Abu Dhabi: Abu Dhabi Global Market (ADGM) said it has published a consultation paper setting out its proposed regulatory framework for operators of Private Financing Platforms (PFPs). The aim is to bolster the growth and development of start-ups and small and medium sized enterprises in Abu Dhabi and MENA region, the financial centre said in a statement on Wednesday.
PFPs are online platforms that enable private enterprises to seek financing from private and institutional investors to launch and grow their businesses. The latest move from the ADGM follows the 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.
The FSRA is proposing a tailored, risk-proportionate regulatory framework that effectively addresses the risks posed by transactions facilitated through a PFP, according to ADGM.
The proposed features of the regulatory framework include the creation of a new regulated activity which permits both loan-based and investment-based PFP transactions.
Loans or investments may be held directly by lenders or investors or indirectly through a special purpose vehicle (SPV).
ADGM has invited the public and industry participants to submit their comments of the proposed framework and draft regulations and rules by August 16 to consultation@adgm.com
Abu Dhabi Global Market was established on October 21, 2015 to augment Abu Dhabi’s position as a global hub for business and finance. Hundreds of firms has set up their base in the international finance centre located on Al Maryah Island.
