ADGM enhances its Venture Capital Managers Framework and updates FSRA Fees Rules

ADGM FSRA 25/05/2021
ADGM enhances its Venture Capital Managers Framework and updates FSRA Fees Rules

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has updated the regulatory framework for managers of Venture Capital Funds (the VC Framework) to allow for more flexibility in permissible investments in target entities. The FSRA has also enacted amendments that introduce greater flexibility for the payment of fees due to it, extending the scope of those who can pay fees on behalf of authorised entities and the methods by which fees can be paid.

Since the introduction of the VC Framework in May 2017, the FSRA has witnessed significant growth in the sector which plays an integral role in promoting new technology and innovation in the UAE and the region. In order to further facilitate VC investments, and taking on board feedback from industry participants, the FSRA has updated its VC Framework in a manner that we believe is risk proportionate and sound for VC managers as well as their investors. These changes to the VC Framework will contribute both to ADGM’s wider efforts in fostering a vibrant ecosystem for FinTech firms and small and medium enterprises and to the FSRA’s objective to regularly review and update its financial services rules and regulations to maintain a robust and risk proportionate regulatory framework.

The authorisation criteria and ongoing regulatory requirements under the enhanced VC Framework are set out in the revised Guidance and the related amendments to the Rulebooks can be found here: FSRA Rules (Venture Capital Managers) and Supplementary Guidance on Regulatory Framework for Fund Managers of Venture Capital Funds. The updates regarding the amendments to the Fees Rulebook can be found here: FSRA Rules (Fees).