondary markets while also ensuring ADGM market participants continue to operate in accordance with and under the protection of, the highest regulatory standards

The implementation of these changes is intended to significantly benefit markets-related activities, affecting Recognised Investment Exchanges, Recognised Clearing Houses, Multilateral Trading Facilities (MTFs), Organised Trading Facilities (OTFs), market intermediaries, Remote Bodies, Remote Members, Offerors/Issuers, Listed Entities, Reporting Entities, and Sponsors.

Alongside its innovative approach to virtual assets, ADGM has now implemented its regulatory framework for spot commodity and environmental instrument activities, making it the first international financial centre in the MENA region to do so.

Another region-first inclusion in this framework highlights purpose-built offerings and listing rules relating to mining and petroleum companies. The FSRA has also strengthened its requirements in line with IOSCO and comparable jurisdictions in respect of capital raising requirements, continuous disclosure obligations, preference securities, and weighted voting rights.

Outside the changes implemented across conventional financial services activities, MTFs/Custodians operating within ADGM are now able to seek approval from the FSRA to engage in Non-Fungible Token (NFT) activities. This continues to build on the globally leading position established by ADGM in 2018 when it established the first-of-its-kind comprehensive regulatory framework for virtual asset activities.

Commenting on the implementation of these changes, His Excellency Ahmed Jasim Al Zaabi, Chairman of ADGM, said: “ADGM wishes to thank all those who responded to the consultation paper released earlier this year.  The degree of interest shown in the consultation, as well as the keen interest by participants looking to undertake activities in these significant new areas, is hugely positive.  Collectively, ADGM and its market participants continue to provide regulatory and industry leadership, positioning ADGM and Abu Dhabi as the jurisdiction of choice. These enhancements to our capital markets framework will unlock the next stage of investment and growth opportunities, across commodities, environmental instruments, virtual assets activities and wider financial markets.”

Emmanuel Givanakis, CEO of the FSRA, said: “These important and major enhancements to our capital markets regulatory framework are a vital part of the FSRA’s objective to continue developing ADGM’s overall comprehensive and progressive regulatory framework. It will help to support and bolster the growth of our vibrant ecosystem that will, in turn, contribute to the growth and diversification of Abu Dhabi, the UAE and the MENA region’s economy as a whole.”

The amendments fall across the FSRA’s Financial Services and Markets Regulations (“FSMR”), the Market Rules (“MKT”), Market Infrastructure Rulebook (“MIR”), General Rulebook (“GEN”), Conduct of Business Rulebook (“COBS”), Islamic Finance Rules (“IFR”) and Fees Rules (“FEES”).

The amendments also replace the existing Rules of Market Conduct (“RMC”) with a Code of Market Conduct (“CMC”).