Financial Services Regulatory Authority

Getting Started Guide

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Contents
Introduction ................................................. ...........................................................................................................................………………3
FSRA’s Fees and Prudential Capital Requirements ................................................................................................................................... 4
Insurance ................................................................................................................................................................................................... 8
Staffing, Controlled and Recognised Functions ...................................................................................................................................... 10
Application Process and Forms ............................................................................................................................................................... 11
Funds ....................................................................................................................................................................................................... 13
Private Financing Platform ...................................................................................................................................................................... 14
Digital Investment Management (“Robo-advisory”)………………………………………………………………………………………………………………………….15
Registration and Incorporation ............................................................................................................................................................... 16
Office Space ............................................................................................................................................................................................ 17

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Introduction
Thank you for your interest in Abu Dhabi Global Market (ADGM).

To expedite your application, please find below a summary which aims to provide an overview of the Financial Services Regulatory Authority’s
(FSRA) authorisation requirements.

The FSRA is an activities-based regulator. Thus, a firm need only apply for a Financial Services Permission (FSP) covering the specific Regulated
Activities it proposes to conduct.

Below is a link to Schedule 1 of ADGM’s Financial Services and Markets Regulations 2015 (FSMR), which provides the definitions of the various
Regulated Activities.

https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/Financial_Services_and_Markets_Regulations%20(FSMR)%202015_Consolidated_%2024_F
ebruary_2020.pdf

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FSRA’s Fees and Prudential Capital Requirements
The ADGM accommodates the following Regulated Activities:

Category Fees Base Capital Requirement Expenditure Based Capital

Minimum//Risk Capital
Requirement/ Variable
Capital Requirement
a) Accepting Deposits. Authorisation Initial fee of $30,000. $10 million Risk Capital Requirement:
Additional fee of $5,000 per  Credit Risk Capital
additional Regulated Activity. Requirement.
 Market Risk Capital
1 Supervision Annual fee of $30,000.
Requirement.
Additional fee of $5,000 per
 Operational Risk
additional Regulated Activity.
Capital Requirement.
CVA Risk Capital Requirement.

b) Dealing in Investments as Principal (not as a Authorisation Initial authorisation fee of USD USD 2 million and refer to risk- 18/52nds of annual
Matched Principal); and 15,000. based capital requirements as set expenditure if holding Client
c) Providing Credit. Additional fee of USD 5,000 per out in PRU. Assets, 13/52nds if not.
2 additional Regulated Activity.
Supervision* Annual fee of USD 15,000.
Additional annual fee of USD
5,000 per additional Regulated
Activity
a) Dealing in Investments as Principal (where it Authorisation Initial authorisation fee of USD USD 500,000 Please also refer to 18/52nds of annual
does so only as a Matched Principal)1; and 15,000. risk-based capital requirement as expenditure if holding Client
b) Dealing in Investments as Agent. (A supplementary fee of USD set out in PRU. Assets, 13/52nds if not.
3A 35,000 applies for Applicants
seeking to deal (as matched (Base Capital Requirement for
principal) in OTC Derivatives with Applicants seeking to deal (as
Retail Clients)

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The FSRA imposes additional conditions on Applicants seeking to deal (as matched principal) in OTC Derivatives with Retail Clients. These conditions can be provided on
request.
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 Additional fee of USD 5,000 per matched principal) in OTC
additional Regulated Activity. Derivatives with Retail Clients is
Supervision* Annual fee of USD 15,000. USD 2 million)
(A supplementary fee of USD
35,000 applies for Applicants
seeking to deal (as matched
principal) in OTC Derivatives with
Retail Clients)
Additional annual fee of USD
5,000 per additional Regulated
Activity.
a) Providing Custody (only if for fund); and Authorisation Initial fee of USD 5,000. USD 4 million. 18/52nds of annual
b) Acting as the Trustee of an Investment Trust. Additional fee of USD 5,000 per expenditure if holding Client
additional Regulated Activity. Assets, 13/52nds if not.
3B
Supervision* Annual fee of USD 5,000.
Additional annual fee of USD
5,000 per additional Regulated
Activity.
a) Managing Assets; Authorisation Initial fee of USD 5,000. USD 250,000. 18/52nds of annual
b) Providing Custody (where it does so other than expenditure if holding Client
for a Fund); Assets, 13/52 if not.
c) Managing a Profit Sharing Investment Account
which is a PSIAr; Additional fee of USD 5,000 per
d) Providing Trust Services (where it is acting as additional Regulated Activity.
Trustee in respect of at least one express
trust)
Supervision* Annual fee of USD 5,000.
3C
Additional annual fee of USD
5,000 per additional Regulated
Activity.
Authorisation Initial fee of USD 5,000.
USD 150,000 for a Public Fund or 18/52nds of annual
e) Managing a Collective Investment Fund; and Additional fee of USD 5,000 per any other type of Fund that is expenditure if holding Client
additional Regulated Activity. available to Retail Clients; or USD Assets, 13/52nds if not.
50,000 for Exempt and Qualified
Supervision* Annual fee of USD 5,000.
Investor Funds.

