ADGM launches new private financing platform regulatory framework to support start-ups and enterprises

~ Enables start-ups and small- and medium-sized enterprises (SMEs) to find new, alternative sources of funding while applying due safeguards to ensure platforms operate in a safe and sound manner for investors 

Abu Dhabi Global Market (ADGM), the International Financial Centre in Abu Dhabi, is pleased to launch its framework today 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.

 This follows the successful completion of a public consultation by the Financial Services Regulatory Authority (FSRA) on 16 August 2018 to introduce a tailored, risk-proportionate regulatory framework for transactions facilitated through a PFP in ADGM.

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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.

Mr Richard Teng, Chief Executive Officer, FSRA of ADGM, said: “As an international financial centre, ADGM continuously enhances and strengthens its offerings and regulatory regime to meet fast-evolving needs of local and international economies.  The PFP regulatory framework reinforces FSRA’s role in providing a trusted and sustainable financial services sector that enables start-ups and established businesses to access the appropriate capital and liquidity for expansion and growth.”

The FSRA also published the ‘Guidance – Regulatory Framework for Private Financing Platforms’ and the application form for interested applicants to operate a PFP within ADGM. The Guidance elaborates on ADGM’s approach towards the regulation of operators of PFPs and is a useful resource for interested applicants.

To access the Guidance, Application Form and FSRA’s Regulations and Rules, Please find it attached:

  • Guidance Document
  • Application Form
  • FSRA Regulations and Rules

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