Consultation Paper No. 6 of 2022 - Proposals for a Sustainable Finance Regulatory Framework

CONSULTATION PAPER
NO. 6 OF 2022
PROPOSALS FOR A
SUSTAINABLE FINANCE
REGULATORY FRAMEWORK
FOR ADGM
10 November 2022

Consultation Paper No. 6 of 2022
Table of Contents
Introduction 3
Why we are issuing this paper 3
Who should read this paper 4
How to provide comments 4
What happens next 4
Background 6
Our Substantive Proposals 7
A. ADGM Green Funds (“GFs”) 7
B. ADGM Climate Transition Funds (“CTFs”) 10
C. Discretionary Managed Portfolios (“DMPs”) 15
D. Green bonds and sukuks, and sustainability-linked bonds and sukuks 16 E. ESG disclosures 18 Conclusion 21 Annexes, appendices and attachments 21

Consultation Paper No. 6 of 2022
Why we are issuing this paper

1. The Financial Services Regulatory Authority (“FSRA”) and the Registration Authority
   (“RA”) of Abu Dhabi Global Market (“ADGM”) have jointly issued this Consultation Paper to seek views on their proposals for a regulatory framework for sustainable finance (the “Framework”). In this paper “ADGM” and “we” are generally used to refer to ADGM as a whole, although where appropriate for the context they are used to signify the FSRA or the RA as individual authorities.
2. Amendments are proposed to the RA’s Companies Regulations 2020 (“CR 2020”),
   the FSRA’s Financial Services and Markets Regulations (“FSMR”), and the Conduct of Business (“COBS”), Funds (“FUNDS”) and Markets (“MKT”) Rulebooks, as well as the FSRA Glossary (“GLO”). In addition, supplementary guidance will be issued to clarify aspects of the Framework.
3. Sustainable finance (“SusFin”) is a strategic priority for ADGM. In October 2021, the
   UAE announced its “Net Zero by 2050 Strategic Initiative” (“NZSI”) and ADGM has an important role to play in achieving this. This includes cultivating a vibrant ecosystem for SusFin in ADGM, becoming a hub where capital can be raised for investments seeking a positive environmental impact as well as financial returns. Such activity is commonly referred to as “financing green”, where “green” means environmentally sustainable, or meeting the needs of the present without compromising the ability of future generations to meet their needs1. Encouraging ADGM-incorporated entities to become greener, also known as “greening finance”, is the second dimension of our role cultivating a SusFin hub, and it is an area where ADGM is leading by example as the first international financial centre to become carbon-neutral2.
4. Advancing these outcomes further requires a robust regulatory framework. ADGM
   believes that to foster demand for products and services aimed at financing green it needs to ensure investor confidence that the risk of “greenwashing” has been appropriately mitigated. Greenwashing is the practice of misrepresenting sustainability-related practices or the sustainability-related features of investment products3. Our proposals on funds, discretionary managed portfolios, bonds and sukuks primarily seek to address greenwashing risk. In addition, the proposed environmental, social and governance (“ESG”) disclosures framework seeks to encourage commercial entities incorporated in ADGM to demonstrate their efforts to help further the NZSI by publishing ESG data. 1 As per the International Organization of Securities Commissions’ (“IOSCO”) Retail Investor Education in the Context of Sustainable Finance Markets and Products Final Report (FR10/22), August 2022, page 6 2 https://www.adgm.com/media/announcements/adgm-becomes-first-carbon-neutral-international-financial-centre-in￾the-world, 19 January 2022 3 As per footnote 1 Introduction

Consultation Paper No. 6 of 2022
5. This Consultation Paper outlines ADGM’s first iteration of a SusFin regulatory
framework. In line with the High-Level Statement 4 published with peer UAE authorities in November 2021, ADGM envisages that further iterations will include proposals to incorporate climate risk into risk management and governance processes. ADGM is also collaborating with other UAE authorities in the development of the UAE’s green taxonomy, and we will consider how to integrate this green taxonomy into our regulatory framework at a later stage, upon publication.
6. Capitalised terms which appear in this paper have the meanings attributed to them
in the FSRA’s Glossary, unless otherwise defined.
Who should read this paper
7. This Consultation Paper should be of particular interest to the following
stakeholders:

• All companies governed by the CR 2020, in relation to ESG disclosures.
• Fund Managers.
• Asset Managers.
• Entities considering issuing or offering green bonds or sukuks in ADGM.

8. We also welcome feedback from other stakeholders, whether based in ADGM or
   beyond, including signatories of the Abu Dhabi Sustainable Finance Declaration5, regulated firms in other jurisdictions with SusFin experience, think tanks and environmental advocacy groups. How to provide comments
9. All comments should be made in writing and sent to the physical or email address
   below. If sending your comments by email, please use the Consultation Paper number in the subject line. If relevant, please identify the organisation you represent when providing your comments. We reserve the right to publish any comments you provide, including on our website, unless you expressly request otherwise when submitting those comments. Comments supported by reasoning and evidence will be given more weight. What happens next
10. The deadline for providing comments on the Framework is 23 January 2023. After
    receiving your comments, we will consider whether any modifications are required to the proposals. We shall then proceed to enact the proposals in their final form. 4 https://www.adgm.com/media/announcements/uae-regulators-and-exchanges-issue-high-level-statement-on￾sustainable-finance 5 November 2021 5 https://www.adgm.com/initiatives/sustainable-finance/declaration, 15 January 2020

Consultation Paper No. 6 of 2022
11. You should not act on these proposals until final Regulations, Rules and guidance
are issued. We will issue a notice on our website when that happens. Comments to be addressed to:
Consultation Paper No. 6 of 2022
Abu Dhabi Global Market
ADGM Square
Al Maryah Island
PO Box 111999
Abu Dhabi, UAE
Email: consultation@adgm.com

Consultation Paper No. 6 of 2022

1. The UAE announced its NZSI in October 2021 to help advance the 2015 Paris
   agreement to limit global warming to 1.5 degrees Celsius6 (the “Paris Agreement”). The UAE has since been confirmed as hosting the 28th session of the UN Conference of the Parties in November 2023 (“COP 28”).
2. As an international financial centre within the UAE, ADGM believes that it has a
   pivotal role to play in furthering the UAE’s efforts to achieve the NZSI. Expenditure by public bodies to finance projects which will lower greenhouse gas (“GHG”) emissions (such as the USD $163 billion committed by the UAE to renewable energy by 20507) will need to be complemented by private sector initiatives that bridge the gap between the investment required to meet the Paris Agreement and current investment in this area (known as the “green financing gap”). Globally, the green financing gap has been estimated to be a minimum of USD $2.5 trillion8.
3. Financial services firms will play an essential role in closing the green financing gap,
   acting as intermediaries between issuers raising capital for green projects and investors seeking positive environmental (as well as financial) outcomes from their investments. ADGM aims to leverage its position as an international financial centre at the forefront of innovation in corporate and financial services regulation to foster SusFin activity within the jurisdiction and beyond.
4. In January 2019, ADGM published its Sustainable Finance Agenda9 setting out its
   four pillars for creating a centre of SusFin. Since then, ADGM has delivered various measures under each of these pillars. These include helping to establish the UAE Sustainable Finance Working Group, a group of UAE regulators, Federal ministries and financial exchanges created to help support the UAE’s SusFin agenda10. It also includes developing the ADGM Sustainable Finance Platform, an online solution for reviewing ESG data published by companies in the region11 and establishing the Abu Dhabi Sustainable Finance Forum12 as part of Abu Dhabi Sustainability Week, the region’s principal SusFin conference13.
5. ADGM was also part of the group of UAE authorities that developed and published
   the Guiding Principles on Sustainable Finance (the “SusFin Principles”) in January 2020 14 . The SusFin Principles include commitments to set minimum eligibility 6 https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris￾agreement#:~:text=The%20Paris%20Agreement%20is%20a,compared%20to%20pre%2Dindustrial%20levels. 7 https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments-strategies-and-plans/uae￾energy-strategy-2050, 13 September 2020 8 https://www.oliverwyman.com/our-expertise/insights/2017/dec/financing-climate-resilience.html 9 https://www.adgm.com/documents/fsra/sustainable-finance/adgm-abu-dhabi-sustainable-finance-agenda-16-jan￾2019-all.pdf, 16 January 2019 10 https://www.adgm.com/media/announcements/working-group-formed-to-advance-sustainable-finance-practices￾and-investments, 26 November 2019 11 https://adgm.arabsustainability.com/ 12 https://abudhabisustainabilityweek.com/en/ADSW/ADSW-Events/Abu-Dhabi-Sustainable-Finance-Forum 13 See ADGM’s Sustainable Finance website for more details on ADGM’s sustainable finance activities:
   www.adgm.com/initiatives/sustainable-finance 14 https://www.adgm.com/media/announcements/first-set-of-guiding-principles-on-sustainable-finance-published, 15 January 2020 Background

Consultation Paper No. 6 of 2022 requirements for green-labelled financial instruments (Principle 2) and promotion of ESG disclosures (Principle 3), both of which are addressed by the proposals in this paper. ADGM intends to address integration of ESG matters in risk management and governance (Principle 1) at a later stage. A. ADGM Green Funds (“GFs”)
6. Investment funds are important vehicles for channelling both retail and institutional
investment towards green assets, both within the UAE and globally. Funds that seek positive environmental outcomes have gained significant capital inflows globally and are also being established in ADGM. Outside ADGM, recent debates concerning the environmental credentials of assets held by supposedly green investment funds highlight the value of implementing a robust regulatory framework that will encourage investor confidence and investor protection in these investment vehicles.
7. Our proposals for GFs therefore seeks to deliver a framework where such funds are
investing in verifiably green assets. It will do so by setting the eligibility criteria for investable assets that removes, insofar as possible, subjectivity regarding whether an asset is indeed green.
8. ADGM also proposes the creation of an “ADGM Green Fund Designation” for funds
that choose voluntarily to meet ADGM’s minimum requirements for a GF. Funds with the designation will have the option of using the ADGM Green Fund logo on their marketing materials and communications to assist in raising investor awareness that they seek to follow our Framework. Funds that do not wish to obtain an ADGM Green Fund Designation will not be required to do so, whether or not they seek positive environmental outcomes. ADGM believes this flexibility is appropriate for the first iteration of the Framework, with the potential to revise the ‘opt-in’ nature of the Framework pending feedback received from this consultation. A.1 Eligibility criteria
9. ADGM believes that utilising a credible, specialist third party definition is the most
robust method of categorising assets as green, and therefore to mitigate the risk of greenwashing. ADGM believes that this will also help gain investor trust, and therefore increase the potential for GFs to attract investment. For these reasons, our Framework will limit eligible assets to those that align with a green taxonomy or are included in (or track) a Paris-Aligned Benchmark (“PAB”). We believe both green taxonomies and PABs to be robust and objective mechanisms for categorising assets as green. A.2 Green Taxonomies
10. ADGM proposes that a fund seeking to be designated as a GF may choose any
published, credible and independent green taxonomy as a reference against which to choose its green assets. ADGM has considered whether a single, specific green taxonomy should be required, however, we are mindful that green taxonomies tend Our Substantive Proposals

Consultation Paper No. 6 of 2022 to reflect the economic activities most prevalent in the jurisdiction(s) in which they are published. Accordingly, allowing flexibility as to which green taxonomy is suitable is (at this stage) considered to be a decision best taken by the fund manager in light of the strategy of the fund, which may be orientated towards a particular geographic focus. We are also cognisant that investors may have a preference for the type of green taxonomy utilised by the GF, leading us to conclude that we should at this stage not specify one particular green taxonomy in our Framework. We have therefore provided examples of green taxonomies we consider acceptable via guidance and have included the Association of Southeast Asian Nations’ (“ASEAN”) and European Union’s (“EU”) green taxonomies in this list. Once it is developed and finalised, we will also include the UAE green taxonomy in the list of examples.
11. ADGM recognises the challenge for investors in judging whether an asset within a
fund’s portfolio aligns with a green taxonomy. Green taxonomies can be complex and establishing whether an asset is consistent with economic activities described in them can require specialist skillsets. For this reason, ADGM proposes that a Public Fund must arrange for an independent third party attestor to periodically confirm that the fund’s portfolio assets are consistent with the definitions provided by the green taxonomy utilised by the fund. Qualified Investor Funds (“QIFs”) and Exempt Funds will be able to choose to self-attest adherence to a green taxonomy, as the sophisticated investors in these funds are better able to assess ongoing compliance with applicable green taxonomies. We will consider whether to maintain the ability to self-attest depending on feedback received from this paper. A.3 PABs
12. We recognise that green taxonomies are not the only source of a credible, specialist
and third party determination of whether an asset is green. Green-labelled benchmarks may also play an important role in assisting fund managers in selecting green assets. In developing our Framework, we considered whether to allow any benchmark labelled as green or sustainable to be used by a GF. At this stage, our view is that the most robust green benchmarks are those that correspond with the EU’s PAB framework15. This is because PABs are required to use a science-based methodology that will include only those securities issued by entities whose year￾on-year decarbonization measures advance efforts to meet the Paris-Agreement. In practice this means that securities included in a PAB will have been issued by organisations which reduce carbon emissions by 50% compared to their parent index, and by 7% year-on-year. Although PABs have only been recently established, they are available from major benchmark providers and there appears to be a sufficient diversity of PABs available across geographies and asset classes to justify restricting GFs to only invest in these benchmark types. However, we are also open to feedback from stakeholders regarding whether other benchmark types should be permitted by the Framework.
13. Unlike green taxonomy assets, ADGM does not propose third party attestation be
required for assets included in a PAB. This is because it is unambiguous whether a bond or equity is included in a PAB, limiting the added value a third party can provide. We also see value in permitting a potentially lower cost pathway to achieve 15 Regulation (EU) 2016/1011 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016R1011

