Regulatory Alerts2023-12-13
Regulatory Framework for Private Financing Platforms and Multilateral Trading Facilities in Private Capital Markets
The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market has issued a risk-based authorization and ongoing compliance framework for Private Financing Platform (PFP) and Multilateral Trading Facility (MTF) operators facilitating private capital markets. The guidance mandates that operators satisfy strict threshold conditions, including fit-and-proper governance, adequate capital reserves, and robust risk management systems, while restricting market access primarily to Professional Clients with a maximum of 200 Retail Clients per exempt offer. Furthermore, authorized entities must implement comprehensive client asset safeguarding arrangements, maintain appropriate professional indemnity insurance, and enforce rigorous due diligence and conflict-of-interest protocols to protect lenders and investors.