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23 May 2024

ADGM introduces enhanced prudential regime for investment firms


The Financial Services Regulatory Authority, FSRA, of Abu Dhabi Global Market, ADGM, will publish and ‘go live’ with a number of enhancements to its "Prudential – Investment, Insurance Intermediation and Banking", PRU, Rulebook.

This follows a successful public consultation which was completed on 7th December 2017.

The new enhancements cover the prudential supervision of banks, insurance intermediaries and investment firms operating within ADGM‘s jurisdiction and support its internationally-recognised prudential regime, based on the best practices and standards developed by the Basel Committee on Banking Supervision, BCBS. These improvements are part of the FSRA’s ongoing commitment to foster a dynamic and well-regulated platform for institutions within the scope of PRU to operate their businesses prudently and efficiently.

The newly implemented changes include; the introduction of revised capital requirements through implementation of the Countercyclical Capital Buffer, Credit Valuation Adjustment and Central Counterparties frameworks, the requirement for certain capital instruments to absorb losses at the Point of Non-Viability, full implementation of the Leverage Ratio floor, the disclosure of the Leverage Ratio and the Liquidity Coverage Ratio; and the introduction of new reporting requirements, and further miscellaneous amendments that will provide greater clarity to institutions operating in ADGM.

The amendments to PRU and other consequential amendments to the rulebooks for insurance and captive insurance business are also effective immediately. The updated PRU Rulebooks is available on the website.