Consultation Paper No. 6 of 2022
ADGM Green Fund Designation as a consequence of not having to arrange for and obtain third party attestation. This may reduce barriers to entry of our Framework and have the benefit of increasing the number of GFs established in ADGM and therefore available to investors. We are considering whether any additional controls should be in place to ensure that fund managers to do not deviate from investment in PAB assets, dependant on feedback on this topic.
14. A summary of the Framework for GFs is as follows:
a. An opt-in framework for funds that choose to seek an ADGM Green Fund Designation. b. To receive an ADGM Green Fund Designation, the fund must invest in:
i. Assets aligned with a green taxonomy; and/or
ii. Assets included in, or which track, a PAB.
c. In the case of Public Funds, the fund manager must arrange for annual
attestation by a specialist third party to confirm that assets held in accordance with green taxonomy are indeed consistent with the taxonomy. Exempt Funds and QIFs may self-attest. d. Assets included in, or tracking, a PAB will not need to be attested by a third party. e. A Public Fund will be required to apply for the ADGM Green Fund Designation. QIFs and Exempt Funds will be able to obtain designation by notification, an approach consistent with the FSRA’s approach for other types of specialist funds, such as Real Estate Investment Trusts (“REITs”). f. A fund in receipt of an ADGM Green Fund Designation will appear on the FSRA Register as a GF. Funds in receipt of the designation may use the ADGM Green Fund logo in marketing and communications. Eligibility Criteria Fund Type Attestation – minimum standards Designation Green Taxonomy Public At least annually by a third party specialist On application to the FSRA QIF, Exempt Self-attestation by fund manager or third party specialist, at least annually By notification to the FSRA PAB Public Self-attestation by fund manager or third party specialist, at least annually On application to the FSRA QIF, Exempt By notification to the FSRA

Consultation Paper No. 6 of 2022
Questions on the Framework for GFs:
Question 1: Do you agree that GFs should be required to ensure their portfolio assets align with an independent definition of green? Question 2: Do you agree with the proposal to consider Paris-Aligned Benchmarks equivalently green to assets aligned with a green taxonomy? Question 3: Should fund managers be permitted to use any green taxonomy, as long as it is published, independent and credible? Question 4: Do you have any further feedback on the Framework for ADGM GFs? B. ADGM Climate Transition Funds (“CTFs”)
15. Economies across the world are at an early stage of decarbonizing, and at this
time there is a limited quantity of investable assets that can be categorised as being green. This may limit the potential maximum size of any GF and reflects a challenge which is fundamental to the purpose of any SusFin framework. This challenge is that the transition to net zero GHG emissions depends on providing capital to non-green assets in order to finance efforts to help them decarbonize. The purpose of any SusFin regulatory framework must therefore include facilitating financing through this transitional period to include non-green assets, whilst protecting investors from greenwashing, rather than limiting a framework to permitting investment into just green assets.
16. Given this, ADGM believes that there is value in creating a second sustainable fund
type, the CTF. This category will apply for funds that invest in ‘greening’ assets, meaning assets which are not currently green, but have the potential to become so over time. ADGM believes that creating this fund type will encourage investment into these assets, helping to further the NZSI. We will also be one of the first movers in articulating a framework for such a fund type.
17. Whilst there will inevitably be some degree of overlap between what constitutes a
green asset versus a greening asset, there is value in delineating between the two fund types. Our Framework would effectively direct investors that wish to invest predominantly in already green assets towards a GF, and those that wish to invest in greening assets to a CTF. We believe this delineation will provide the requisite clarity to investors as to the intention of these funds and will therefore foster investor confidence, attracting investment to funds in receipt of an ADGM designation. B.1 Eligibility criteria
18. Determining what constitutes a greening asset is more challenging than for green
assets. There are fewer sources of third party definitions, as published taxonomies have tended to focus on defining a green asset, rather than a greening one. Another challenge is distinguishing assets that are greening (with evidence to demonstrate their path towards decarbonization) from brown assets, meaning those non-green assets that have limited or no prospect of greening. Such a distinction is essential to ensuring a framework for CTFs is credible.

Consultation Paper No. 6 of 2022
19. ADGM is proposing to provide minimum criteria for investable assets that can be
considered as meeting the definition of greening. As with GFs, the Framework does not place sole reliance on either internal processes of the fund manager nor disclosure as a means of reducing the risk of greenwashing. This is because we believe a more effective method to address this risk is by clearly stipulating the eligibility criteria for greening assets and, where appropriate, requiring a specialist third party to attest that the asset aligns with the specified criteria.
20. Under the Framework, a CTF will be required to invest in either:
a. assets aligned with a Climate Transition Taxonomy (“CTT”); b. shares and debt issued by entities that have both a published net zero target and a credible strategy towards achieving it;
c. green bonds and sustainability-linked bonds;
d. greening real estate assets and infrastructure; and e. assets featured in or that track a Climate Transition Benchmark (“CTB”). B.2 Assets aligned with a CTT
21. A CTT is an independent, specialist and third party publication that identifies
economic activities that are not currently green, but which have the potential to become so over time. CTTs are early in their development, and we have made our definition of a CTT flexible enough to encompass where greening assets are identified within a section of a green taxonomy. For example, our definition of a CTT will include those economic activities rated as ‘amber’ by the ASEAN Sustainable Finance Taxonomy, which uses a traffic light approach to determine whether economic activities are green, greening or brown. Equally, our definition of a CTT would also encompass the EU Extended Environmental Taxonomy (which also seeks to identify greening assets) once it is finalised.
22. As with GFs, it may be particularly challenging for an investor to ascertain whether
an asset in a portfolio is indeed aligned with a CTT. Therefore, we propose that Public Funds must arrange for a third party to attest applicable assets’ adherence to the chosen CTT. QIFs and Exempt Funds may undertake-self attestation, due to the more sophisticated nature of their investors.
23. Given CTTs are at an emergent stage of development with only a very limited
number of publications on which to rely upon, we have developed additional criteria to help identify greening assets. This will help make CTFs a viable investment vehicle independent of the pace at which CTTs are developed. Paragraphs 24 to 28 provide more detail on the rationale for including each of those criteria. B.3 Shares and debt issued by entities with credible net zero targets
24. ADGM sees merit in facilitating the channelling of capital towards issuers which are
on a path towards decarbonizing, as long as those plans are credible. In keeping with our general approach which considers specialist third party assessments the most objective method of mitigating greenwashing, we include guidance that only

Consultation Paper No. 6 of 2022 those entities whose net zero GHG emissions targets have been verified by the Science-Based Targets initiative (SBTi) should qualify for investment. We will consider making this guidance a Rule, dependent on feedback from stakeholders. B.4 Green and sustainability-linked bonds and sukuks
25. Green and sustainability-linked debt instruments are becoming an increasingly
important source of capital for entities to help finance their transition to become greener (see section D below). To address the risk of greenwashing, we propose that only those bonds and sukuks issued under third party frameworks and subject to external review may be eligible for investment. B.5 Greening real estate and infrastructure
26. The transition to net zero GHG emissions requires investment into existing real
estate and infrastructure in order to make such assets greener, rather than solely investing in new green projects. In order to address the risk that CTFs’ investment fails to improve the sustainability of the underlying assets we have included guidance that the applicable assets’ sustainability rating should be measured by a third party and disclosed by the fund manager. Dependent on feedback received from this paper, we will consider specifying which third party rating systems may be permitted and whether such measures should be included as a Rule or as guidance. B.6 Securities featured in a CTB
27. Similar to PABs, ADGM considered whether to allow CTFs to invest in securities
included in any benchmark that seeks to identify greening assets. However, at this stage our view is that the most robust benchmarks for selecting greening assets are those that correspond to the EU’s CTB framework, which were developed under the same EU initiative as PABs. Like PABs, CTBs are required to use a science-based methodology to include only greening assets undergoing significant efforts to decarbonize.
28. Similar to PABs, CTBs are relatively new to the market, however their footprint
appears to be growing and ADGM believes there is a sufficient number of CTBs to provide the necessary diversity of options to justify only allowing investment in them. We will consider allowing other benchmark types dependent on feedback received to this CP. B.7 Third party attestation
29. As with GFs, we have proposed that only those Public Funds investing in taxonomy￾aligned assets should be required to obtain third party attestation for the assets in
their portfolios. We believe that it will be significantly less ambiguous for investors to establish whether assets are consistent with the criteria we have proposed. We also believe that the role of third parties may be better directed to other areas, for example where we specify issuers’ net zero transition plans should be subject to the SBTi. To enhance measures to mitigate greenwashing risk, and in light of this reduced reliance on attestation, we have made CTFs subject to additional internal

Consultation Paper No. 6 of 2022 review requirements and also specified disclosure requirements in addition to those that apply to GFs. However, the role of third party review and attestation is an area of particular consideration and we may enhance the required role of third parties and self-attestation, either in Rules or guidance, pending feedback from this CP. B.8 ADGM designation
30. As with GFs, ADGM proposes that funds seeking to follow our proposed Framework
may obtain a ADGM Climate Transition Designation. Such a designation will enable a fund to be listed on the FSRA Register and, subject to licensing, be permitted to use an ADGM Climate Transition Fund logo in communications with clients.
31. A tabular summary of our CTF framework is as follows:
Eligibility Criteria Fund Type
Attestation – minimum standards
Designation
Assets aligned with a Climate Transition
Taxonomy
Public
By a third party specialist, at least annually On application to the FSRA QIF, Exempt Attestation by fund manager or third party specialist, at least annually By notification to the FSRA a. Shares and debt issued by entities that have both a published net zero target and a credible strategy towards achieving it b. Green bonds and sustainability￾linked bonds
c. Greening real estate assets and
infrastructure d. Assets either featured in or which track an EU Climate Transition Benchmark Public No attestation requirement, however, third party standards will play a key role in determining the eligibility of assets. CTFs are also subject to additional internal review by control functions. On application to the FSRA QIF, Exempt By notification to the FSRA
32. As one of the first movers in articulating a Framework for Climate Transition Funds
(or equivalent), we welcome feedback to help refine the Framework. In particular, feedback will help define: (a) which asset types CTFs should be permitted to invest in; (b) the criteria those assets must fulfil to be categorised as greening; and (c) what additional controls should be required of fund managers to ensure that greenwashing risk is mitigated appropriately.

Consultation Paper No. 6 of 2022
Questions on the Framework for CTFs:
Question 5: Do you agree with the proposal to create a CTF as a new category of sustainability-focused fund? Question 6: Do you agree with the criteria for investable assets of a CTF? What additions and/or amendments should be made? Question 7: What additional measures should we outline to reduce the risk of greenwashing in CTFs? For example, what requirements should ADGM require of funds investing in greening real estate assets to ensure the capital does indeed improve assets’ environmental sustainability? Question 8: Should ADGM require CTFs to publish key performance indicators to demonstrate the extent to which portfolio assets are greening? Question 9: Do you have any other feedback concerning the Framework for CTFs? Questions on common themes across both GFs and CTFs
33. A number of issues are shared across GFs and CTFs, such as the opt-in nature of
the Framework and differing attestation requirements for Public, Qualified Investor Funds and Exempt Funds. The below questions are in regarding those common themes. Questions on the Framework for GFs and CTFs:
Question 10: Do you agree the Framework should be voluntary and opt-in? Should the Framework be mandatory for any type of investment fund seeking positive environmental outcomes? Question 11: Do you agree with the proposal for an attestation regarding the green taxonomy or climate transition taxonomy-aligned assets in a portfolio? Should attestation be required more frequently than annually? What other measures should be required of the attestation? Question 12: Should QIFs and Exempt Funds be permitted to self-attest compliance with a green or climate transition taxonomy? Question 13: Should we permit GFs and CTFs to invest in benchmarks other than PABs or CTBs? If so, under what conditions should this investment be permitted? What role, if any, should third parties be required to play in ensuring assets are indeed included in or tracking a PAB or CTB? Question 14: Our draft rules currently require GFs and CTFs to invest in ‘predominantly’ green or climate transition assets. We have also drafted wording in our Supplementary Guidance on Sustainable Finance regarding the percentage of a GF’s or a CTF’s portfolio that should be invested in green or climate transition assets. Should such expectations be drafted as Rules? Question 15: What additions should be made to the proposed Supplementary Guidance on Sustainable Finance in order to assist stakeholders’ understanding of the Framework insofar as it relates to GFs and CTFs?

