ADGM Rolls Out Revised Prudential Framework for Lower-Risk Firms

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has finalised a series of amendments to its Prudential Rulebook (PRU), marking a strategic recalibration of capital and liquidity requirements for lower-risk financial institutions operating in the jurisdiction.

In a move that balances supervisory rigour with proportionality, the updated framework introduces more nuanced requirements for firms such as fund managers, investment advisers, custody providers, and other regulated entities that do not pose systemic risk. While the changes streamline certain obligations, they also set clearer expectations around capital adequacy, liquidity management, and internal risk assessment—particularly for firms handling client assets or digital instruments like fiat-referenced tokens.

Crucially, the revised PRU introduces recalibrated capital thresholds based on business activity and risk category. Category 3C and Category 4 firms, typically comprising asset managers, custodians, arrangers, and advisory firms, will now fall under new capital and liquidity obligations that reflect both the size and nature of their operations. Firms issuing fiat-referenced tokens, for example, face significantly higher minimum capital requirements under the updated rules.

The FSRA has also embedded liquidity safeguards, requiring applicable firms to maintain a buffer of unencumbered, high-quality liquid assets. These rules are designed to ensure that firms can meet liabilities as they fall due, even under stress scenarios.

At the same time, the amendments strengthen the regulator’s supervisory toolkit. The revised rules mandate internal assessments of capital adequacy and risk exposure (IRAP and ICAAP) for most domestic firms, depending on their regulatory category. These internal reviews will feed into the FSRA’s broader Supervisory Review and Evaluation Process (SREP), enabling the regulator to impose firm-specific capital requirements where warranted.

Taken together, the amendments reinforce the FSRA’s commitment to a risk-sensitive, forward-looking approach. This approach seeks to avoid regulatory overreach while safeguarding the integrity of ADGM’s financial ecosystem.

The updated Rulebook is now in effect. Firms operating in ADGM should assess the implications for their current Financial Services Permissions, capital position, and reporting obligations.

You can view the FSRA’s announcement and access the full amended Rulebook here:
ADGM FSRA announcement and Rulebook amendments

Need help understanding how the new PRU rules affect your firm?

Clarity works with regulated firms across ADGM to navigate supervisory change with confidence. Whether you need support understanding you capital resource requirements or preparing internal assessments (IRAP/ICAAP), our team is here to help.

Get in touch for a confidential discussion on how we can support your compliance and strategic planning.