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 Additional annual fee of USD
5,000 per additional Regulated USD 0 for Venture Capital Funds.
Activity.
a) Providing Money Services Authorisation Currency Exchange or Money Authorised Persons
Remittance – Initial fee of undertaking the Regulated
$15,000 Activity of Providing Money
Services must calculate the
Payment Services – Initial fee of Capital Requirement for each
$25,0002 activity it undertakes as the
Additional fee of $5,000 per highest of:
additional Regulated Activity. $250,000
Supervision Currency Exchange or Money (a) the applicable Base
Remittance – Annual fee of Capital Requirement
$15,000 (BCR) in PRU Section 3.3;
and
Payment Services – Annual Fee of (b) (i) where it undertakes
3C $25,0003 currency exchange the
Additional fee of $5,000 per Expenditure Based
additional Regulated Activity. Capital Minimum (EBCM)
as set out in PRU Section
3.7;
(ii) for a Money Remitter:
(A) The ECBM as set out
in PRU Section 3.7;
and
(B) the Variable Capital
Requirement (VCR)
calculated PRU Rule
3.6A.2;
(iii) For a Payment
Services Provider the VCR

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An Applicant for both of the activities as detailed above must pay to the Regulator an initial authorisation fee of $25,000.

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An Authorised Person with a Financial Services Permission to carry on the Regulated Activity of Providing Money Services that undertakes both of the activities detailed above
must pay to the Regulator an annual supervision fee of $25,000.
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 in accordance with PRU
Rule 3.6A.4 or
(iv) for a Stored Value
Provider the VCR in
accordance with PRU Rule
3.6A.6
a) Arranging Credit; Authorisation Initial fee of USD 5000. USD 10,000. Except; 18/52nds of annual
b) Arranging Deals in Investments; Additional fee of USD 5,000 per expenditure if holding Client
c) Advising on Investment or Credit; additional Regulated Activity. To carry out the Regulated Assets, 6/52nds if not.
d) Arranging Custody; Activity of Operating a Private
e) Acting as the Administrator of a Collective Financing Platform and holds
Supervision* Annual fee of USD 5,000.
Investment Fund; Client Assets, in which case the
f) Administering a Specific Benchmark; Additional annual fee of USD Base Capital Requirement is
g) Operating Credit Rating Agency; 5,000 per additional Regulated 150,000.
h) Operating a Multilateral Trading Facility or Activity.
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Organized Trading facility; To carry out the Regulated
i) Operating a Private Financing Platform; Activity of Providing Third Party
j) Operating a Representative Office; Services, in which case the Base
k) Providing Information in Relation to a Capital Requirement will be
Benchmark; and 50,000.
l) Providing Trust Services other than as Trustee
of an express trust.
m) Providing Third Party Services
n) Insurance intermediation
o) Insurance management
An Islamic Financial Institution Managing a Profit Authorisation Initial fee of $30,000. $10 million Risk Capital Requirement:
sharing investment account which is a PSIAU. Additional fee of $5,000 per  Credit Risk Capital
additional Regulated Activity. Requirement.
 Market Risk Capital
Supervision Annual fee of $30,000.
Requirement.
Additional fee of $5,000 per  Operational Risk
5 additional Regulated Activity.
Capital Requirement.
 Displaced
Commercial Bank
Capital Requirement.
 CVA Risk Capital
Requirement.

