Consultation Paper No 2 of 2026 - Proposed Enhancements to Transfer Schemes

CONSULTATION PAPER
NO. 2 OF 2026
PROPOSED ENHANCEMENTS TO
TRANSFER SCHEMES
27 July 2026

Consultation Paper No. 2 of 2026 i
Table of Contents
Introduction....................................................................................................................... 2
Why we are issuing this consultation paper........................................................................ 2
Who should read this paper ............................................................................................... 2
How to provide comments.................................................................................................. 2
What happens next ............................................................................................................ 2
Comments to be addressed to: .......................................................................................... 2
Background....................................................................................................................... 3
Proposals .......................................................................................................................... 3
Refining the scope of mandatory court sanctioning ............................................................ 3
Optional court sanctioning.................................................................................................. 4
Retaining safeguards for affected parties in the absence of court sanctioning.................... 4
Conclusion........................................................................................................................ 6
Appendices ....................................................................................................................... 6

Consultation Paper No. 2 of 2026
Why we are issuing this consultation paper

1. The Financial Services Regulatory Authority (“FSRA”) of Abu Dhabi Global Market
   (“ADGM”) is issuing this consultation paper to invite public feedback on proposed enhancements to the framework governing the transfer of financial services businesses (“Transfer Schemes”) under Part 7 of the Financial Services and Markets Regulations (“FSMR”).
2. Capitalised terms contained in this consultation paper have the meanings attributed
   to them in the FSRA’s Glossary Rulebook (“GLO”), unless otherwise defined in this consultation paper. Who should read this paper
3. The proposals in this paper will be of interest to Authorised Persons and Recognised
   Bodies, potential applicants for a Financial Services Permission, and their respective professional advisors. How to provide comments
4. All comments should be made in writing and sent to the email address specified
   below, stating the consultation paper number in the subject line and identifying the organisation you represent in providing your comments. The FSRA reserves the right to publish, including on its website, any comments you provide, unless you expressly request otherwise at the time of making comments. The FSRA will give comments supported by reasoning and evidence more weight. What happens next
5. The deadline for providing comments on these proposals is 21 September 2026.
   When we receive your comments, we will consider whether any modifications are required to the proposed amendments described in this paper. The FSRA will then proceed to enact the proposed amendments. You should not act on the proposed amendments until the relevant regulations and rules are issued. Comments to be addressed to:
   Consultation Paper No. 2 of 2026
   Abu Dhabi Global Market
   ADGM Square
   Al Maryah Island
   PO Box 111999
   Abu Dhabi, UAE
   Email: fsra.consultation@adgm.com
   Introduction

Consultation Paper No. 2 of 2026

1. Part 7 of FSMR provides a statutory mechanism allowing for the transfer of all or part
   of the business of an Authorised Person or Recognised Body operating in or from ADGM to be transferred to another body via a Transfer Scheme. This requires all Transfer Schemes to be sanctioned by the Court in order for the transfer to have effect and applies to all business transfers other than transfers of Domestic Funds. Domestic Funds are subject to the requirements in Part 6 of the Fund Rulebook (“FUNDS”), pursuant to section 91 of FSMR, and this approach is unaffected by the proposals in this paper.
2. The court approval process allows for a business to be transferred without the need
   to obtain consent from all third parties, i.e. clients and other affected persons, with the court approval process serving to protect the interests of affected persons.
3. Procedural safeguards, as detailed in Part 7 of FSMR, provide the Court with an
   independent assessment of the potential impact of the proposed transfer on clients and other affected parties. This ensures that the interests of those parties are not adversely affected by the transfer of the business.
4. While the policy objective of client protection remains paramount, the current
   mechanism may impose disproportionate costs and cause undue delay, particularly in cases involving small-scale transfers. As these are likely to be the kinds of transfers effected by Authorised Persons and Recognised Bodies currently operating in and from ADGM, the requirement for mandatory court sanctioning in all circumstances therefore creates an unnecessary burden relative to the risks involved.
5. Accordingly, the FSRA is proposing enhancements to the Transfer Scheme regime to
   ensure that it remains proportionate to the primarily smaller and corporate nature of the client base of firms currently in its scope. Refining the scope of mandatory court sanctioning
6. The FSRA proposes narrowing the scope of mandatory court sanctioning to apply
   only to transfers of insurance business, apart from the following, two insurance business exclusions:
   (i) intragroup transfers of insurance business where the consent of all policyholders has been obtained; and Background Proposals