Consultation Paper No. 6 of 2022
Question 16: Should we broaden our scope to develop a framework for ESG-labelled funds, as well as for GFs and CTFs? If so, should independent, third party definitions of ESG be the core of such a framework? Question 17: Do you agree with the proposal to permit funds which have been provided a designation to use an ADGM Green Fund logo or ADGM Climate Transition Fund logo in their marketing? Will such logos add value for fund managers and investors? Question 18: Should a fee be payable for receipt of the ADGM Green Fund Designation or ADGM Climate Transition Designation?
C. Discretionary Managed Portfolios (“DMPs”)
34. ADGM has experienced significant growth in the number of investment managers
in the jurisdiction. Some of these investment managers are offering their clients green or sustainability-orientated DMPs, particularly in the ‘robo-advisory’ space. ADGM wishes to encourage this growth and considers that setting minimum standards for considering DMPs to be green or greening is a prerequisite to ensuring investor confidence in them and will help attract investor capital. C.1 Eligibility criteria
35. ADGM is proposing that the Framework for investment managers offering green or
climate transition DMPs to their clients should closely resemble that proposed for GFs and CTFs. However, it is proposed that that the Framework only apply to DMPs offered to retail clients, given professional clients are likely to have more sophistication and direction over the assets they wish to hold in their DMPs. We also propose that the Framework only apply to model portfolios (a sub-type of DMP) which is where we have seen the highest concentration of green-labelled DMPs. This is because model portfolios do not tend to be subject to the same direction from underlying clients concerning the assets held in them.
36. ADGM is aware that many green-labelled DMPs currently being offered in ADGM
often use ESG-labelled benchmarks as a reference from which to choose appropriate assets (or they track the benchmark itself). We expect this practice will continue. ADGM also considers that allowing investment in a PAB or CTB is a cost￾effective (but no less robust) option for investment managers when seeking to provide green or climate transition DMPs to their clients, compared to investing in assets aligned with a taxonomy and being required to obtain third party attestation. As with funds, we are open to feedback regarding whether any other benchmark types should be permitted within the Framework.
37. Unlike funds and bonds, DMPs are not standalone legal entities which can easily be
listed by a regulator on its public register. Our proposals therefore do not include listing those DMPs which have received a designation on the FSRA’s register. However, investment managers would be able to use the applicable logo to demonstrate to their clients that the DMP has received the designation. We are open to feedback regarding this approach.

Consultation Paper No. 6 of 2022
Questions on the Framework for ADGM Green Portfolios and ADGM Climate Transition Portfolios:
Question 19: Do you agree with an opt-in framework for retail DMPs which is substantively the same as that for GFs and CTFs? Question 20: Should the Framework only apply to DMPs which are provided to retail clients? Question 21: Do you believe the Framework should only apply to DMPs which are model portfolios, or should it be extended to all DMPs that wish to receive a designation? Question 22: Should DMPs in receipt of a designation be added to the FSRA Register? Question 23: Should any benchmarks other than PABs or CTBs be permitted for use by ADGM Green Portfolios or ADGM Climate Transition Funds? D. Green bonds and sukuks, and sustainability-linked bonds and sukuks
38. Debt issuance has an important role to play in funding public and private
organisations’ transition to net zero GHG emissions. A sizable market in green bonds already exists globally, and in 2021 green bonds to the value of USD $523 billion were issued16. The market is smaller in the Middle East and North Africa but growing rapidly, with issuance of sustainable bonds reaching USD $8 billion in 2021, an increase of 30 per cent on the 2020 total17.
39. ADGM is already a location of choice for organisations to incorporate entities and
issue debt on behalf of their parent or group entities. This is in part because of its facilitative environment for conducting commercial activity, underpinned by its comprehensive commercial legislation operating under the direct application of English common law. In order to cultivate ADGM as a centre of green debt, we have developed our proposed Framework, which we believe will help enhance investor confidence in green debt instruments that meet our minimum regulatory standards. D.1 Eligibility criteria
40. The Framework represents ADGM’s first step towards becoming a centre of green
bonds and sukuks by offering an ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation to debentures or sukuks that fulfil specific criteria targeted at avoiding greenwashing. The ADGM Green Bond Designation will apply to those debentures that are issued in order to fund specific green projects, whilst the ADGM Sustainability-Linked Bond Designation will apply to debt issued in order to fund more general improvements in an organisation’s sustainability. In providing a regulatory designation ADGM seeks to highlight the anti-greenwashing 16 https://www.climatebonds.net/2022/04/sustainable-debt-tops-1-trillion-record-breaking-2021-green-growth-75-new￾report 25 April 2022 17 https://www.icmagroup.org/events/PastEvents/dynamics-and-developments-in-the-international-sustainable-bond￾markets-implications-for-the-mena￾region/#:~:text=In%20the%20MENA%20region%2C%20issuance,30%25%20on%20the%202020%20total 23 March 2022

Consultation Paper No. 6 of 2022 standards to which the applicable instrument adheres and therefore increase the awareness of the issuer’s efforts to transition to net zero GHG emissions.
41. The key features of the Framework are:
a. An opt-in framework for issuers of green debentures and sustainability-linked debentures. b. An ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation will be provided if a debenture:
i. is offered in ADGM, although the issuer may be established anywhere;
ii. conforms to ICMA Green Bond or Sustainability-Linked Bond principles
(or equivalent framework); and
iii. is subject to a third party review and verification.
c. An issuer of an ADGM Green Debenture or ADGM Sustainability-Linked
Debenture in receipt of applicable designation may use the ADGM Green Bond logo or ADGM Sustainability-Linked Bond logo in communications regarding the applicable instrument. d. A debenture in receipt of a designation will be listed on the FSRA’s public register. e. The designation will need to be maintained by the issuer through the submission of the annual “post-issuance review” undertaken by an external reviewer. This would reduce greenwashing risk by demonstrating the issuer’s ongoing adherence to the applicable green principles. f. An identical framework will operate for sukuks, with an ADGM Green Sukuk Designation, ADGM Sustainability-Linked Sukuk Designation and equivalent logos.
42. ADGM envisages the designation will be most attractive to issuers from the UAE,
although it is open to any offer made in ADGM. The intention is that the designation will highlight the high standards to which those issuances adhere, encouraging investor confidence in green and sustainability-linked bonds and sukuks issued in accordance with the Framework. We believe it may also serve to enhance the reputation of the local green bond and sukuk market, thereby serving as a catalyst for more entities to issue green debt in ADGM and help create a thriving centre of green and sustainability-linked bonds.
43. In due course, we envisage an extension of the Framework to encompass transition
bonds and transition sukuks, provided that one or more standards equivalent to the ICMA Green Bond principles are developed and can be used as a basis against which to issue such debt instruments. To ADGM’s knowledge, no such standards have been developed. Stakeholder feedback on the prospect of extending the Framework to transition bonds and sukuks (and other types of green debt) is welcomed.

Consultation Paper No. 6 of 2022
44. We can also envisage adapting the Framework to further enhance anti￾greenwashing controls in future iterations of the Framework. For example, by linking
green debt to a green taxonomy, or setting minimum standards for second party opinions. However, enhancements to the proposals are likely to be suggested only following a post-implementation review of the Framework. Questions on the Framework for green bonds and sukuks, and sustainability￾linked bonds and sukuks:
Question 24: Do you agree with the proposal to provide a designation for green and sustainability-linked bonds or sukuks which follow the prescribed Framework? Question 25: Do you believe that the Framework is likely to help facilitate the issuance of green or sustainability-linked bonds and sukuks in ADGM? What additional regulatory measures should we seek to take to achieve this ambition? Question 26: What changes, if any, should ADGM make to its Framework regarding the types of green and sustainability-linked bonds and sukuk that may qualify for a designation? Question 27: Should we adjust our Framework to allow for transition bonds or other types of sustainable debt to receive a designation? Question 28: What additions should be made to the Supplementary Guidance for Sustainable Finance to enhance stakeholders’ understanding of the Framework insofar as it relates to the proposals in this section? E. ESG disclosures
45. ADGM believes that encouraging entities to disclose whether, and how, they are
contributing to reduce GHG emissions is an important step in advancing the NZSI. We also wish to encourage companies operating in the jurisdiction to follow our lead in becoming carbon-neutral. As such, ADGM has developed the Framework for ESG disclosures by certain companies governed by the CR 2020, with the following key features:
a. A ‘comply or explain’ Framework. Entities meeting a size threshold that do not wish to undertake ESG disclosures are not obliged to do so, but they must communicate to the RA that they will not comply and their reasons why. ADGM anticipates requiring mandatory disclosure in due course, however the appropriate timing for mandatory disclosure would be determined only following engagement with stakeholders and a post-implementation assessment of the Framework proposed in this paper. b. A minimum size threshold for ADGM-incorporated entities:
i. Fund and Asset Managers (authorised by the FSRA):
Assets Under Management: USD $6 billion or greater.

Consultation Paper No. 6 of 2022
ii. All other companies governed by the CR 2020 (including those
licensed by the RA as well as those authorised and regulated by the FSRA):
A turnover greater than USD $68 million or greater.
The asset and fund management size threshold reflects benchmarking of global peer regulatory standards. The turnover component reflects the existing financial threshold for a large company in the CR 2020. For simplicity, the other component of the CR 2020’s criteria for a large company (the number of employees) has been omitted. ADGM will consider the appropriateness of the size threshold in light of feedback received following this CP.
c. Entities that do not reach the size threshold being able to opt-in to the
Framework, with ADGM encouraging them to do so. d. Flexibility regarding the standard to which the ESG disclosures adhere (e.g. International Sustainability Standards Board (“ISSB”), Task Force on Climate￾Related Financial Disclosures (“TCFD”), or another standard). However, ESG disclosures must choose a global standard to adhere to. ADGM supports the ISSB initiative to create a single global standard for ESG disclosures, however we note that it is yet to be finalised. In addition, in the short term there may be good reasons why companies wish to observe a global standard that is not the ISSB, for example if group entities operating in other jurisdictions are subject to alternative disclosure standards. In the longer term, ADGM will consider the possibility of being more prescriptive as to the disclosure standard to be used. e. A number of other areas of flexibility, including:
i. the ability to rely on ESG disclosures undertaken by a group entity, but
only where they are undertaken on a consolidated basis for the group; and
ii. newly incorporated entities will not be required to undertake disclosures
until the third anniversary of their establishment in ADGM. This provision is to assist the ease of establishing entities in ADGM. f. The following types of entity will be excluded from the scope of the ESG disclosures aspects of the Framework, either by virtue of not being governed by the CR 2020 or by being expressly exempted from the Framework:
i. Foundations.
ii. Limited Liability Partnerships.
iii. Limited Partnerships.
iv. Restricted Scope Companies.
v. Investment Companies, i.e. investment funds themselves.

Consultation Paper No. 6 of 2022
vi. Branches of foreign companies.
vii. Publicly listed companies which already make equivalent disclosures in
accordance with listing requirements.
46. ADGM recently implemented an ESG disclosures Framework for listed, mining and
petroleum companies, via its published amendments to its capital markets regulatory framework 18 . We envisage consolidating the ESG disclosures Framework presented in this paper with those in the capital markets framework. However, this is likely to occur only following a post-implementation review of the Framework presented here.
47. ADGM believes its proposals represent the most comprehensive ESG disclosures
framework in the Middle East, Africa and South Asia (“MEASA”) region as it includes both public and private companies governed by the CR 2020, as well those which are listed or making an offer in ADGM will be encompassed by our regulatory framework. The Framework therefore represents a significant first step in encouraging observance of ESG disclosures standards by ADGM-based companies, and indeed a first step in helping ensure ADGM becomes a hub for companies which demonstrably play their part in contributing towards the NZSI. We are keen to hear from a wide variety of stakeholders regarding our first iteration of a framework for ESG disclosures.
48. Looking ahead, ADGM notes the development of net zero transition plans (“NZTPs”)
which outline an organisation’s forward-looking plans to transition to net zero GHG emissions. These may evolve into an important mechanism for helping achieve the NZSI. ADGM will monitor national and international developments regarding NZTPs and stand ready to facilitate their adoption where appropriate. Questions on the ESG disclosures Framework Question 29: Do you agree with scope of the Framework? Should there be any amendments to the size thresholds or application to company types in ADGM? Question 30: Do you agree with a separate threshold for FSRA-authorised fund and asset managers? Should they instead be captured by the turnover threshold for all other FSRA-authorised entities and companies governed by the CR 2020? Question 31: Will your company be captured by the Framework? If so, what are the major challenges you perceive in ensuring compliance? Should ADGM allow for any other flexibility to assist ADGM-incorporated entities’ compliance with the Framework? Question 32: Do you agree with ADGM’s proposal not to include a minimum employee threshold for companies in-scope of the Framework? Question 33: Do you agree with the proposal for a ‘comply or explain’ framework? Should ADGM instead consider implementing mandatory framework now, rather than in due course? 18 https://www.adgm.com/media/announcements/adgm-fsra-issues-enhancements-to-its-capital-markets-Framework￾including-environmental-instruments, 27 September 2022

Consultation Paper No. 6 of 2022
Question 34: Should ADGM allow companies to issue disclosures in accordance with any global standard or allow only one standard to be adhered to? Question 35: What additions should be made to the proposed Guidance for ESG Disclosures document accompanying this paper in order to assist stakeholders’ understanding of the Framework? Question 36: What ESG disclosures should in-scope fund managers be required to make regarding the investment funds they manage?
49. ADGM believes that these proposals, combined with its intention to facilitate the
creation of world’s first regulated carbon credit market, are significant moves to support the growth of a SusFin ecosystem in ADGM that channels capital towards green and greening assets, and that this endeavour will materially advance the local and global efforts to achieve the NZSI. Given regulatory frameworks for SusFin are at an early stage of development, both globally and in the MEASA region, ADGM highly values stakeholders’ feedback on the measures proposed in this paper to help refine the Framework. Question 37: Do you have any broader feedback on our Framework, not covered by the questions set out in sections A to E?