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Insurance
Prudential Category Fees Basic Requirement Minimum Capital Requirement

Effecting and/or Carrying Out Contracts of Insurance Authorisation Initial fee of $30,000. Adequate Adjusted Capital Resources (ACR) equal to or higher
as Principal Capital Resources. than the Minimum Capital Requirement:
Additional fee of
$5,000 per additional ACR= AE – HCA;
Regulated Activity.
AE = Adjusted Equity
Supervision Annual fee of $30,000. HCA = Hybrid Capital Adjustment
Additional annual
supervision fee of (See Pin1 APP3.)
$5,000 per additional
Regulated Activity. MCR = DRC + IVRC + OARC + OLRC + CRC + SFAC +
1 URC + RRC + LIRC + AMRC
(See PIN APP4.)

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 Effecting and/or Carrying Out Contracts of Insurance Authorisation Initial fee of $5,000.  Class 1: Premium Risk Component:
as a Captive Insurer US$150,000
 18% X Net Written Premium up to US$5
 Class 2: million
US$250,000  16% x Net Written Premium in excess of
US$5 million
 Class 3:
2 Supervision Annual fee of $5,000. US$500,000 Technical Provision Risk Component (General
Insurance):
 Class 4: US$1
 5% x net claims reserve
million

Technical Provision Risk Component (Long-term

Insurance):

 2.5% x policyholder liabilities

Effecting and/or Carrying Out Contracts of Insurance Authorisation Initial fee of $5,000  Class 1: Minimum Segmental Capital Requirement calculated
as a Captive Insurer being a Cell Company for each Cell US$150,000 under PIN APP6.
Company.
Initial fee of $1,000  Class 2:
for each individual Cell US$250,000
of a Cell Company.
3 Supervision Annual fee of $5,000  Class 3:
for each Cell US$500,000
Company.
Annual fee of $1,000  Class 4: US$1
for each individual million
Cell of a Cell
Company.

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Staffing, Controlled and Recognised Functions
A number of functions within a firm are either designated as Controlled Functions, which require approval by the FSRA, or as Recognised
Functions, which are appointed by the firm itself and notified to the FSRA.

 Controlled Functions are: Senior Executive Officer; Licensed Director; and Licensed Partner.
 Recognised Functions are: Finance Officer; Compliance Officer; Money Laundering Reporting Officer; Responsible Officer; and Senior
Manager.

Mandatory appointments (for all firms) are:

 Senior Executive Officer (must be resident in UAE);

 Finance Officer;
 Compliance Officer (must be resident in UAE); and
 Money Laundering Reporting Officer (must be resident in UAE).

The same individual cannot be both the Senior Executive Officer and the Compliance Officer and/or Money Laundering Reporting Officer.
However, one individual might be able to carry out the roles of both Compliance Officer and Money Laundering Reporting Officer, as these
are seen as compatible responsibilities. Depending on the nature, scale, and complexity of the proposed entity and its business, the FSRA
would entertain proposals for the outsourcing of the Compliance Officer and Money Laundering Reporting Officer functions to a third-party
consultant, or to a group entity or Head Office, subject to the usual questions over suitability and capacity. The Finance Officer could also be
based in another Group entity or the Head Office or be outsourced by a third-party provider.

Where the firm is incorporated in the ADGM (that is, it is not a Branch of a non-ADGM company), it must seek approval from the FSRA for
each of its directors under the Controlled Function of Licensed Director. Note, there is an application (but no annual supervision) fee of USD
500 for each individual seeking to exercise a Controlled Function.

See the General Rulebook (GEN), Chapters 5.3 and 5.4:

https://en.adgm.thomsonreuters.com/sites/default/files/net_file_store/ADGM1547_7584_VER05030220.pdf

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Aside from the mandatory appointments noted above, the FSRA does not require a minimum headcount, but we expect a firm to devote
sufficient resources, including human resources, to allow it to effectively carry on and control the Regulated Activities covered by its Financial
Services Permission. For a large enterprise, or one carrying on a wide range of Regulated Activities, for example, this might include Senior
Managers with responsibility for functions such as the various business lines, risk management, treasury, and internal audit.