Consultation Paper No. 2 of 2026
(ii) transfers of reinsurance business where the consent of all policyholders, represented in this scenario by the ceding insurer, has been obtained.
7. This also reflects the position in the UK where certain limited types of insurance
business transfers are excluded from mandatory court sanctioning but may still choose to use the court process, but it is not compulsory. All other transfers of insurance business will remain subject to judicial oversight, including the production of a Scheme Report, which provides essential safeguards to ensure policyholder rights are not adversely affected.
8. For other transfers, including the two excluded scenarios above, the FSRA believes
that mandating court sanctioning for the transfer is disproportionate in the context of ADGM’s current market profile. Limiting mandatory court sanctioning to the transfer of insurance business would preserve essential protections while reducing undue burden for all other transfers. Optional court sanctioning
9. For non-insurance business transfers and the two exclusions noted above, the FSRA
notes that firms would still have the option of applying to the Court for an order sanctioning the Transfer Scheme, with the effect of the proposed amendments being that it would no longer be a mandatory requirement. The FSRA notes that the court approval process may still be considered appropriate or desirable in certain circumstances such as where:

• the Transfer Scheme would affect a large number of clients and other affected
  parties;
• the transfer of business is complex; or
• additional legal certainty is appropriate in the circumstances.
  Question 1: is it appropriate that mandatory court sanctioning be limited to transfers of insurance business only, excluding the two specific scenarios? Retaining safeguards for affected parties in the absence of court sanctioning

10. In order to retain safeguards in light of the proposed removal of the mandatory
    requirement for court sanctioning of the transfers of relevant businesses, the FSRA is proposing to introduce certain minimum requirements for transfers made outside the court sanctioned process, focussing on appropriate client engagement.

Consultation Paper No. 2 of 2026
11. Where a firm decides to proceed with a business transfer without court sanctioning,
under what is termed a “Modified Transfer Scheme” for the purposes of the proposals, the FSRA proposes to set out minimum requirements in a proposed new
Chapter 8A of the General Rulebook (“GEN”) for it to proceed.
12. Under a Modified Transfer Scheme, transfers would only be permitted where defined
conditions are met to safeguard client interests, as set out below, with the firm transferring the business being termed the “transferor”1 and that receiving it “the transferee”. (i) Prior notification to the FSRA: the transferor or the transferee would be required to notify the FSRA in writing before a Modified Transfer Scheme commences. This would enable the FSRA to seek further information, impose requirements, or object to the transfer where necessary, for example, if the transferee lacked adequate financial resources or was not appropriately licensed. (ii) Direct client notification: the transferor or the transferee would need to ensure that each client receives appropriate notice of the proposed Modified Transfer Scheme in a timely manner, including an explanation of the potential impact of the transfer on them. (iii) Public notice: public notice of the proposed transfer would need to be published in a timely manner, for example on the website of the transferor or the transferee.
13. All these requirements are considered as minimum safeguards in the case of a
Modified Transfer Scheme, with the FSRA proposing to impose them for the purposes of client protection. These obligations on the transferor would ensure that clients are adequately informed, protected, and given sufficient opportunity to exercise choice in relation to a proposed transfer.
14. An additional requirement would apply to Banks and the two insurance business
exclusions which, beyond notifying the FSRA of the intended transfer, would need to obtain a “no-objection” acknowledgement from the FSRA before proceeding. This reflects the greater complexity and prudential significance of banking and those insurance transfers relative to the others in the scope of Modified Transfer Schemes, and would enable the FSRA to assess any regulatory, financial stability or client protection implications before the transfer takes effect. Question 2: are these proposed requirements sufficient to safeguard clients and other affected parties, or should further requirements also be applied? 1 The more technical term “person concerned” is used in FSMR and the proposed GEN chapter

