ADGM: from 16 September 2026 the FSRA changes the rules for fund managers. New Sub-Threshold and Institutional Fund Manager categories, foreign managers can no longer act as a 'host' licence, transition period until 31 March 2027

The reform closes the consultation opened in November 2025 by the FSRA, the Financial Services Regulatory Authority of Abu Dhabi Global Market. Until yesterday a manager with a USD 30 million fund had to meet the same requirements as a USD 2 billion platform. It affects only those who hold or are planning a fund-management vehicle in ADGM, family offices included, and investors in ADGM funds run by foreign managers.

What happened

On 16 September 2026 the Financial Services Regulatory Authority (FSRA), the financial services regulator of Abu Dhabi Global Market (ADGM), published the final version of its new rules on funds and fund managers, closing Consultation Paper No. 12 of 2025 opened in November. The rules are already in the rulebook, with application guidance dated 16 September, and the forms to apply for a change of category are online. There are four changes. The first is the Sub-Threshold Fund Manager category, for managers of closed-ended funds reserved for qualified investors with aggregate committed capital below a threshold: reduced minimum capital, no requirement for a Finance Officer or an internal audit function. The second is the Institutional Fund Manager category, for managers of funds sold only to institutional investors, alongside a new Institutional Fund Asset Manager category for firms that carry out portfolio management for those funds without being their manager. The third formalises the vehicles through which a manager's employees invest in the funds they help to manage. The fourth concerns Foreign Fund Managers, the foreign managers of funds domiciled in ADGM: they must have a genuine connection to ADGM, submit to the jurisdiction of the ADGM Courts, and can no longer act as a 'host' manager, that is hold the licence while investment decisions are taken outside. The figures, USD 200 million of committed capital for the Sub-Threshold category and a USD 5 million minimum subscription per investor for the institutional category, are those proposed in the consultation: the final thresholds are to be read in the rulebook text, not in the summaries.

What changes in practice

Before this reform ADGM applied broadly the same framework to almost all managers, with the exception of the Venture Capital Fund Manager regime: a USD 30 million club deal and a USD 2 billion platform carried the same capital, staffing and control obligations. From now on a small manager, or one serving only institutional investors, can apply to move to a category with lower fixed costs, and can do so immediately, with the forms already published. The rule on foreign managers goes in the opposite direction: the structure in which the licence sits in ADGM while the decision-making team sits in London, Zurich or Singapore, with ADGM reduced to a nameplate, no longer holds. Anyone with that structure must bring decision-making into ADGM or change their arrangements by 31 March 2027, and the FSRA has said it will contact the firms concerned directly. The same transition applies to current Venture Capital Fund Manager licence holders, whose regime the consultation proposed folding into the new Sub-Threshold category.

Who it applies to

Holders of an FSRA fund-management licence in ADGM, and in particular current Venture Capital Fund Managers and Foreign Fund Managers. Anyone planning a fund-management vehicle in ADGM: a family office that wants to manage wealth through a fund, a club deal among entrepreneurs, a real estate or private equity fund of limited size. And, from the other side, investors in an ADGM-domiciled fund run by a foreign manager, because that manager must reorganise by March 2027 and the change may touch the fund's governance. It does not concern those who hold an ADGM holding company, SPV or operating company without a financial services licence, and it does not concern the Dubai International Financial Centre (DIFC), which is still consulting on its own reform.

The exposure

The most concrete exposure is that of the foreign manager who waits for the FSRA's letter. From 1 April 2027 a structure in which the ADGM licence covers decisions taken elsewhere is outside the rules, and bringing the substance of a management activity into ADGM, with people, delegations and procedures, is not something that closes in a month. The second exposure is quieter and concerns those who could lighten their obligations and do not: a sub-threshold manager that keeps paying for a Finance Officer, internal audit and full capital spends every month on requirements it has not had since 16 September. The third is relying on the figures in the summaries: the thresholds everyone has read are those of the consultation, and a plan built on the wrong number comes apart at the recategorisation application.

What to do now

Any FSRA licence holder, whatever the category, takes their permission and the list of funds managed and checks two things: aggregate committed capital and who the eligible investors are. If the firm falls within the limits of one of the two new categories, it applies for recategorisation with the form published on adgm.com, after reading the thresholds in the rulebook text of 16 September. A Foreign Fund Manager writes down where investment decisions are taken today and by whom: if the answer is not 'in ADGM', the reorganisation plan starts now, with 31 March 2027 as the final deadline. An investor in an ADGM fund with a foreign manager asks the manager in writing how it intends to comply. Anyone planning an ADGM vehicle who has not yet filed the application reruns the numbers on the new category before filing.

Sources

Published 18 September 2026 on the basis of public sources and official United Arab Emirates instruments. This is not legal or tax advice. Verify your position with a qualified professional before acting.