Application Process and Forms

The following link is to a guide to becoming authorised in the ADGM:

https://www.adgm.com/financial-services-regulatory-authority/fsra-general-application-process

The link below is to the various application forms that may be required, but note, these are only PDF, non-editable forms. You will have to
contact the FSRA to receive editable Word versions:

https://www.adgm.com/setting-up/authorisation-and-supplementary-forms

These forms consist of a core application form that is applicable to all applicants, the General Information for Regulated Activities (GIRA)
form. It is complemented by supplementary forms specific to the Regulated Activities being proposed; for example, an applicant seeking a
Financial Services Permission for the Regulated Activity of Managing Assets would need to complete the GIRA, and (at least) the Asset
Management Supplement (AMS) form. The breadth of proposed activities will dictate the number of supplementary forms that would need
to be completed and submitted. Additionally, an Applicant will need to complete and submit forms APS-1 and RPS-1 for the individuals who
will exercise the functions outlined above, and for any other senior management or responsible positions.

Section 6 of the GIRA contains a template for the Regulatory Business Plan (RBP). The template poses questions, the motivation is to help
an Applicant construct a RBP that addresses most (if not all) pertinent issues, thus avoiding the need for the FSRA to respond with questions
on an iterative basis.

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Should you wish to apply, we would first want to see draft process flow-charts of the intended Regulated Activities. For relatively simple
business models such as advising, these process flow diagrams might not be necessary. They are geared to show the differences between
activities like Managing Assets vs Managing a CIF, or Dealing as Agent vs Principal, etc. Once we understand all aspects of the process flow-
charts we would then expect to receive your completed RBP (Section 6 of the GIRA). The RBP must be populated on the form itself.

If a final application is found to be satisfactory after review, the Authorisation team will present an assessment and recommendation for
in-principle approval to the FSRA’s Authorisation Committee. If that recommendation is endorsed, an in-principle approval will be granted
subject to a number of conditions. These are usually administrative and must be satisfied prior to the granting of the Financial Services
Permission. These might include allocation of shares, provision of share capital, staffing, incorporation or registration of the firm with
ADGM’s Registration Authority, obtaining a commercial license, and fit-out of premises. Usually, the FSRA’s review and in-principle
approval of a standard application for Category 2 to a Category 4 activities would take around 6 to 8 weeks upon receipt of application
and Authorisation fees. Thereafter, completion of the in-principle approval conditions would be a matter for the Applicant. The in-
principle letter is valid for three months.

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Funds
The Funds Rulebook is the main reference concerning Funds rules and regulations. A Fund in the ADGM must be managed by either a
Fund Manager domiciled in the ADGM or by a Foreign Fund Manager established in a Recognised Jurisdiction. To establish as a Fund
Manager in the ADGM, the Applicant will need to first apply to the FSRA for a Financial Services Permission (FSP) to conduct the Regulated
Activity of Managing a Collective Investment Fund. This Regulated Activity is defined in FSMR. A Fund Manager that is domiciled and
regulated in one of the Recognised Jurisdictions listed in the Fund Rules may apply to the FSRA to act as a Foreign Fund Manager of an
ADGM Fund, as described in chapter 7.1 of the FUND Rules.

A copy of the Funds brochure can be found here. It gives a broad overview of the framework in ADGM, however, it is the FUND Rules
which are most important to understand if you are intending to apply as a Fund Manager.

A Fund established in ADGM must fall into one of three categories: Public Fund (i.e. Retail); Exempt Fund; or a Qualified Investor Fund
(QIF). The Fund category is largely dictated by the type of investor a Fund Manager intends to target the Fund at, and the minimum
investment each investor will be required to make. A Fund can be established using a legal form such as a Closed / Open Ended Investment
Company, an Investment Trust, or a Limited Partnership.

A Fund Manager must notify the FSRA of its intention to market an Exempt Fund or QIF using the Form FEQN. A Fund Manager of a Public
Fund must apply for registration of the Fund using Form FPR.

Please visit https://www.adgm.com/setting-up/authorisation-and-supplementary-forms

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Private Financing Platform
ADGM launched its framework to regulate operators of Private Financing Platforms (PFPs) serving equity investment, debt financing and trade
receivables funding needs of start-ups, private enterprises and SMEs.

PFPs are online platforms that enable start-ups and smaller enterprises to obtain financing from private and institutional investors to launch and
grow their businesses. Such PFPs allow innovative business models that serve different business and client segments.

The new framework requires the operators of PFPs, to have appropriate systems and controls in the areas of due diligence of those enterprises
listed on the PFP, risk disclosures, safeguarding of client assets, anti-money laundering and counter-terrorist financing (AML/CFT), amongst
others.

