ADGM’s FSRA Enhances its Regulatory Framework to Permit Private Credit Funds
- Alternative financing for private enterprises, especially within the Small- and Medium-sized Enterprise (SME) sector, is one of the major focusses of ADGM FSRA’s Private Credit Fund framework.
Abu Dhabi, UAE, 4th May 2023: Building on its progressive and innovative leadership in financial markets, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has announced today the enactment of amendments to its regulatory framework enabling ADGM-based collective investment funds to invest in credit by originating and participating in credit facilities. These enactments follow the publication of Consultation Paper No. 8 in 2022, seeking views concerning the establishment and operation of Private Credit Funds.
Typical credit funds earn returns from investment in loans, either by way of origination, participation or purchase, or a combination of the foregoing. Their popularity has grown due to the relative attractiveness of returns on lending compared to other asset classes, also being partly driven by the opportunity to finance dynamic, growth-stage companies. The framework for Private Credit Funds will improve access to alternative financing for private enterprises, driving innovation, productivity growth and competitiveness in the small and medium-sized business sector.
The amendments necessary to permit Private Credit Funds to operate in or from ADGM belong to the Financial Services and Markets Regulations (“FSMR”), the Fund Rules (“FUNDS”), Islamic Finance Rules (“IFR”) and the Glossary Rules (“GLO”) of the FSRA. The final form of the updated regulatory framework in this area benefitted from the industry feedback received through the previously published consultation paper, alongside dialogue with various fund industry participants and their respective advisors.
Emmanuel Givanakis, CEO of the ADGM FSRA, said: “The global private credit market has experienced significant growth in the past decade. Providing the opportunity for fund managers to create Private Credit Funds in ADGM supports the FSRA’s objective to continue to enhance and develop ADGM’s comprehensive and vibrant financing ecosystem, for both professional investors and those companies seeking funding. It will help support and bolster the growth of such companies, while providing greater investor choice and ultimately contribute to the growth and diversification of the economy of Abu Dhabi, the UAE, and the broader region.”
To view the detailed documents on ADGM FSRA’s latest enhancements to its Private Credit Funds regulatory framework, please click on the following links:
About Abu Dhabi Global Market (ADGM)
Abu Dhabi Global Market (ADGM) is the international financial centre (IFC) of the capital city of the United Arab Emirates, which opened for business on 21st October 2015. ADGM augments Abu Dhabi’s position as a leading financial centre and a business hub serving as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world.
Operating within an international regulatory framework based on direct application of The English Common Law, ADGM governs the entire Al Maryah Island which is designated as the financial free zone of Abu Dhabi.
ADGM is ranked as one of the most preferred top IFCs in the Middle East and Africa region and named MENA’s largest Fintech hub. Its progressive and inclusive business ecosystem gravitates toward global financial and non-financial institutions while leveraging synergies between ADGM and multiple jurisdictions positioned as one of the world’s most advanced, diverse and progressively governed financial hubs.
For more details on ADGM, please visit www.adgm.com or follow us on Twitter and Instagram: @adglobalmarket and LinkedIn: @Abu Dhabi Global Market (ADGM)