Consultation Paper No. 2 of 2026
15. The FSRA proposes refining the scope of mandatory court sanctioning for business
transfers to apply only to insurance business transfers, subject to the two excluded scenarios noted above, and introducing a proportionate regime under the proposed
Chapter 8A of GEN for all other transfers. This approach is intended to preserve client
protections while ensuring that regulatory requirements remain efficient, targeted and not unduly burdensome for those undertaking business transfers.
16. Those transfers within the scope of Modified Transfer Schemes will be able to avoid
the costs and lengthy process associated with a universal, mandatory court sanctioning process, while ensuring that the regime remains effective, transparent, and aligned with ADGM’s current market profile.
17. It should be noted that the proposed amendments to the GEN and Glossary (“GLO”)
Rulebooks and the Guidance and Policies Manual (“GPM”) are all additions, i.e. there are no amendments to existing requirements or provisions.

• Appendix 1: Proposed amendments to GEN
• Appendix 2: Proposed amendments to GLO
• Attachment 1: Proposed amendments to GPM
  Conclusion
  Appendices

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Appendix 1
GENERAL RULEBOOK (GEN)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 1
…
8A. MODIFIED TRANSFER SCHEMES
Guidance

1. Part 7 of FSMR governs Transfer Schemes. The Regulator may modify any provision
   of Part 7 of FSMR by Rules for the purpose of furthering one or more of its objectives, pursuant to section 91 of FSMR. This Chapter sets out Rules to modify the application of Part 7 of FSMR for those types of Transfer Schemes to which this
   Chapter applies.
2. The effect of the Rules in this Chapter, when read together with Part 7 of FSMR, is that:
   a. an Insurance Business Transfer Scheme cannot be effected as a Modified Transfer Scheme; b. a Transfer Scheme governed by Chapter 18 of FUNDS must continue to comply with the relevant provisions in FUNDS; and
   c. all other Transfer Schemes may proceed without a Court order sanctioning
   that Transfer Scheme as a Modified Transfer Scheme, if the requirements set out in the Rules in this Chapter are met.
3. The Rules in this Chapter do not require the person concerned or the transferee to
   pursue a Modified Transfer Scheme. An application for a Court order pursuant to
   Part 7 of FSMR remains an option. There may be circumstances where a transfer of
   business satisfies the requirements of a Modified Transfer Scheme but the person concerned considers it appropriate to use the Court approval process. For example, this may be appropriate when the Transfer Scheme is complex or potentially contentious, when the transfer involves a large customer base or when additional legal certainty may be beneficial. 8A.1 Application 8A.1.1 (1) The Rules in this Chapter are made pursuant to section 91 of FSMR and Part 7 of FSMR is to be read as modified in relation to Modified Transfer Schemes as set out in section 8A.3 in this Chapter. (2) This Chapter does not apply to:
   (a) an Insurance Business Transfer Scheme; and (b) a Transfer Scheme governed by Chapter 18 of FUNDS.

Appendix 1
8A.2 Meaning of certain terms
8A.2.1 In this Chapter, the terms “person concerned” and “transferee” have the meaning set out in section 85(2) of FSMR. 8A.2.2 For the purposes of this Chapter:
(a) A “Banking Business Transfer Scheme” is a Transfer Scheme where the whole or
part of the business to be transferred relates to an Authorised Person’s business of
Accepting Deposits; and
(b) An “Insurance Business Transfer Scheme” is a Transfer Scheme where the whole or part of the business to be transferred relates to an Authorised Person’s Insurance Business, except where either:
i) the business to be transferred under the scheme is the whole of the business of the person concerned; ii) all the policyholders are Controllers of the firm or of firms within the same Group as the firm which is the transferee; and iii) all the policyholders who will be affected by the transfer have consented to it in writing; or i) the business of the person concerned consists solely of effecting or carrying out of contracts of reinsurance; and ii) all the policyholders who will be affected by the transfer have consented to it in writing. and a confirmation of no-objection has been obtained from the Regulator in relation to the proposed transfer. Guidance

1. For clarity, an Insurance Business Transfer Scheme generally requires Court
   approval, but two types of insurance business transfers are excluded from the definition of Insurance Business Transfer Scheme. This means that, if the proposed Transfer Scheme falls within one of these two exemptions, then the transfer may proceed as a Modified Transfer Scheme, without requiring a Court order, if the requirements set out in the Rules in this Chapter are met. Where relevant for reinsurers, obtaining consent from policyholders refers to obtaining consent from the cedant insurers.

