FSRA
Financial Services Regulatory Authority
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi is the regulatory entity tasked with overseeing and supervising the financial services sector in Abu Dhabi, the United Arab Emirates (UAE). The FSRA was established in 2013 and functions under the Abu Dhabi Global Market (ADGM). It plays a crucial role in promoting and preserving the integrity, stability, and transparency of the financial markets within its jurisdiction.
The primary objective of the FSRA is to develop a robust and sustainable financial ecosystem that attracts local and foreign enterprises, investors, and institutions. By instituting and enforcing a comprehensive regulatory framework, it seeks to foster an environment favourable to economic growth, innovation, and investor confidence.
As a regulatory authority, the FSRA is responsible for licencing and supervising all financial institutions operating within the ADGM, such as banks, insurance companies, asset managers, exchanges, and other financial intermediaries. It establishes and enforces prudential and conduct standards to protect the interests of customers and investors by ensuring the safety and integrity of financial institutions.
In addition to its regulatory duties, the FSRA actively promotes the expansion and prosperity of the Abu Dhabi financial services industry. It facilitates experimentation and the introduction of new technologies and business models by providing a regulatory framework that encourages fintech and innovation. The Financial Services Regulatory Authority collaborates with industry stakeholders, academic institutions, and government entities to cultivate innovation, encourage entrepreneurship, and attract investment in financial technology.
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi has the authority to grant various licenses to financial institutions operating within the Abu Dhabi Global Market (ADGM). These licenses ensure that the institutions meet the necessary regulatory requirements and can operate in a compliant and supervised manner. Some of the licenses that can be granted by the FSRA include:
- Banking License:This license is required for entities wishing to conduct banking activities, such as accepting deposits, providing loans, and offering other banking services.
- Insurance License:Entities seeking to engage in insurance activities, including underwriting policies, issuing insurance contracts, and managing insurance funds, need to obtain an insurance license from the FSRA.
- Fund Management License:This license is granted to entities involved in managing investment funds, including hedge funds, mutual funds, and private equity funds. It allows them to conduct fund management activities within the ADGM.
- Brokerage License:Entities seeking to operate as brokers or intermediaries in securities, commodities, or other financial instruments need to obtain a brokerage license. This license enables them to facilitate transactions on behalf of their clients.
- Financial Advisory License:This license is granted to entities that provide financial advisory services, including investment advice, financial planning, and consultancy services. It ensures that these entities meet the necessary standards and can provide reliable and trustworthy advice to their clients.
- Regulated Exchange License: Entities wishing to establish and operate an exchange platform for trading securities, commodities, or other financial instruments must obtain a regulated exchange license from the FSRA.
- Money Services License:Entities involved in money transmission, foreign exchange services, or money remittance services need to obtain a money services license. This license ensures compliance with anti-money laundering regulations and provides oversight of these activities.
It’s important to note that the FSRA may have specific requirements and criteria for each type of license. Entities interested in obtaining a license from the FSRA should consult the regulatory framework and engage with the FSRA to understand the licensing process and the applicable regulations that they need to comply with.
Why should a Virtual Asset Service Provider be established in Abu Dhabi?
A Virtual Asset Service Provider in Abu Dhabi benefits from Abu Dhabi’s advantageous geographic distances and time zone differences in relation to international financial markets.
- Intelligently trained workforce.
- Excellent economic and political stability.
- Connectivity to Africa, Europe, the Middle East, and Asia.
- Regulations and rules were developed based on the English Common Law.
- There is no corporate income tax, no personal income tax, no limits on profit repatriation, no withholding taxes, and the UAE has a multitude of double tax treaties.
Regulated Activities:
The Financial Services Regulatory Authority (FSRA) is an activities-based regulator that allows entities to apply for a Financial Services Permission (FSP) covering only the regulated activities they intend to conduct. The summary below details the regulated virtual asset activities that can be offered in and from Abu Dhabi.
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REGULATED ACTIVITY |
DESCRIPTION |
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Dealing in Investments as Principal |
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Dealing in Investments as Agent |
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Arranging Deals in Investments |
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Advising on Investments or Credit |
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Operating a Multilateral Trading Facility (MTF) |
The operation of a Multilateral Trading Facility on which virtual assets are traded |
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Managing Assets |
Managing on a discretionary basis assets belonging to another person if the assets include any virtual asset |
Applicants seeking to undertake regulated activities that involve conventional assets in addition to virtual assets must be authorised by the FSRA for both asset types.
Licensing Timeframe
From the applicant’s initial contact with FSRA until the start of operations, the entire application procedure is estimated to take between 12 and 24 months to complete. This is highly dependent on the complexity of the proposed business model and activities, as well as the applicant’s preparedness to meet FSRA requirements.
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