• Annex A: Proposed amendments to the Companies Regulations 2020
• Annex B: Proposed amendments to the Financial Services and Markets
  Regulations
• Appendix 1: Proposed amendments to COBS
• Appendix 2: Proposed amendments to FUNDS
• Appendix 3: Proposed amendments to MKT
• Appendix 4: Proposed amendments to GLO
• Attachment 1: Proposed Supplementary Guidance: “Environmental, Social and
  Governance Disclosures Guidance”
• Attachment 2: Proposed Supplementary Guidance: “Sustainable Finance
  Supplementary Guidance”
  Conclusion
  Annexes, appendices and attachments

Consultation Paper No. 6 of 2022
Primary focus Area Proposed Amendments
Companies
Regulations 2020
Environmental, Social and Governance disclosures Chapter 4A FSMR • ADGM Green Funds

• ADGM Climate Transition Funds
• ADGM Green Debentures
• ADGM Sustainability-Linked Debentures
• ADGM Green Sukuk
• ADGM Sustainability-Linked Sukuk
  Section 196
  COBS ADGM Green Portfolios COBS 3.8.1-3.8.9 ADGM Climate Transition Portfolios COBS 3.8.10-3.8.18 Both ADGM Green Portfolios and ADGM Climate Transition Portfolios COBS 3.8.19-3.8.24
  Schedule A: Substantive proposals outlined in this CP

Consultation Paper No. 6 of 2022
Primary focus Area Proposed Amendments
FUNDS ADGM Green Funds FUNDS 4.1.7
FUNDS 20.1-2.2.9
ADGM Climate Transition Funds FUNDS 4.1.8
FUNDS 20.1
FUNDS 20.3-20.3.11
Both ADGM Green Funds and ADGM Climate Transition Funds FUNDS 20.4 MKT Both ADGM Green Debentures and ADGM Sustainability-Linked Debentures MKT 4.14 Both ADGM Green Sukuk and ADGM Sustainability-Linked Sukuk MKT 4.15

Consultation Paper No. 6 of 2022
Supplementary guidance Area
Environmental, Social and
Governance Disclosures
Guidance
Draft Supplementary Guidance on ESG disclosures Sustainable Finance Supplementary Guidance Draft Supplementary Guidance on:

• ADGM Green Funds
• ADGM Climate Transition Funds
• ADGM Green Portfolios
• ADGM Climate Transition Portfolios
• ADGM Green Debentures
• ADGM Sustainability-Linked Debentures
• ADGM Green Sukuks
• ADGM Sustainability-Linked Sukuks
  Schedule B: Supplementary guidance

Consultation Paper No. 6 of 2022
Abu Dhabi Global Market ADGM
ADGM Climate Transition Fund CTF
ADGM Green Fund GF
Association of Southeast Asian Nations ASEAN Climate Transition Taxonomy CTT Companies Regulations 2020 CR 2020 Conduct of Business Rulebook COBS Discretionary Managed Portfolio DMP Environmental, social and governance ESG EU Climate Transition Benchmark CTB EU Paris-Aligned Benchmark PAB European Union EU Financial Services Regulatory Authority FSRA Funds Rulebook FUNDS FSRA Glossary GLO International Organization of Securities Commissions IOSCO International Sustainability Standards Board ISSB Markets Rulebook MKT Middle East, Africa and South Asia MEASA Net Zero by 2050 Strategic Initiative NZSI Net zero transition plan NZTP Real Estate Investment Trust REIT Registration Authority RA Sustainable finance SusFin Task Force on Climate-Related Financial Disclosures TCFD The 28th session of the Conference of the Parties COP 28 The Guiding Principles on Sustainable Finance SusFin Principles United Arab Emirates UAE
Schedule C: Glossary of abbreviated terms

---

Annex A - Proposed amendments to Companies Regulations 2020

Annex A
COMPANIES REGULATIONS (AMENDMENT No X) 2023

Annex A
COMPANIES REGULATIONS (AMENDMENT NO X) 2023 Regulations to amend the Companies Regulations 2020. Date of Enactment: [•] 2023 The Board of Directors of the Abu Dhabi Global Market, in exercise of its powers under Article 6(1) of Law No. 4 of 2013 concerning the Abu Dhabi Global Market issued by His Highness the Ruler of the Emirate of Abu Dhabi, hereby enacts the following Regulations–

1. Amendments to the Companies Regulations 2020
   …
   CHAPTER 4A
   ENVIRONMENTAL, SOCIAL AND GOVERNANCE DISCLOSURES General 399A. Scope of requirements in this chapter (1) A company shall be subject to the provisions of this Chapter where the conditions of subsection (2) are met in that year. (2) The conditions are met by a company in each financial year following the second anniversary of the issuance of its certificate of incorporation or continuance where:
   (a) a company has turnover of more than 68 million US dollars, or (b) a company is a financial institution which:
   (i) has a Financial Services Permission to carry on the Regulated Activity of:
   (A) Managing a Collective Investment Fund, or (B) Managing Assets, and (ii) has assets under management of more than 6 billion US dollars at any time during such financial year. (3) A company meeting the conditions in subsection (2) shall not be required to comply with this chapter for a successive financial year where it has ceased to meet the conditions of subsection 399A(2)(a) or 399A(2)(b), as applicable, for two or more consecutive financial years. (4) A company not meeting the conditions of subsection (2) may choose to comply with the provisions of this Chapter on a voluntary basis. 399B. Environmental, social and governance (“ESG”) disclosures (1) Subject to subsection (5), a company meeting the conditions specified in subsection 399A(2) must include the information required by this section in the company’s annual

Annex A
accounts, or in a separate document which accompanies the company’s annual accounts submitted to the Registrar. (2) The information required is – (a) where the company meets the condition under subsection 399A(2)(a), information necessary for an understanding of the company’s position in terms of development, strategy, performance and position by reference to an international framework relating to environmental, social and governance matters; or (b) where the company meets the conditions under subsection 399A(2)(b), information to the extent necessary for an understanding of the development, performance and position of the overall assets managed or administered by the Company relating to environmental, social and governance matters. (3) The information required by this section must specify the international framework relied upon. (4) The Board may make rules prescribing the ESG disclosures undertaken by a company, including the national or international frameworks that may be adopted for the purposes of providing the information required under subsection (2). (5) A company meeting the conditions specified in subsection 399A(2) may choose not to provide the information required under subsection (2), so long as the company submits to the Registrar a clear and reasoned written explanation for not doing so. 399C. Exemption for a company included in the group accounts of a larger group (1) Subject to (2), a company is exempt from the requirement to provide the information in section 399B(2) where it is a subsidiary undertaking and equivalent information is included in the consolidated group accounts or associated reports. (2) Exemption is conditional upon compliance with all the following conditions – (a) the consolidated group accounts or associated reports must be broadly equivalent to the ESG disclosure requirements in this Chapter; (b) the company must disclose in its individual annual accounts that it is exempt from the obligation to provide the information required under subsection 399B(2); and (c) the company must state in its individual annual accounts the name of the parent undertaking that draws up the consolidated group accounts or associated reports referred to in subsection (1) above. (3) If requested by the Registrar, the company must, within such time period as specified by the Registrar, deliver to the Registrar copies of the consolidated group accounts or associated reports referred to in subsection (1) above. 399D. Companies exempted from the provisions in this Chapter (1) A company which satisfies the conditions in subsection 399A(2) is exempt from the requirement to provide information under section 399B where it is:
(a) listed on an investment exchange and ESG disclosure is a requirement of the company to maintain its listing on that investment exchange; or

Annex A
(b) a Restricted Scope Company; or
(c) an Investment Company.
…
2. Short title, extent and commencement
(1) These Regulations may be cited as the Companies Regulations (Amendment No X) Regulations 2023. (2) These Regulations shall apply in the Abu Dhabi Global Market. (3) These Regulations come into force on the date of their publication.

---

Annex B - Proposed amendments to Financial Services and Markets Regulations

Annex B
FINANCIAL SERVICES AND MARKETS (AMENDMENT No X) REGULATIONS 2023

Annex B
FINANCIAL SERVICES AND MARKETS (AMENDMENT NO X) REGULATIONS 2023 Regulations to amend the Financial Services and Markets Regulations 2015. Date of Enactment: [•] 2023 The Board of Directors of the Abu Dhabi Global Market, in exercise of its powers under Article 6(1) of Law No. 4 of 2013 concerning the Abu Dhabi Global Market issued by His Highness the Ruler of the Emirate of Abu Dhabi, hereby enacts the following Regulations–

1. Amendments to the Financial Services and Markets Regulations 2015
   …
2. The record of Authorised Persons etc.
   (1) The Regulator must publish and maintain a record of every— (a) Security admitted to the Official List; (b) Authorised Person; (c) Public Fund; (d) ADGM Green Fund; (e) ADGM Climate Transition Fund; (f) ADGM Green Debenture; (g) ADGM Sustainability-Linked Debenture; (h) ADGM Green Sukuk; (i) ADGM Sustainability-Linked Sukuk; (j) Approved Prospectus; (k) Recognised Investment Exchange or Recognised Clearing House; (l) Remote Investment Exchange or Remote Clearing House; (m) individual to whom a Prohibition Order relates; (n) Trade Repository; (o) Remote Member; (p) Approved Person; (q) Passported Fund; (r) Specified Information; (s) Specified Benchmark; (t) Key Individual; and

Annex B
(u) any person falling within such other class (if any) as the Regulator may determine. (2) The record must include such information as the Regulator considers appropriate. (3) The Regulator shall make a reasonably current version of the records available for viewing by the public during the normal business hours of the Regulator. …
2. Short title, extent and commencement
(1) These Regulations may be cited as the Financial Services and Markets (Amendment No X) Regulations 2023. (2) These Regulations shall apply in the Abu Dhabi Global Market. (3) These Regulations come into force on the date of their publication.

---

Appendix 1 - Proposed amendments to COBS

Appendix 1
Conduct of Business Rules (COBS)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 1
3. CORE RULES – INVESTMENT BUSINESS, ACCEPTING DEPOSITS, PROVIDING
CREDIT AND PROVIDING TRUST SERVICES
…
ADGM Green Portfolios and ADGM Climate Transition Portfolios Application
3.8.1 The Rules in this section apply to an Authorised Person that acts as an Investment
Manager and enters into a Discretionary Portfolio Management Agreement with a Retail Client on the basis that the Model Portfolio being offered is an ADGM Green Portfolio or an ADGM Climate Transition Portfolio. Rules 3.8.2 to 3.8.9 are referred to as the “ADGM Green Portfolio Rules” and Rules 3.8.10 to 3.8.18 are referred to as the “ADGM Climate Transition Portfolio Rules”. Guidance

1. The Rules in this section do not apply to an Authorised Person that enters
   into a Discretionary Portfolio Management Agreement with a Professional Client. A Model Portfolio offered only to Professional Clients that follows an environmentally-conscious investment mandate may not be promoted as an ADGM Green Portfolio or ADGM Climate Transition Portfolio.
2. A Model Portfolio offered to a Retail Client may only be referred to as an
   ADGM Green Portfolio or ADGM Climate Transition Portfolio if it complies with the ADGM Green Portfolio Rules or the ADGM Climate Transition Portfolio Rules, as applicable, and if the Investment Manager has obtained the relevant approval from the Regulator for an ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation respectively.
3. A Model Portfolio that follows an environmentally-conscious investment
   mandate is not required to become an ADGM Green Portfolio or an ADGM Climate Transition Portfolio. However, only those Model Portfolios which have obtained the relevant designation may use such terminology in related documentation and promotional materials. ADGM Green Portfolios
   3.8.2 An ADGM Green Portfolio must meet the:
   (a) the Green Portfolio Investment Requirement; and (b) the Green Portfolio Attestation Requirement. The Green Portfolio Investment Requirement
   3.8.3 The Discretionary Portfolio Management Agreement of an ADGM Green Portfolio
   must restrict investments to predominantly Eligible Green Portfolio Assets and restrict investment in assets that are otherwise inconsistent with the overall green objectives of the mandate. This requirement is referred to in these Rules as the “Green Portfolio Investment Requirement”.

Appendix 1
Guidance
The Green Portfolio Investment Requirement shall not be breached if the Model Portfolio assets include cash or other liquid assets held temporarily pending investment or reinvestment.
3.8.4 An asset will be an Eligible Green Portfolio Asset if it is:
(a) considered environmentally sustainable or equivalent under an Acceptable Green Taxonomy, provided that no more than one Acceptable Green Taxonomy may be used by an ADGM Green Portfolio; or (b) included in or otherwise tracks an EU Paris Aligned Benchmark.
3.8.5 An Authorised Person which acts as an Investment Manager of an ADGM Green
Portfolio must keep records of the due diligence process it has undertaken to confirm that Eligible Green Portfolio Assets meet the criteria in Rule 3.8.4 at the time of acquisition and on an ongoing basis. Guidance

1. The Green Portfolio Investment Requirement may be met by assets
   comprising Eligible Green Portfolio Assets under Rule 3.8.4(a) or under Rule 3.8.4(b) or a combination of both.
2. Eligible Green Portfolio Assets may track or be included in one or more EU
   Paris Aligned Benchmarks. For example, they may track or include securities from multiple EU Paris Aligned Benchmarks.
3. The Regulator considers an Acceptable Green Taxonomy to be one which
   uses credible and independent accreditation standards published by a governmental body or a reputable industry association and made publicly available to determine which economic activities are environmentally sustainable. Examples of green taxonomies that will be considered Acceptable Green Taxonomies include:
   a. the EU Green Taxonomy; b. the ASEAN Taxonomy for Sustainable Finance; and
   c. the Common Principles for Climate Mitigation Finance Tracking.
   The Green Portfolio Attestation Requirement
   3.8.6 An Authorised Person acting as Investment Manager of an ADGM Green Portfolio
   must appoint a third party to attest to its compliance with the Green Portfolio Investment Requirement on an ongoing basis and at least annually. This requirement only applies to that portion of the Eligible Green Portfolio Assets that is invested in assets aligned with an Acceptable Green Taxonomy in accordance with Rule 3.8.4(a). This requirement is referred to as the “Green Portfolio Attestation Requirement”. Guidance
4. Under Rule 3.8.6, the Green Portfolio Attestation Requirement does not
   apply to Eligible Green Portfolio Assets which are included in or otherwise track an EU Paris Aligned Benchmark in accordance with Rule 3.8.4(b).