The new framework for PFPs will further add to FSRA’s comprehensive regulatory regime to support a wide-range of financing solutions for varying
business needs, and bolster the growth and diversification of UAE’s enterprises and economy.

A link to the framework and guidance is attached here.

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Digital Investment Management (“Robo-advisory”)
ADGM has issued its regulatory framework for Digital Investment Managers (also known as ‘robo-advisors’), operating in ADGM.

Digital Investment Managers provide investment management services using algorithm-based tools and technology to interact with more tech-
savvy clients. This technology allows investment managers to provide tailored investment management services to clients in a cost-effective and
scalable way. Digital Investment Managers have the potential to play an important role in promoting financial inclusion and providing a wider
range of options for retail client investors in the Middle East and Africa region. To support the industry, the FSRA has prepared this guidance to
illustrate how its regulatory framework applies to these businesses and how robo-advisors can operate more effectively in ADGM.

Digital Investment Managers operating in ADGM will require an FSP to undertake any Regulated Activity as part of their business model. The
FSRA has observed that the core services provided by a Digital Investment Manager typically involve the provision of one or more of the
following Regulated Activities.

a. Advising on Investments or Credit: for example, recommending that a client invest in a portfolio of Financial Instruments, or
recommending that a client buy or sell particular Financial Instruments in order to rebalance the client’s portfolio.
b. Arranging Deals in Investments: for example, after recommending that a client invest in a portfolio of Financial Instruments and, with the
consent of the client, passing instructions to a broker to buy those Financial Instruments on the client’s behalf.
c. Managing Assets: for example, exercising discretion to rebalance a client’s portfolio by passing instructions to a broker to either buy or sell
particular Financial Instruments on the client’s behalf.

Prudential capital requirements: Lowered Prudential capital requirements:

*Details of the lowered prudential capital requirements for Digital Investment Managers who
meet the criteria in Paragraph 3.11 of the Supplementary Guidance (“Robo-advisory”)

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Registration and Incorporation
Details of Registration Authority and other fees linked to registration and licensing may be found here: RA Schedule Fees. In summary, these
are:

Service Fees
Name Reservation* USD 200
Application for Registration* USD 1,500
Issuance of License* USD 4,000
Business Activity Fee* USD 9,000
Data Protection Fee* USD 300
Total USD 15,000

The ADGM Registration Authority will be able to provide you with further details of the process and the fees involved in setting up the
company structure. Please contact [email protected] for details.

Visas and Government Services

The Corporate Relations team supports registered entities and their employees by working closely with the relevant government authorities
and providing a simple and streamlined process, and one point of contact. The Corporate Relations team will guide you through the visa process
and ensure a smooth transition over to ADGM.
You can find more details here.

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Office Space
An ADGM firm must have a physical presence on Al Maryah Island, but ADGM itself is not involved in the leasing of premises. However, this matter
is handled by the Real Estate and Infrastructure division within the Registration Authority which can be reached at [email protected]. FSRA has no
requirements in terms of the size of premises, except that it should be suitable for the purposes of the financial services an Authorised Firm is
offering. There are several options available:

1. Wework – offering private offices, dedicated desks, and open workspace

Hub71 - Al Maryah Island Office Space | WeWork

2. Regus – Offering privates offices, office suites, and co-working space

Office Space in ADGM AL Maqam Tower | Regus AE

3. Mubadala Micro Offices – Pre-fitted and furnished offices ranging in size from 50 sqm – 200 sqm. These are pre-leasing now and
should be available to occupy by December.
Contact: Jasem at Mubadala - [email protected]

4. Aldar Cloud Spaces – Offering single desk and smaller sized office units for 2-8 desks. In the process of setting up in ADGM currently
and aiming to be available in Q1 2022.
Contact Malak at Aldar - [email protected]

5. Shell & Core space – Office space is available for larger businesses wishing to fit out their own space, with full floor and half floor
options available, in addition to a smaller number of units of around 250 – 300 sqm.
Contact Anwar at Mubadala - [email protected]

Additional options are in development to meet future demand.

You can find pictures and more details here.

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Should you have any further queries, please let us know.

With Regards,

Financial Services Regulatory Authority

[email protected]

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