Appendix 1
8A.3 Modified Transfer Schemes
8A.3.1 A Transfer Scheme may be effected as a Modified Transfer Scheme without requiring a Court order pursuant to section 86 of FSMR where the requirements set out in Rules 8A.3.2 to 8A.3.3 have been satisfied. Requirement for advance notice to the Regulator 8A.3.2 (1) The person concerned or transferee must provide the Regulator with advance written notice of the proposed Transfer Scheme. (2) The written notice should include, at a minimum:
(a) the details of the proposed transfer;
(b) an assessment of the transferee’s position to receive the transferring business; (c) confirmation that the scheme meets the requirements for a Modified Transfer Scheme; and (d) confirmation of how the person concerned or transferee has satisfied or will satisfy the requirements set out at Rule 8A.3.3. (3) The Regulator may request any further information it deems necessary in connection with the proposed transfer. (4) If the Regulator is not satisfied with any aspects related to a proposed transfer following a notification in accordance with Rule 8A.3.2(1) to (3), the Regulator may:
(5) For a Banking Business Transfer Scheme and any Transfer Scheme that falls under the two Insurance Business Transfer Scheme exclusions, the person concerned or transferee may only proceed with the proposed Modified Transfer Scheme if it has received no-objection from the Regulator. (6) Where the Regulator proposes to exercise its powers pursuant to Rule 8A.3.2(4), the Regulator must, as soon as practicable and in any event within 60 days of the receipt of the notification and all required information about the proposed transfer, provide to the person concerned:
(a) a written notice stating:
(i) the Regulator's reasons for objecting to, or imposing conditions on, the proposed transfer; and

Appendix 1
(ii) any conditions subject to which the relevant person may proceed with the proposed transfer; and (b) an opportunity for the relevant person to make representations within 14 days of the receipt of such notice in (a) or such other longer period as agreed to by the Regulator. (7) The Regulator must, as soon as practicable after receiving representations or, if no representations are made, after the expiry of the period for making representations referred to in (6)(b), issue a final notice stating either that:
(a) the proposed transfer can proceed as a Modified Transfer Scheme, subject to conditions specified in the notice; or (b) the proposed objections and any conditions are withdrawn and the proposed transfer can proceed as a Modified Transfer Scheme. (8) If the Regulator decides to exercise its power under [8A.3.2(7)], the person concerned or transferee may refer the matter to the Appeals Panel for review. Guidance

1. When notifying the Regulator of the proposed transfer, it is expected that the details
   of the proposed transfer would include at a minimum the following information: an outline of the type and estimated size of the transferring business, the proposed transferor and transferee(s), the proposed timelines, the purpose of the transfer, details of any related transactions or wider restructuring plans, and any other relevant information regarding the proposed transfer.
2. When considering whether to exercise its powers under Rule 8A.3.2(4), the
   Regulator may have regard to a range of factors including, but not limited to, whether:
   a. the Transfer Scheme is complex or potentially contentious; b. the person concerned has a large customer base;
   c. the transferee will have the necessary authorisation to carry on the business
   that is being transferred; d. the transferee has sufficient financial resources to carry on the business; e. requiring the transfer to proceed as a Transfer Scheme pursuant to Part 7 of FSMR, rather than as a Modified Transfer Scheme, is necessary for the purpose of furthering one or more of the Regulator’s objectives;

Appendix 1
f. any other regulator has consented or objected to the proposed transfer; g. implementation of the proposed transfer will result in a contravention of any Regulation or Rule; and h. in all the circumstances, it is more appropriate and in the overall interests of clients affected by the proposed transfer for the person concerned or transferee to seek the Court’s approval to Part 7 of FSMR. Requirements for impact assessment and notice 8A.3.3 In relation to the proposed transfer, the person concerned or the transferee must:
(a) satisfy itself that the proposed transfer will not materially prejudice the interests of affected clients; (b) give public notice of the proposed transfer in a timely manner in advance; (c) give prior written notice to all clients affected by the proposed transfer, where such notice or notices must, at a minimum, provide:
i) adequate information on the proposed transfer and the likely impact of the transfer on each affected client; and ii) the options available to each affected client. Guidance