Appendix 1
2. An ADGM Green Portfolio investing in Eligible Green Portfolio Assets under both
Rules 3.8.4(a) and 3.8.4(b) is required to obtain attestation in relation to the assets invested in under Rule 3.8.4(a).
3.8.7 An Authorised Person must, prior to the appointment of a third party to provide an
attestation under Rule 3.8.6, take reasonable steps to ensure that the third party:
(a) has the required skills, resources and experience to provide the attestation; (b) is independent of, and not subject to, any conflict of interest with respect to the Authorised Person; and (c) has been provided with all documents, records and information necessary to give the attestation pursuant to Rule 3.8.8.
3.8.8 An Authorised Person acting as an Investment Manager of an ADGM Green
Portfolio must ensure that an attestation obtained for the purposes of Rule 3.8.6 includes the following statement within the attestation:
“We attest that, as regards the model portfolio titled [insert name] of [insert name of Authorised Person] (the Model Portfolio):
(i) the investment objectives of the Model Portfolio are consistent with the ADGM Green Portfolio Investment Requirement; and (ii) the Model Portfolio is invested in compliance with the ADGM Green Portfolio Investment Requirement.”
3.8.9 An Authorised Person acting as an Investment Manager of an ADGM Green
Portfolio must provide a copy of the attestation obtained for the purposes of Rule
3.8.6 to each Client with whom it has entered into a Discretionary Portfolio
Management Agreement in respect of such ADGM Green Portfolio at least on an annual basis and upon request by the Client. ADGM Climate Transition Portfolios
3.8.10 An ADGM Climate Transition Portfolio must meet the:
(a) the Climate Transition Portfolio Investment Requirement; and (b) the Climate Transition Portfolio Attestation Requirement. The Climate Transition Portfolio Investment Requirement
3.8.11 The Discretionary Portfolio Management Agreement of an ADGM Climate
Transition Portfolio must restrict investments to predominantly Eligible Climate Transition Portfolio Assets and restrict investment in assets that are otherwise inconsistent with the overall climate transition objectives of the mandate. This requirement is referred to in these Rules as the “Climate Transition Portfolio Investment Requirement”. Guidance The Climate Transition Portfolio Investment Requirement shall not be breached if the Model Portfolio assets include cash or other liquid assets held temporarily pending investment or reinvestment.
3.8.12 An asset is an Eligible Climate Transition Portfolio Asset if it is a:

Appendix 1
(a) Security aligned with an Acceptable Climate Transition Taxonomy, provided that no more than one Acceptable Climate Transition Taxonomy may be used by an ADGM Climate Transition Portfolio; (b) Security issued in accordance with the:
(i) ICMA Green Bond Principles;
(ii) ICMA Sustainability-Linked Bond Principles; or (iii) EU Green Bond Standard; and compliance with which is subject to third party assurance, independent verification or equivalent assessment; (c) Security included in or that otherwise tracks an EU Climate Transition Benchmark; (d) Share or Debenture issued or otherwise provided by an entity that in the reasonable opinion of the Authorised Person:
(i) has published credible net zero emissions targets and strategies; and (ii) is on course to meet its net zero emissions targets; or (e) Unit in an ADGM Climate Transition Fund. Guidance

1. The Climate Transition Portfolio Investment Requirement may be met by
   investment in any combination of Eligible Climate Transition Portfolio Assets meeting the criteria in one or more of Rules 3.8.12(a) to 3.8.12(e).
2. When considering whether assets meet the criteria in Rule 3.8.12, an
   Investment Manager should consider not only the investment in the immediate asset but any underlying assets. For example, where investing in Units, the Investment Manager should consider whether the underlying assets of the Fund would meet the Climate Transition Portfolio Investment Requirement.
   3.8.13 An Authorised Person must keep records of the due diligence process it has
   undertaken to confirm that an asset meets the criteria in Rule 3.8.12 at the time of acquisition and on an ongoing basis. The Climate Transition Portfolio Attestation Requirement
   3.8.14 An Authorised Person acting as Investment Manager of an ADGM Climate
   Transition Portfolio must appoint a third party to attest to its compliance with the ADGM Climate Transition Portfolio Investment Requirement on an ongoing basis and at least annually. This requirement only applies to Eligible Climate Transition Portfolio Assets that are aligned with an Acceptable Climate Transition Taxonomy in accordance with Rule 3.8.12(a), and not to Eligible Climate Transition Portfolio Assets under Rule 3.8.12(b) – (e). This is referred to as the “Climate Transition Fund Attestation Requirement”.
   3.8.15 An Authorised Person must, prior to the appointment of a third party to provide an
   attestation under Rule 3.8.14, take reasonable steps to ensure that the third party:

Appendix 1
(a) has the required skills, resources and experience to provide the attestation; (b) is independent of, and not subject to any conflict of interest with respect to the Authorised Person; and (c) has been provided with all documents, records and information necessary to give the attestation pursuant to Rule 3.8.16.
3.8.16 An Authorised Person must ensure that an attestation obtained for the purposes of
the Climate Transition Portfolio Attestation Requirement is addressed to and may be relied upon by the Authorised Person, and includes the following statement:
“We attest that, as regards the model portfolio titled [insert name] of [insert name of Authorised Person] (the Model Portfolio):
(i) the investment objectives of the model portfolio are consistent with the Climate Transition Portfolio Investment Requirement; and (ii) the model portfolio is invested in compliance with the ADGM Climate Transition Portfolio Investment Requirement.”
3.8.17 An Authorised Person acting as an Investment Manager of an ADGM Climate
Transition Portfolio must provide a copy of the attestation obtained for the purposes of Rule 3.8.14 to each Client with whom it has entered into a Discretionary Portfolio Management Agreement in respect of such ADGM Climate Transition Portfolio at least on an annual basis and upon request by the Client.
3.8.18 Prior to entering into a Discretionary Portfolio Management Agreement with a Retail
Client in relation to an ADGM Climate Transition Portfolio, an Authorised Person must:
(a) provide written disclosure to the Client how it assesses, measures and monitors compliance with the Climate Transition Portfolio Investment Requirement; and (b) at least annually, disclose the progress of the ADGM Climate Transition Portfolio in meeting its expressed climate transition objectives. Guidance

1. Where an ADGM Climate Transition Portfolio includes Shares or Debentures
   issued by an entity that has adopted a net-zero emission objective or strategy, the Authorised Person should consider whether the entity’s net zero target has been validated under the Science-Based Targets initiative (SBTi). Failure to obtain validation under the SBTi or equivalent framework should be considered as reducing the likelihood that the entity has a credible net zero target for the purpose of Rule 3.8.12(d).
2. When making a disclosure under Rule 3.8.18(b), the Authorised Person
   should specify those Shares and Debentures constituting Eligible Climate Transition Portfolio Assets pursuant to Rule 3.8.12(d). Application for an ADGM Green Portfolio Designation or an ADGM Climate Transition Portfolio Designation
   3.8.19 An Authorised Person must not promote a Model Portfolio as an ADGM Green
   Portfolio or an ADGM Climate Transition Portfolio unless it has applied for and

Appendix 1
received an ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation, as applicable, for that Model Portfolio from the Regulator.
3.8.20 An application for either designation referred to in Rule 3.8.19 must be
accompanied by:
(a) a copy of the proposed template Discretionary Portfolio Management Agreement; (b) a detailed description of the investment restrictions and objectives of the Model Portfolio, which demonstrates its compliance with the relevant requirements of the ADGM Green Portfolio Rules or the ADGM Climate Transition Portfolio Rules; and (c) a statement by the Authorised Person confirming that the investment objectives of the Model Portfolio, as stated in the relevant Discretionary Portfolio Management Agreement, comply with the ADGM Green Portfolio Investment Requirement or ADGM Climate Transition Portfolio Requirement, as applicable.
3.8.21 In assessing an application, the Regulator may:
(a) make enquiries that it considers appropriate, including enquiries independent of the Authorised Person; and (b) require the Authorised Person to provide further information.
3.8.22 In the event of a successful application, the Regulator will provide a Model Portfolio
with an ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation as applicable. Guidance The Regulator may refuse an application for an ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation if it has reasonable grounds to believe that the requirements of the ADGM Green Portfolio Rules or the ADGM Climate Transition Rules have not been met, or will not be met on an ongoing basis. Notification
3.8.23 An Authorised Person must advise the Regulator immediately if it becomes aware,
or has reasonable grounds to believe, that a material breach of the ADGM Green Portfolio Rules or the ADGM Climate Transition Portfolio Rules in relation to an ADGM Green Portfolio or an ADGM Climate Transition Portfolio may have occurred or may be about to occur. Cancellation of ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation
3.8.24 The Regulator may cancel an ADGM Green Portfolio Designation or an ADGM
Climate Transition Portfolio Designation by delivery of written notification to the Authorised Person acting as Investment Manager for such Model Portfolio:
(a) on its own initiative if the Regulator has reasonable grounds to believe that:
(i) the Model Portfolio is not in compliance with, or is unlikely to be in compliance with, the ADGM Green Portfolio Rules or the ADGM Climate Transition Portfolio Rules;

Appendix 1
(ii) the Authorised Person that is the Investment Manager has committed a contravention of FSMR or the Rules; or (iii) it is desirable to do so in order to further the Regulator’s objectives; or (b) on the application of the Authorised Person that is the Investment Manager of the relevant Model Portfolio where the application for cancellation has been made with the prior notification of Clients that have invested in the relevant Model Portfolio. Guidance The effect of a cancellation of an ADGM Green Portfolio Designation or an ADGM Climate Transition Portfolio Designation under this Rule is that the Model Portfolio no longer qualifies as an ADGM Green Portfolio or an ADGM Climate Transition Portfolio for the purposes of this section. Following such cancellation, the Authorised Person is not permitted to make representations to Clients or potential Clients that the Model Portfolio is an ADGM Green Portfolio or an ADGM Climate Transition Portfolio. …

---

Appendix 2 - Proposed amendments to FUNDS

Appendix 2
Funds Rules (FUNDS)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 2
3. FUND CRITERIA
…
3.4 The different types of Domestic Funds
This table illustrates the different Rules applicable to the three categories of Domestic Fund. The Fund Rules Chapters Public Fund Exempt Fund QIF …
Chapter 4: Specialist Classes of Funds 
Rules 20.4.3 and 20.4.4 do not apply

Rules 20.4.5 and 20.4.6 do not apply

Rules 20.4.5 and 20.4.6 do not apply
…
…
4. SPECIALIST CLASSES OF FUNDS
4.1 Specialist Funds
…
ADGM Green Fund
4.1.7 A Fund is an ADGM Green Fund only if it complies with the ADGM Green Fund
Rules, as set out in Part 8 of these Rules.
ADGM Climate Transition Fund
4.1.8 A Fund is an ADGM Climate Transition Fund only if it complies with the ADGM
Climate Transition Fund Rules, as set out in Part 8 of these Rules. Guidance

1. An ADGM Fund may only be referred to as an ADGM Green Fund or an
   ADGM Climate Transition Fund if it meets the criteria referred to in Rule 4.1.7 or Rule 4.1.8 and if the Fund Manager has made the required notifications to, or been granted the relevant approval by, the Regulator. Chapter 20 of this Rulebook contains detailed Rules concerning ADGM Green Funds and ADGM Climate Transition Funds.
2. A Fund that follows an environmentally-conscious investment strategy is not
   required to become an ADGM Green Fund or an ADGM Climate Transition Fund. However, only those Funds which meet all of the relevant criteria may use the terms “ADGM Green Fund” or “ADGM Climate Transition Fund” respectively (and any related marks or logos) in related documentation and promotional materials. …

Appendix 2
PART 8: ADGM GREEN FUNDS AND ADGM CLIMATE TRANSITION FUNDS
20. REQUIREMENTS SPECIFIC TO ADGM GREEN FUNDS AND ADGM CLIMATE
TRANSITION FUNDS
20.1 Application
20.1.1 This Chapter applies to a Fund Manager and, if appointed, a Trustee of a Domestic
Fund that is (or it is intended to be) an ADGM Green Fund or an ADGM Climate Transition Fund.
20.1.2 Only this Rule and Rules 20.1.1, 20.2.1 to 20.2.9, 20.3.1 to 20.3.11, 20.4.1 to 20.4.4,
20.4.7, 20.4.8 and 20.4.9 are applicable to Funds that are Exempt Funds or Qualified Investor Funds. Guidance

1. A Domestic Fund may only be referred to as an ADGM Green Fund or
   ADGM Climate Transition Fund if it complies with the ADGM Green Fund Rules or the ADGM Climate Transition Fund Rules, as applicable, and if the Fund Manager has obtained the relevant approval from the Regulator for an ADGM Green Fund Designation or ADGM Climate Transition Fund Designation, as applicable.
2. A Fund that has green or climate transition objectives is not required to
   become an ADGM Green Fund or an ADGM Climate Transition Fund.
   However, only those Domestic Funds which have obtained the relevant designation may use such terminology in related documentation and promotional materials.
   20.2 ADGM Green Funds
   20.2.1 An ADGM Green Fund must be a Domestic Fund that meets the:
   (a) Green Fund Investment Requirement; and
   (b) Green Fund Attestation Requirement.
   The Green Fund Investment Requirement
   20.2.2 A Fund Manager of an ADGM Green Fund must ensure that the investment
   restrictions of the Fund as stated in its Constitution and/or most recently published Prospectus require:
   (a) Fund Property to comprise predominantly Eligible Green Fund Property; and (b) a restriction on investment in Fund Property that is inconsistent with the overall green objectives of the Fund. This requirement is referred to as the “Green Fund Investment Requirement”. Guidance The Green Fund Investment Requirement shall not be breached if Fund Property includes cash or other liquid assets held temporarily pending investment or reinvestment, or for the purposes of managing redemptions or distributions.
   20.2.3 An asset will be Eligible Green Fund Property if it is:

Appendix 2
(a) considered environmentally sustainable or equivalent under an Acceptable Green Taxonomy, provided that no more than one Acceptable Green Taxonomy may be used by an ADGM Green Fund; or (b) included in or otherwise tracks an EU Paris Aligned Benchmark.
20.2.4 A Fund Manager of an ADGM Green Fund must keep records of the due diligence
process it has undertaken to assess whether Fund Property meets the Green Fund Investment Requirement at the time of acquisition and on an ongoing basis. Guidance

1. The Green Fund Investment Requirement may be met by assets comprising
   Eligible Green Fund Property under Rule 20.2.3(a) or under Rule 20.2.3(b) or a combination of both.
2. The Regulator considers an Acceptable Green Taxonomy to be one which
   uses credible and independent accreditation standards published by a governmental body or a reputable industry association and made publicly available to determine which economic activities are environmentally sustainable. Examples of green taxonomies that will be considered Acceptable Green Taxonomies include:
   a. the EU Green Taxonomy; b. the ASEAN Taxonomy for Sustainable Finance; and
   c. the Common Principles for Climate Mitigation Finance Tracking.
3. When considering whether assets meet the criteria under Rule 20.2.3, a
   Fund Manager should consider not only the investment in the immediate asset but any underlying assets. For example, where investing in Units, the Fund Manager should consider whether the underlying assets of the Fund would meet the Green Fund Investment Requirement.
4. Eligible Green Fund Property may track or be included in one or more EU
   Paris Aligned Benchmarks. For example, a Fund may track or include securities from multiple EU Paris Aligned Benchmarks. The Green Fund Attestation Requirement
   20.2.5 Subject to Rule 20.2.9, a Fund Manager of an ADGM Green Fund must appoint a
   third party to attest to its compliance with the ADGM Green Fund Investment Requirement on an ongoing basis and at least annually. This requirement only applies to that portion of the Eligible Green Fund Property that is invested in assets aligned with an Acceptable Green Taxonomy in accordance with Rule 20.2.3(a). This is referred to as the “Green Fund Attestation Requirement”.
   20.2.6 A Fund Manager must, prior to the appointment of a third party to provide an
   attestation under Rule 20.2.5, take reasonable steps to ensure that the third party:
   (a) has the required skills, resources and experience to provide the attestation; (b) is independent of, and not subject to any conflict of interest with, the Fund Manager, the investment advisor (if any) or the Trustee (if any) of the Fund; and

Appendix 2
(c) has been provided with all documents, records and information necessary to give the attestation pursuant to Rule 20.2.7. Guidance A Fund Manager of an ADGM Green Fund which is an Exempt Fund or a Qualified Investor Fund may provide the required attestation statement pursuant to Rule 20.2.9(a).
20.2.7 A Fund Manager must ensure that an attestation obtained for the purposes of the
Green Fund Attestation Requirement is addressed to and may be relied upon by the Fund, and includes the following statement:
“We attest that, as regards the [insert name of Fund] of [insert name of Fund Manager] (the Fund):
(i) the investment restrictions of the Fund, as stated in its Constitution and most recently published Prospectus, meet the requirements of the Green Fund Investment Requirement; and (ii) the Fund is invested in compliance with the ADGM Green Fund Investment Requirement.”
20.2.8 A Fund Manager of an ADGM Green Fund must include a copy of the attestation
statement described in Rule 20.2.7 in the ADGM Green Fund’s annual report. Alternative Attestation Requirement
20.2.9 A Fund Manager of an ADGM Green Fund is not required to appoint a third party to
attest to its compliance with the Green Fund Investment Requirement if:
(a) the Fund is an Exempt Fund or a Qualified Investor Fund, in which case the Fund Manager must provide the attestation itself; or (b) all Eligible Green Fund Assets held as Fund Property are included in or otherwise track an EU Paris Aligned Benchmark pursuant to Rule 20.2.3(b), in which event the attestation is not required. Guidance

1. Under Rule 20.2.9(b), the Green Fund Attestation Requirement does not
   apply to Eligible Green Fund Property that is included in or track an EU Paris Aligned Benchmark in accordance with Rule 20.2.3(b).
2. An ADGM Green Fund investing in Eligible Green Fund Assets under both
   Rule 20.2.3(a) and 20.2.3(b) is required to obtain attestation in relation to the assets meeting Rule 20.2.3(a).
   20.3 ADGM Climate Transition Funds
   20.3.1 An ADGM Climate Transition Fund must be a Domestic Fund that meets the:
   (a) Climate Transition Investment Requirement; and (b) Climate Transition Attestation Requirement.

Appendix 2
The Climate Transition Fund Investment Requirement
20.3.2 A Fund Manager of an ADGM Climate Transition Fund must ensure that the
investment restrictions of the Fund as stated in its Constitution and/or most recently published Prospectus require:
(a) Fund Property to comprise predominantly Eligible Climate Transition Fund Property; and (b) a restriction on investment in Fund Property that is inconsistent with the overall climate transition objectives of the Fund. This requirement is referred to as the “Climate Transition Fund Investment Requirement”. Guidance Climate Transition Fund Investment Requirement shall not be breached if Fund Property includes cash or other liquid assets held temporarily pending investment or reinvestment, or for the purposes of managing redemptions or distributions.
20.3.3 An asset is Eligible Climate Transition Fund Property if it is:
(a) aligned with an Acceptable Climate Transition Taxonomy or equivalent, provided that no more than one Acceptable Climate Transition Taxonomy may be used by an ADGM Climate Transition Fund; (b) a Security issued in accordance with the:
(i) ICMA Green Bond Principles;
(ii) ICMA Sustainability-Linked Bond Principles; or (iii) EU Green Bond Standard; and compliance with which is subject to third party assurance, independent verification or equivalent assessment; (c) a Security included in or that otherwise tracks an EU Climate Transition Benchmark; (d) a Share or Debenture issued or otherwise provided by an entity that in the reasonable opinion of the Fund Manager:
(i) has published a credible net zero emissions targets and strategies; and (ii) is on course to meet the net zero emissions targets; or (e) investment intended to facilitate the transition of real estate or infrastructure assets to become more environmentally sustainable, in the reasonable opinion of the Fund Manager. Guidance

1. The Climate Transition Fund Investment Requirement may be met by
   Eligible Climate Transition Property meeting the criteria in each of Rules 20.3.3(a) to 20.3.3(e).

Appendix 2
2. When considering whether assets meet the criteria in Rules 20.3.3(a) to
20.3.3(e), a Fund Manager should consider not only the investment in the immediate asset but any underlying assets. For example, where investing in Units, the Fund Manager should consider whether the underlying assets of the Fund would meet the Climate Transition Fund Investment Requirement.
3. Eligible Climate Transition Fund Property may track or be included in one or
more EU Climate Transition Benchmarks. For example, a Fund may track or include securities from multiple EU Climate Transition Benchmarks.
4. Where a Fund Manager invests in real estate or infrastructure to facilitate
their transition to become more sustainable pursuant to Rule 20.3.3(e), it should select third party metrics to help measure the assets’ progress in achieving that sustainability objective. For example, a ADGM Climate Transition Fund investing in real estate may measure its assets’ transition to become more sustainable using the Leadership in Energy and Environmental Design (LEED) rating system. Progress against those metrics should be disclosed to investors periodically, including in the annual report.
20.3.4 A Fund Manager of an ADGM Climate Transition Fund must keep records of the
due diligence process it has undertaken to assess whether an investment meets the Climate Transition Fund Investment Requirement at the time of acquisition and on an ongoing basis. The Climate Transition Fund Attestation Requirement
20.3.5 Subject to Rule 20.3.9, where an ADGM Climate Transition Fund invests in assets
aligned with an Acceptable Climate Transition Taxonomy as Eligible Climate Transition Fund Property pursuant to Rule 20.3.3(a), the Fund Manager must appoint a third party to attest to its compliance with the ADGM Climate Transition Fund Investment Requirement on an ongoing basis and at least annually in relation to that proportion of the Eligible Climate Transition Fund Property. This is referred to as the “Climate Transition Fund Attestation Requirement”. Guidance Under Rule 20.3.9, the Climate Transition Fund Attestation Requirement does not apply in relation to the Eligible Climate Transition Fund Property of the kind set out at Rule 20.3.3(b) to (e).
20.3.6 A Fund Manager must, prior to the appointment of a third party to provide an
attestation under Rule 20.3.5, take reasonable steps to ensure that the third party:
(a) has the required skills, resources and experience to provide the attestation; (b) is independent of, and not subject to any conflict of interest with, the Fund Manager, the investment advisor (if any) or the Trustee (if any) of the Fund; and (c) has been provided with all documents, records and information necessary to give the attestation pursuant to Rule 20.3.7. Guidance A Fund Manager of an ADGM Climate Transition Fund which is an Exempt Fund or a Qualified Investor Fund may provide the attestation required by Rule 20.3.5, pursuant to Rule 20.3.9.

Appendix 2
20.3.7 A Fund Manager must ensure that an attestation obtained for the purposes of the
Climate Transition Fund Attestation Requirement is addressed to and may be relied upon by the Fund, and includes the following statement:
“We attest that, as regards the [insert name of Fund] of [insert name of Fund Manager] (the Fund):
(i) the investment restrictions of the Fund, as stated in its Constitution and most recently published Prospectus, meet the requirements of the Climate Transition Fund Investment Requirement; and (ii) the Fund is invested in compliance with the ADGM Climate Transition Fund Investment Requirement.”
20.3.8 A Fund Manager of an ADGM Climate Transition Fund must include a copy of the
attestation statement described in Rule 20.3.7 in the ADGM Climate Transition Fund’s annual report. Ability of the Fund Manager to Provide Attestation Statement
20.3.9 A Fund Manager of an ADGM Climate Transition Fund is not required to appoint a
third party to attest to its compliance with the Climate Transition Fund Investment Requirement if the Fund is an Exempt Fund or a Qualified Investor Fund, in which case the Fund Manager must provide the attestation itself.
20.3.10 A Fund Manager of an ADGM Climate Transition Fund must:
(a) disclose in the Fund’s Prospectus how it assesses, measures and monitors how Fund Property will meet the criteria in Rules 20.3.3(a) to 20.3.3(e) and the climate transition investment objectives of the Fund; (b) ensure it assesses, measures and monitors how Fund Property meets the criteria in Rules 20.3.3(a) to 20.3.3(e) and the climate transition investment objectives of the Fund; and (c) disclose in its annual report the Fund Property’s progress over the applicable period in helping to achieve the climate transition objectives of the Fund. Guidance

1. A Fund Manager should include in its due diligence relevant to Rule
   20.3.3(d) whether the relevant entity’s net zero emissions target has been validated under the Science-Based Targets initiative (SBTi). Failure to obtain validation under the SBTi or equivalent framework should be considered as reducing the likelihood that the entity has a credible net zero target.
2. A Fund holding Shares and Debentures in accordance with Rules 20.3.3(d)
   should identify such Shares and Debentures in the Fund’s annual report.
3. A Fund Manager of an ADGM Climate Transition Fund which has invested
   in real estate or infrastructure assets should include in the Fund’s annual report:

Appendix 2
a. the third-party sustainability metrics against which the real estate or infrastructure property will be measured and will seek improvement against over time; b. the timeframe for improvement relied upon by the Fund when making the investment in such real estate and infrastructure assets; and
c. actual progress of the real estate or infrastructure assets against the
relevant sustainability metrics identified in the annual report. Systems and Controls
20.3.11 The internal audit or compliance function of a Fund Manager of a Public Fund which
is an ADGM Climate Transition Fund must, at least annually, review the Fund’s systems and controls to ensure ongoing compliance with the Climate Transition Fund Investment Requirement.
20.4 ADGM Green Fund Designation or ADGM Climate Transition Fund
Designation
20.4.1 A Fund Manager must not promote a Fund as an ADGM Green Fund or ADGM
Climate Transition Fund unless it has been granted an ADGM Green Fund Designation or ADGM Climate Transition Fund Designation, as applicable, for that Fund from the Regulator.
20.4.2 The notification or application required for the grant of the relevant designation must
be made in such form as the Regulator may prescribe.
20.4.3 A Qualified Investor Fund or Exempt Fund intending to market an ADGM Green und
or an ADGM Climate Transition Fund must:
(a) provide written notice using the prescribed form to the Regulator prior to commencing the marketing of such Fund; and (b) provide a certification by the Fund Manager that the Fund intends to comply with the ADGM Green Fund Rules or ADGM Climate Transition Fund Rules.
20.4.4 Upon receipt of written notification in accordance with Rule 20.4.3, the Regulator
will grant the Fund with an ADGM Green Fund Designation or ADGM Climate Transition Fund Designation and publish the name and details of the Fund on a list of ADGM Green Funds or ADGM Climate Transition Funds maintained by the Regulator on its website.
20.4.5 A Public Fund intending to operate as an ADGM Green Fund or an ADGM Climate
Transition Fund must, in addition to all other information to be provided in accordance with these Rules, provide the Regulator with:
(a) information on the investment restrictions, objectives and policy of the Fund relevant to the requirements of the ADGM Green Fund Rules or ADGM Climate Transition Funds Rules; (b) a statement by the Fund Manager to the effect that:
(i) the investment objectives of the Fund as stated in its Constitution and/or the Prospectus comply with the Green Fund Investment Requirement or Climate Transition Fund Investment Requirement prescribed under these Rules; and

