Abu Dhabi Global Market is updating its regulatory framework for investment funds. The new rules are aimed at creating a more proportionate system for smaller fund managers, institutional-focused firms and other investment businesses operating from the financial centre.
The Financial Services Regulatory Authority of Abu Dhabi Global Market, or ADGM FSRA, announced on September 16, 2026 that it had finalised enhancements to its funds framework following industry consultation. These changes follow Consultation Paper No. 12 of 2025. In addition, they introduce new regulatory categories while revising several existing requirements.
ADGM Introduces a Streamlined Framework for Smaller Fund Managers
One of the most notable changes is the creation of a more streamlined regime for eligible smaller fund managers. Firms that meet the relevant requirements may apply to operate as Sub Threshold Fund Managers under the revised framework. As a result, the approach gives the FSRA more flexibility to apply requirements that reflect the scale and nature of a firm’s activities. The FSRA does this instead of placing every fund manager under the same regulatory structure.
The change could make ADGM more accessible to emerging fund managers. These managers may not operate at the same scale as larger global investment firms. At the same time, those businesses will remain subject to the financial centre’s regulatory oversight.
Institutional Fund Managers Receive a Dedicated Regulatory Category
The revised framework also introduces a dedicated structure for fund managers serving institutional investors. Eligible firms managing funds exclusively for institutional investors may apply to become Institutional Fund Managers. On top of that, qualifying asset managers can seek Institutional Fund Asset Manager status.
This gives firms focused on professional and institutional capital a clearer regulatory pathway. It also reflects the growing importance of private capital, institutional investment and asset management to Abu Dhabi’s financial sector.
ADGM has continued to attract fund and asset managers as its investment ecosystem expands. The new framework gives the financial centre another way to accommodate different business models. It does this without applying identical regulatory requirements across the entire market.
Employee Investment in Private Funds Gets More Flexibility
The updated rules also address employee participation in private funds managed by their employer. Specifically, the framework makes it easier for employees of fund management firms to invest in certain private funds connected to the businesses they work for.
For fund managers, this can provide more flexibility when structuring employee incentive arrangements. It may also help firms align employees more closely with the performance and long-term objectives of the funds they manage.
The change formed part of the FSRA’s broader consultation process. It reflects an effort to update rules that affect the day-to-day structure of private investment businesses.
Foreign Fund Manager Requirements Are Also Being Revised
Foreign Fund Managers are also affected by the regulatory changes. The FSRA has updated requirements applying to these firms after reviewing feedback received during the consultation process.
The changes will not take effect immediately for every existing business. ADGM has introduced a transition period until March 31, 2027 for affected Venture Capital Fund Managers and Foreign Fund Managers. The regulator said it will contact relevant firms regarding the transition process.
This gives existing managers time to review their current arrangements and understand the revised requirements. They can then make any necessary changes before the transition period ends.
Existing ADGM Firms Can Apply for a New Regulatory Status
Fund managers already operating within ADGM may also apply to change their regulatory status. However, they must meet the requirements of the newly introduced categories.
Eligible fund managers can seek recognition as Sub Threshold Fund Managers or Institutional Fund Managers. Asset managers that meet the appropriate criteria may apply for Institutional Fund Asset Manager status.
For firms already established in the financial centre, the new categories provide an opportunity to align their regulatory status more closely with their size, investor base and operating model.
The New Rules Support Abu Dhabi’s Growing Asset Management Sector
The changes arrive as Abu Dhabi continues to build its position as a regional centre for asset management, private markets and institutional investment.
ADGM has seen continued growth in the number of fund managers, investment firms and financial institutions establishing operations within the jurisdiction. A more flexible regulatory framework could support that expansion. It does so by giving businesses clearer options depending on the type of investors they serve and the scale of their operations.
The revised funds framework also reflects the wider competition among international financial centres to attract asset managers while maintaining credible regulatory standards.
ADGM Continues to Refine Its Financial Services Framework
The latest funds framework update forms part of ADGM’s wider effort to regularly review its financial regulations as markets, investment structures and business models evolve.
The FSRA frequently uses consultation papers to gather feedback from financial firms, legal professionals and other industry participants before finalising regulatory changes. This approach allows the regulator to adjust rules. It also considers how they may affect businesses already operating within the financial centre.
For companies considering Abu Dhabi as a base for fund management or investment activities, the latest changes provide another indication that ADGM is continuing to refine its framework. It does this rather than relying on a single regulatory model for every type of financial firm.
What Happens Next
The immediate focus now shifts to implementation. Existing Venture Capital Fund Managers and Foreign Fund Managers affected by the revised rules have until March 31, 2027 to complete the transition process.
Meanwhile, eligible fund managers and asset managers can review whether the new Sub Threshold Fund Manager, Institutional Fund Manager or Institutional Fund Asset Manager categories are suitable for their businesses.
The practical impact will become clearer as firms begin applying under the new framework. In addition, the FSRA will work with existing businesses through the transition period.
Sources
Abu Dhabi Global Market, “Regulatory Update – ADGM FSRA Finalises Enhancements to its Funds Framework,” September 16, 2026.
https://www.adgm.com/media/announcements/regulatory-update-adgm-fsra-finalises-enhancements-to-its-funds-framework
Abu Dhabi Global Market, “ADGM FSRA Proposes Enhancements to its Funds Framework,” November 24, 2025.
https://www.adgm.com/media/announcements/adgm-fsra-proposes-enhancements-to-its-funds-framework
Abu Dhabi Global Market, “FSRA Showcases Enhancements to its Funds Regulatory Framework at ADFW,” December 9, 2025.
https://www.adgm.com/media/announcements/fsra-showcases-enhancements-to-its-funds-regulatory-framework-at-adfw
ADGM Public Consultations.
https://www.adgm.com/legal-framework/public-consultations