The Abu Dhabi Global Market has made it easier for venture capital funds to operate in the financial free zone on Al Maryah Island by removing the need for them to put up cash to start these businesses.
The ADGM’s Financial Services Regulatory Authority, the zone’s regulator, said the move to simplify regulations for venture capital funds by not making them subject to any capital base requirements or expenditure-based capital took effect from May 15.
“In close consultation with industry players, the tailored regulatory framework for VC managers simplifies the applicable regulatory requirements while maintaining the necessary safeguards to ensure that they operate in a safe and sound manner,” ADGM said.
“As part of ADGM’s wider efforts in fostering a vibrant ecosystem for fintech firms and small and medium enterprises [SMEs], the framework is a further enhancement to ADGM’s funds regime that includes, among others, a comprehensive platform for real estate investment trusts as well as a boutique licensing framework for fund managers in the Mena region.”
ADGM is making increasing efforts to simplify regulations as it tries to attract more business. Last month, it announced lower capital requirements for managers of selected funds established in the free zone, bringing its regulations in line with other international jurisdictions.
The FRSA said that it was adopting an enhanced tier structure for base capital requirements (BCR), previously set at US$250,000. Under the new structure, the BCR requirement for CIF managers of Public Funds will be revised down to $150,000. Managers of exempt funds and qualified investor funds will have a BCR of $50,000.
mkassem@thenational.ae
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