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Abu Dhabi Global Market, ADGM, the International Financial Centre in Abu Dhabi, today published a consultation paper setting out its proposed regulatory framework for operators of Private Financing Platforms, PFPs, in ADGM.
The consultation paper follows positive feedback received from the industry in response to the March discussion paper issued by the Financial Services Regulatory Authority, FSRA, on the scope and form of a regulatory framework for PFPs, which has informed the development and refinement of the proposals set out in this consultation paper. This is part of FSRA’s ongoing initiatives to provide an inclusive regulatory platform that bolster the growth and development of start-ups and small- and medium-sized enterprises, SMEs, in Abu Dhabi and MENA region.
PFPs are online platforms that enable private enterprises to seek financing from private and institutional investors to launch and grow their businesses. PFPs that facilitate such business-to-business lending, equity crowdfunding, invoice financing and private placements can play an important role in improving access to alternative financing for private enterprises, start-ups and SMEs, which are key engines of economic growth and diversification in the UAE and wider region.
The FSRA is proposing a tailored, risk-proportionate regulatory framework that effectively addresses the risks posed by transactions facilitated through a PFP.
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