Appendix 2
(ii) the Fund shall comply with the operational requirements of the ADGM Green Fund Rules or ADGM Climate Transition Fund Rules.
20.4.6 Upon granting a Fund with an ADGM Green Fund Designation or ADGM Climate
Transition Fund Designation as applicable where applied for under Rule 20.4.5, the Regulator will publish the name and details of the Fund on a list of ADGM Green Funds or ADGM Climate Transition Funds maintained by the Regulator on its website. Guidance

1. Once the Regulator has made a decision in relation to an application, it will
   without undue delay inform the Fund Manager in writing of its decision.
2. The Regulator may refuse to designate a Fund as an ADGM Green Fund or
   an ADGM Climate Transition Fund if it is not satisfied that the requirements of an ADGM Green Fund Rules or ADGM Climate Transition Fund Rules have been met or will be met on an ongoing basis. Notification
   20.4.7 A Fund Manager or, if appointed, the Trustee, of an ADGM Green Fund or an ADGM
   Climate Transition Fund must advise the Regulator immediately if it becomes aware, or has reasonable grounds to believe, that a material breach of the ADGM Green Fund Rules or the ADGM Climate Transition Funds Rules by an ADGM Green Fund or an ADGM Climate Transition Fund may have occurred or may be about to occur. Cancellation of ADGM Green Fund Designation or ADGM Climate Transition Fund Designation
   20.4.8 The Regulator may cancel an ADGM Green Fund Designation or an ADGM Climate
   Transition Fund Designation by delivery of written notification to the Fund Manager:
   (a) on its own initiative if the Regulator has reasonable grounds to believe that:
   (i) the Fund is not in compliance with, or is unlikely to be in compliance with, the ADGM Green Fund Rules or the ADGM Climate Transition Fund Rules; (ii) the Fund Manager or the Fund has contravened FSMR or the Rules; or (iii) it is desirable to do so in order to further one or more of the Regulator’s objectives; or (b) on the application of a Fund Manager where the application for cancellation has been made with the prior notification of Unitholders.
   20.4.9 Where the Regulator has cancelled, or proposes to cancel, an ADGM Green Fund
   Designation or a ADGM Climate Transition Fund Designation under Rule 20.4.8, it may, by written notice, direct the Fund Manager or, if appointed, the Trustee, to take such steps as the Regulator considers necessary or desirable to protect the interests of Unitholders in the Fund.

Appendix 2
Guidance
The effect of a cancellation of an ADGM Green Fund Designation or an ADGM Climate Transition Fund Designation under this Rule is that:
a. the Fund is no longer an ADGM Green Fund or an ADGM Climate Transition Fund for the purposes of these Rules. Neither the Fund Manager nor any other Person is permitted to make a representation that the Fund meets the requirements of an ADGM Green Fund or an ADGM Climate Transition Fund nor make an Offer of a Unit in the Fund or otherwise market the Fund using the relevant designation; and b. the Regulator will remove the Fund from the list of ADGM Green Funds or ADGM Climate Transition Funds maintained on the Regulator’s website. …

---

Appendix 3 - Proposed amendments to MKT

Appendix 3
Market Rules (MKT)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 3
4. OFFERS OF SECURITIES
…
4.14 ADGM Green Debentures and ADGM Sustainability-Linked Debentures
Application
4.14.1 This section sets out the requirements that apply to a Person making an Offer of
Securities of ADGM Green Debentures.
ADGM Green Debentures
4.14.2 An ADGM Green Debenture is a Security falling within paragraph 88 or 90 of
Schedule 1 of FSMR that:
(1) is the subject of an Offer of Securities; (2) seeks to comply with the Qualifying Green Debenture Principles in Rule 4.14.4; (3) is subject to external review in accordance with Rule 4.14.6; and (4) has been granted an ADGM Green Bond Designation by the Regulator in accordance with Rules 4.14.7 to 4.14.11. ADGM Sustainability-Linked Debentures
4.14.3 An ADGM Sustainability-Linked Debenture is a Security falling within paragraph
88 or 90 of Schedule 1 of FSMR that:
(1) is the subject of an Offer of Securities; (2) seeks to comply with the Qualifying Sustainability-Linked Debenture Principles in Rule 4.14.5; (3) is subject to external review in accordance with Rule 4.14.6; and (4) has been granted a ADGM Sustainability-Linked Bond Designation by the Regulator pursuant to Rules 4.14.7 to 4.4.11. Qualifying Green Debenture Principles
4.14.4 A Security will comply with Qualifying Green Debenture Principles if it adheres
to:
(1) the ICMA Green Bond Principles;
(2) the EU Green Bond Standard; or
(3) international principles equivalent to (1) or (2), which are approved by the Regulator. Qualifying Sustainability-Linked Debenture Principles
4.14.5 A Security will comply with Qualifying Green Sustainability-Linked Debenture
Principles if it adheres to:

Appendix 3
(1) the ICMA Sustainability-Linked Bond Principles; or (2) international principles equivalent to (1) which are approved by the Regulator. Guidance For the purposes of Rules 4.14.4 and 4.14.5, the Regulator may approve other green principles or sustainability-linked principles as Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Debenture Principles where:
a. the green principles or sustainability linked principles are issued by a governmental body, reputable industry association or reputable investment exchange; and b. the green principles or sustainability linked principles are published and freely available. External review
4.14.6 A Security will be considered by the Regulator to be subject to external review if
the Issuer appoints one or more external review providers to:
(1) assess through a pre-issuance external review the alignment of the Security with the requirements of the relevant Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Debenture Principles; and (2) verify on a regular basis post-issuance the Security’s performance against applicable criteria outlined in the Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Debenture Principles. Such verification must occur at least annually. Guidance

1. Prior to the appointment of an external review provider under Rule
   4.14.6 an Issuer should take reasonable steps to ensure that the
   external review provider:
   a. has the required skills, resources and experience to undertake the review; and b. is independent of, and not subject to, any conflict of interest with respect to the Issuer.
2. When arranging for an external review under Rule 4.14.6, an Issuer
   should take into consideration the ICMA Guidelines for Green, Social and Sustainability Debentures Reviews. Application for ADGM Green Bond Designation and ADGM Sustainability￾Linked Bond Designation
   4.14.7 A Security should not be promoted as an ADGM Green Debenture or an ADGM
   Sustainability-Linked Debenture by any Person unless the Issuer it has applied for and been granted an ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation, as applicable, for the Security from the Regulator.

Appendix 3
4.14.8 The application must be in such form as the Regulator may prescribe and must
be accompanied by:
(1) information on the Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Principles which the Issuer intends the Security to comply with; (2) certification by the Issuer to the effect that the Security aligns with the requirements of the Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Debenture Principles identified in (1); (3) information on the external review provider appointed to provide the pre￾issuance external review; and (4) a copy of the pre-issuance external review undertaken in accordance with Rule 4.14.6(1).
4.14.9 If, at any time between the filing of an application and the grant of an ADGM
Green Bond Designation or ADGM Sustainability-Linked Bond Designation, the Issuer becomes aware of any material change, error, or omission reasonably likely to be relevant to the application under consideration, it must inform the Regulator in writing of such change without delay.
4.14.10 In assessing an application, the Regulator may:
(1) make any enquiries which it considers appropriate, including enquiries independent of the Issuer; or (2) require the Issuer to provide further information.
4.14.11 Upon grant of an ADGM Green Bond Designation or ADGM Sustainability-Linked
Bond Designation, the Regulator will publish the name and details of the Security on a register maintained on its website. Guidance

1. Once the Regulator has made a decision in relation to an application, it
   will without undue delay inform the Issuer in writing of its decision.
2. The Regulator may refuse to grant an application for an ADGM Green
   Bond Designation or an ADGM Sustainability-Linked Bond Designation if it is not satisfied that the requirements of this section have been met or will be met on an ongoing basis. Annual submission
   4.14.12 In order to retain the ADGM Green Bond Designation or ADGM Sustainability￾Linked Bond Designation, an Issuer must submit a copy of the post-issuance
   external review conducted under Rule 4.14.6(2) to the Regulator as soon as reasonably practicable following completion of the review. Withdrawal of approval
   4.14.13 The Regulator may withdraw an ADGM Green Bond Designation or ADGM
   Sustainability-Linked Bond Designation by delivery of written notification to the

Appendix 3
Issuer:
(1) on its own initiative if it appears to the Regulator that:
(a) the Securities are not in compliance with, or unlikely to be in compliance with, the requirements of the Qualifying Green Debenture Principles or Qualifying Sustainability-Linked Debenture Principles specified in the application for approval under Rule 4.14.8; (b) the Issuer or any Person promoting the Securities has committed a contravention of FSMR or the Rules; or (c) it is desirable to do so in order to further one or more of the Regulator’s objectives; or (2) on the application of an Issuer where the application for withdrawal has been made with the prior notification of Security holders. Guidance The effect of a withdrawal under this Rule is that a Security is no longer provided an ADGM Green Debenture Designation or ADGM Sustainability-Linked Debenture Designation and will be removed from the FSRA register referenced at 4.14.11 above. Notification by Issuer
4.14.14 If, at any time after the granting of an ADGM Green Bond Designation or ADGM
Sustainability-Linked Bond Designation, the Issuer becomes aware the Securities are no longer in compliance with the requirements under Rules 4.14.2 or Rule 4.14.3, it must notify the Regulator in writing without delay. Guidance The Regulator may withdraw a ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation upon notification in accordance with Rule 4.14.14, pursuant to Rule 4.14.13.
4.15 ADGM Green Sukuk and ADGM Sustainability-Linked Sukuk
Application
4.15.1 The Rules and Guidance set out under section 4.14 will apply to Sukuk in the
same way as to Debentures, with all references to ‘Debenture’ in section 4.14 being read as ‘Sukuk’, and the references in Rules 4.14.1 to 4.14.3 to paragraph 88 or 90 of Schedule 1 of FSMR being read as a reference to paragraph 89 of
Schedule 1 of FSMR.
4.15.2 An ADGM Green Sukuk or ADGM Sustainability-Linked Sukuk may apply for,
and maintain, an ADGM Green Sukuk Designation or ADGM Sustainability￾Linked Sukuk Designation in the same way as for Debentures, with all references to ‘Debenture’ or ‘Bond’ in Rules 4.14.7 to 4.14.14 being read as ‘Sukuk’. …

---

Appendix 4 - Proposed amendments to GLO

Appendix 4
GLOSSARY (GLO)
*In this attachment underlining indicates new text and striking through indicates deleted text.

Appendix 4
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 Acceptable Climate Transition Taxonomy Means a classification system established to clarify those economic activities that:
a) are not currently zero or near-zero emitters of greenhouse gases, but b) assist the transition of an economy towards lower carbon emissions or becoming more environmentally sustainable; and uses credible and independent accreditation standards, is published by a governmental body or a reputable industry association and freely available. Acceptable Green Taxonomy Means a classification system that determines which economic activities are environmentally sustainable using credible and independent accreditation standards, that is published by a governmental body or a reputable industry association and freely available. ADGM Climate Transition Fund Means a Fund that has received an ADGM Climate Transition Fund Designation from the Regulator. ADGM Climate Transition Fund Designation Means the designation provided by the Regulator to an ADGM Climate Transition Fund pursuant to FUNDS Rules 20.4.4 or 20.4.6 ADGM Climate Transition Fund Rules Means FUNDS section 20.3. ADGM Climate Transition Portfolio Means a Model Portfolio that complies with the ADGM Climate Transition Portfolio Rules ADGM Climate Transition Portfolio Designation Means the designation provided by the Regulator to an ADGM Climate Transition Portfolio pursuant to COBS Rules 3.8.19 to 3.8.22.

Appendix 4
ADGM Climate
Transition Portfolio
Rules
Means COBS Rules 3.8.10-3.8.18.
ADGM Green
Debenture
Means a Debenture that meets the requirements of MKT Rule 4.14.2. ADGM Green Bond Designation Means the designation provided by the Regulator to an ADGM Green Debenture pursuant to MKT Rules 4.14.7 to 4.14.11. ADGM Green Fund Means a Fund that has received an ADGM Green Fund Designation from the Regulator. ADGM Green Fund Designation Means the designation provided by the Regulator to an ADGM Green Fund pursuant to either FUNDS Rules 20.4.4 or 20.4.6. ADGM Green Fund Rules Means FUNDS section 20.2. ADGM Green Portfolio Means a Model Portfolio that has received an ADGM Green Portfolio Designation from the Regulator. ADGM Green Portfolio Designation Means the designation provided by the Regulator to an ADGM Green Portfolio pursuant to COBS Rules 3.8.19 to 3.8.22. ADGM Green Portfolio Rules Means COBS Rules 3.8.2-3.8.9. ADGM Green Sukuk Means a Sukuk that meets the requirements of MKT Rule 4.14.2 when read together with MKT section 4.15. ADGM Green Sukuk Designation Means the designation provided by the Regulator to an ADGM Green Sukuk pursuant to MKT Rules 4.14.7 to 4.14.11 when read together with MKT section 4.15. ADGM Sustainability￾Linked Debenture Means a Debenture that meets the requirements of MKT Rule 4.14.3. ADGM Sustainability￾Linked Bond Designation Means the designation provided by the Regulator to an ADGM Sustainability-Linked Debenture pursuant to MKT Rules 4.14.7 to 4.14.11. ADGM Sustainability￾Linked Sukuk Means a Sukuk that meets the requirements of MKT Rule 4.14.3 when read together with MKT section 4.15. ADGM Sustainability￾Linked Sukuk Designation Means the designation provided by the Regulator to an ADGM Sustainability-Linked Sukuk pursuant to MKT Rules 4.14.7 to 4.14.11 when read together with MKT section 4.15.