1. The person concerned should satisfy itself that the implementation of the
   proposed transfer will not lead to contravention of a Regulation or a Rule. Additionally, the person concerned and the transferee should satisfy themselves that the transfer will not result in any material prejudice to the interests of affected clients or other affected parties. Where required, the Regulator would expect that appropriate mitigations are in place to ensure that clients are not adversely affected by changes in terms or services
2. Notice to affected clients should be drafted in clear and easily understood wording.
   It should provide an overview of the potential impact of the transfer on them. Information to affected clients should include any anticipated changes to products, services, or terms and conditions resulting from the transfer. Where the changes are necessary, such changes should be clearly and prominently notified to clients.
3. Notice to affected clients should allow affected clients sufficient time to ask for
   further information, raise any objections, and where relevant allow opportunity for

Appendix 1
affected clients to transfer or terminate their business on terms that are not detrimental to the client. This would include receiving funds equivalent to their realisable entitlements or benefits at the time of the transfer, e.g. bank balances plus any interest or gains owing up to that point in time.
4. At a minimum, public notice should be put into the public domain via appropriate
channels best suited to bringing the transfer scheme to the attention of any persons who may be affected by it, and also published on the transferor’s website.
5. The onus is on the person concerned or the transferee to ensure that a transfer of
business under a Modified Transfer Scheme is legally effective. Undertaking a Modified Transfer Scheme may mean that it is not necessary to apply for a Court order to give effect to the transfer, but it does not of itself give legal effect to the transfer. …

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Appendix 2
Glossary Rulebook (GLO)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 2
…

1. INTRODUCTION
   1.1 Application
   1.1.1 This Rulebook ("GLO") applies to every Person to whom any of the Rulebooks apply.
   1.2 Defined Terms
   1.2.1 In the Rulebooks:
   (1) a word or phrase which is defined in GLO is a defined term and has the meaning given in GLO; and (2) a word or phrase which relates to a defined term must be interpreted accordingly. … Defined Terms Definitions Banking Business Transfer Scheme Has the meaning given in GEN 8A.2.2. Insurance Business Transfer Scheme Has the meaning given in GEN 8A.2.2. Modified Transfer Scheme Means a Transfer Scheme effected pursuant to Part 7 of FSMR as modified by Chapter 8A of GEN. Transfer Scheme Has the meaning given in section 258 of FSMR. …

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Attachment 1
Guidance & Policies Manual (GPM)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Attachment 1
…
3.6 Transfer Schemes
3.6.1 The Regulator expects the person concerned or the transferee proposing a Transfer
Scheme to notify the Regulator about the proposed transfer as soon as practicable, regardless of whether (i) the proposed Transfer Scheme will use the court sanctioned process outlined under Part 7 of FSMR; or (ii) the person concerned is proposing to comply with alternative arrangements outlined under GEN 8A.3.
3.6.2 Where the person concerned or the transferee is considering using the court-sanctioning
process, the Regulator will still need to be notified as soon as practicable before the transfer commences, as various steps will need to be taken, some of which involve the Regulator as detailed in Part 7 of FSMR, before a court may determine an application.
3.6.3 Where the person concerned or the transferee is considering using the alternative
process by following the requirements in GEN 8A.3, some types of business transfers will require a no-objection from the FSRA, as indicated in that Chapter.
3.6.4 Where a no-objection is to be obtained from the Regulator, the Regulator expects that the
person concerned or the transferee provide the Regulator with enough information that will enable the Regulator to consider factors noted in guidance 2 under GEN 8A.3.2. Although there is no prescribed form in which such information is to be provided to the Regulator, the person concerned or the transferee should consider any relevant industry and international best practices when providing information to the Regulator for similar purposes.
3.6.5 Before providing its no-objection, the Regulator will consider among other things,
whether, before the transfer scheme takes effect, the transferee will:
(a) have the authorisation required (if any) to enable the business which is to be transferred to be carried on in the place to which it is to be transferred; and (b) possess adequate financial resources to carry on the business concerned in accordance with the legislation applicable in the place to which it is to be transferred. …