Appendix 4
Climate Transition
Fund Attestation
Requirement
Has the meaning given to it in FUNDS 20.3.5.
Climate Transition
Fund Investment
Requirement
Has the meaning given to it in FUNDS Rule 20.3.2.
Climate Transition
Portfolio
Attestation
Requirement
Has the meaning given to it in COBS 3.8.14.
Climate Transition
Portfolio
Investment
Requirement
Has the meaning given to it in COBS 3.8.11.
Eligible Climate
Transition Portfolio
Asset
An Eligible Climate Transition Portfolio Asset is a an asset that meets the criteria in COBS Rule 3.8.12. Eligible Climate Transition Fund Property Eligible Climate Transition Property is an asset or assets that meet the criteria in FUNDS Rule 20.3.3. Eligible Green Fund Property Eligible Green Fund Property is an asset or assets that meet the criteria in FUNDS Rule 20.2.3. Eligible Green Portfolio Asset An Eligible Green Portfolio Asset is an asset that meets the criteria in COBS Rule 3.8.4. EU Climate Transition Benchmark Has the meaning given to it in Regulation (EU) 2016/1011 as may be amended from time to time. EU Green Bond Standard Means the proposed Regulation of the European Parliament and of the Council on European Green Bond. EU Paris Aligned Benchmark Has the meaning given to it in Regulation (EU) 2016/1011 as may be amended from time to time. Green Fund Attestation Requirement Has the meaning given to it in FUNDS Rule 20.2.5. Green Fund Investment Requirement Has the meaning given to it in FUNDS Rule 20.2.2 Green Portfolio Attestation Requirement Has the meaning given to it in COBS Rule 3.8.6. Green Portfolio Investment Requirement Has the meaning given to it in COBS Rule 3.8.3. ICMA Green Bond Principles Means the Green Bond Principles developed by the International Capital Market Association as may be amended from time to time.

Appendix 4
ICMA Guidelines for Green, Social and Sustainability Debentures Reviews Means the Guidelines for Green, Social and Sustainability Debentures Reviews developed by the International Capital Market Association as may be amended from time to time. ICMA Sustainability￾Linked Bond Principles Means the Sustainability-Linked Bond Principles developed by the International Capital Market Association as may be amended from time to time. Model Portfolio Means a portfolio of segregated holdings managed on a discretionary basis by an Investment Manager where all Clients in a particular profile or model receive the same portfolios and are traded and adjusted at the same time and in the same way, but with each Client having a separate Discretionary Portfolio Management Agreement in place with the relevant Investment Manager. Qualifying Green Debenture Principles Has the meaning given to it in MKT Rule 4.14.4. Qualifying Green Sukuk Principles Has the meaning given to it in MKT Rule 4.14.4 when read together with MKT section 4.15. Qualifying Sustainability￾Linked Debenture Principles Has the meaning given to it in MKT Rule 4.14.5. Qualifying Sustainability￾Linked Sukuk Principles Has the meaning given to it in MKT Rule 4.14.5 when read together with MKT section 4.15.

---

Attachment 1 - Proposed Supplementary Guidance: “Environmental, Social and Governance Disclosures Guidance”

Attachment 1
Environmental, Social and Governance Disclosures Guidance Registration Authority [•] 2023

Attachment 1
Table of contents
Definitions .......................................................................................................................................................... 3

1. Introduction.................................................................................................................................................... 4
2. Purpose of the ESG Disclosures Framework .......................................................................................... 4
3. Scope of the ESG Disclosures Framework.............................................................................................. 4
4. Time to Comply............................................................................................................................................. 5
5. Threshold Conditions................................................................................................................................... 5
6. ESG disclosures by companies - turnover threshold.............................................................................. 5
7. ESG disclosures by FSRA Fund and Asset Managers– AUM threshold ............................................ 5
8. Calculation of AUM by Asset Managers and Fund Managers .............................................................. 6
9. Group accounts ............................................................................................................................................ 6
10. Disclosures Standard ................................................................................................................................ 6
11. Review of ESG disclosures reporting process ...................................................................................... 6
12. Non-submission of ESG disclosures by in-scope companies............................................................. 6
13. Exemption for a company included in the group accounts of a larger group.................................... 7
    Disclaimer .......................................................................................................................................................... 8

Attachment 1
Definitions
Unless otherwise defined or the context otherwise requires, the terms contained in this Guidance have the same meanings as defined in the ADGM Companies Regulations 2020. In this Guidance, these terms have the following meaning:
Defined Term Meaning
ADGM Abu Dhabi Global Market.
AUM Means assets under management.
CR ADGM Companies Regulations 2020 as amended or updated from time to time. ESG Means environmental, social and governance. ESG Disclosures Framework Means the ESG disclosures framework set out under Sections 399A to 399D of the CR. FSRA Financial Services Regulatory Authority. Guidance Means this Environmental, Social and Governance Disclosures Guidance, unless the context requires otherwise. IAS Means ‘international accounting standards’ as that term is defined in the Companies Regulations (International Accounting Standards) Rules 2015. MKT Rulebook Means the Markets Rulebook issued by the FSRA, as may be amended from time to time. RA Registration Authority of the ADGM. Threshold Conditions The conditions in section 399A(2) of the CR that, if satisfied, require compliance with the ESG Disclosures Framework, as further detailed in section 5 below.

Attachment 1

1. Introduction
   Guidance overview and application
   This Guidance provides information about the obligations of ADGM limited companies concerning the ESG Disclosures Framework. Legal framework The relevant ADGM legislation regarding accounts for limited companies is the CR. The ADGM’s Regulations and Rules are available on the ADGM website by following this link (https://en.adgm.thomsonreuters.com/). Important information The RA cannot give technical or legal advice, it can only give general guidance. Questions concerning a specific company which arise following a review of this Guidance should be directed to appropriately skilled legal or accounting professionals.
2. Purpose of the ESG Disclosures Framework
   The RA’s ESG Disclosures Framework seeks to encourage practice by ADGM companies in disclosing applicable information on ESG factors in line with a globally recognised disclosures standard. The ESG Disclosures Framework can be applied by all ADGM entities on a voluntary basis. For in￾scope ADGM companies – being ADGM companies meeting certain Threshold Conditions - the RA has adopted a flexible ‘comply or explain’ approach to applicable disclosures. In doing so, ADGM wishes to foster an ecosystem of companies which seek to help play a part in meeting the UAE’s net zero emissions target. The RA intends to monitor whether the ‘comply or explain’ approach is effective in achieving the stated outcomes of the ESG Disclosures Framework. In the future, the RA may determine to impose a mandatory ESG disclosures framework for in-scope entities. Nothing in this Guidance should be interpreted as an assurance that the comply or explain approach will continue in the future.
3. Scope of the ESG Disclosures Framework
   Companies established in or continued into ADGM may be within the scope of the ESG Disclosures Framework. The following entities do not fall within the scope of the ESG Disclosures Framework, either by virtue of not being governed by the CR, or by being expressly exempted from the scope of the ESG Disclosures Framework. a. Foundations. b. Limited Liability Partnerships.
   c. General and Limited Partnerships.

Attachment 1 d. Restricted Scope Companies. e. Publicly listed companies that already make equivalent disclosures in accordance with listing requirements. For the avoidance of doubt, entities considered ‘Listed Entities’ or ‘Reporting Entities’ for the purposes of the FSRA’s MKT Rulebook remain subject to the ESG disclosures requirements set out therein. f. Investment Companies. g. Branches of foreign companies. However, the ESG Disclosures Framework can be applied by all ADGM entities on a voluntary basis.
4. Time to Comply
A company continued into or incorporated in ADGM will be required to comply with the ESG Disclosures Framework in the third year following its continuance or incorporation if it satisfies the Threshold Conditions. The three-year grace period applies from the date of incorporation or continuance as opposed to the date of amendment of the CR to include the ESG Disclosures Framework. This means an existing company may be required to comply in 2023.
5. Threshold Conditions
A company continued into or incorporated in ADGM will be required to comply with the ESG Disclosures Framework if it satisfies the Threshold Conditions, being either a ‘turnover’ threshold or an ‘AUM’ threshold. The turnover threshold is reached when a company achieves more than US$ 68 million turnover in a financial year. The AUM threshold only applies to FSRA licensed asset management companies which manage funds and/or portfolios with an aggregate value exceeding US$ 6 billion at any time during such financial year. The ESG Disclosures Framework does not apply to companies who no longer meet the threshold conditions for two consecutive years or more. Should the company subsequently meet the threshold conditions in a given year, the ESG Disclosures Framework will once again apply.
6. ESG disclosures by companies - turnover threshold
For the purposes of the CR, ‘turnover’ is defined as: the amounts derived from the provision of goods and services falling within the company’s ordinary activities, after deduction of:
a. trade discounts; b. value added tax; and
c. any other taxes based on the amounts so derived.
7. ESG disclosures by FSRA Fund and Asset Managers– AUM threshold
The ESG disclosures by FSRA Fund and Asset Managers are entity-level disclosures relating to how the FSRA company takes ESG-related risks and opportunities into account in managing or administering assets on behalf of clients.

Attachment 1
8. Calculation of AUM by Asset Managers and Fund Managers
AUM should be calculated in accordance with applicable IAS, or such other international accounting standards as may be applicable to such portfolio or fund.
9. Group accounts
A parent company that prepares group accounts should prepare ESG disclosures on the basis of the turnover of the group for the purposes of the company turnover threshold in Section 399A(2)(a) of the CR, and also with reference to provisions in Section 398 of the CR on preparation of group accounts by a parent company.
10. Disclosures Standard
A company which is required to prepare and submit ESG disclosures must prepare its submissions consistent with a standard which is globally recognised in the reasonable opinion of the company’s directors. The following is a non-exhaustive list of examples of globally recognised standards:

• Carbon Disclosure Project (CDP)
• Global Reporting Initiative (GRI)
• Higg Index
• International Sustainability Standards Board (ISSB)
• Task Force on ESG Financial Disclosures (TCFD)
• United Nations Sustainable Development Goals (UNSDG)
  A company may change the applicable disclosures standard at its discretion.

11. Review of ESG disclosures reporting process
    An internal review of the ESG disclosures reporting process should be undertaken periodically as part of the applicable company’s internal audit framework.
12. Non-submission of ESG disclosures by in-scope companies
    The ESG Disclosures Framework offers flexibility through its ‘comply or explain’ approach, which is designed to encourage companies to develop governance processes and practices that are the most suitable for their particular circumstances and to report them in a meaningful way. While the Registrar expects all in-scope companies to submit ESG disclosures, it is acknowledged that it may take time for such companies to develop necessary systems and controls. The Registrar encourages companies to embrace the flexibility offered by the ESG Disclosures Framework, consider their circumstances carefully and choose what is best for them, while clearly explaining any determination not to make ESG disclosures. When informing the Registrar of its decision not to submit ESG disclosures in accordance with subsection 399B(5) of the CR, a company should submit correspondence to monitoring@adgm.com, including a description of the reasons for its determination.

Attachment 1
13. Exemption for a company included in the group accounts of a larger group
A company may consider ESG disclosures made in applicable consolidated group accounts to satisfy subsection 399C(2)(a) of the CR where those disclosures are broadly equivalent to those required by the ESG Disclosures Framework.

Attachment 1
Disclaimer
Note: The Registration Authority cannot give technical or legal advice on a company’s accounts or the accounts obligations in individual company circumstances. The Registration Authority can only give general guidance. A company’s accounts are subject to legal requirements, and a company may wish to consider consulting a professional if technical or legal advice is required. This Guidance is a non-binding indicative guide and should be read together with the relevant legislation, in particular the CR and any other relevant regulations and enabling rules, which may change over time without notice. Information in this Guidance is not to be deemed, considered or relied upon as legal advice and should not be treated as a substitute for a specific advice concerning any individual situation. Any action taken upon the information provided in this Guidance is strictly at the company’s risk and the Registration Authority will not be liable for any losses and damages in connection with the use of or reliance on information provided in this Guidance. The Registration Authority makes no representations as to the accuracy, completeness, correctness or suitability of any information provided in this Guidance.

---

Attachment 2 - Proposed Supplementary Guidance: “Sustainable Finance Supplementary Guidance”

Attachment 2
Sustainable Finance Supplementary Guidance – ADGM Green Funds and ADGM Climate Transition Funds ADGM Green Portfolios and ADGM Climate Transition Portfolios ADGM Green Debentures and ADGM Sustainability-Linked Debentures ADGM Green Sukuks and ADGM Sustainability-Linked Sukuks

Attachment 2
Table of Contents

1. Introduction.........................................................................................................................3
2. Taxonomies.......................................................................................................................4
3. ADGM Green Funds and ADGM Climate Transition Funds ................................................5
4. ADGM Green Portfolios and ADGM Climate Transition Portfolios ......................................7
5. Guidance on ADGM Green Debentures and ADGM Sustainability-Linked Debentures.......9
6. Guidance on ADGM Green and Sustainability-Linked Sukuks............................................9
7. Use of ADGM logos..........................................................................................................10

Attachment 2

1. INTRODUCTION
   1.1 To outline the minimum criteria for environmental sustainability that applicable
   Securities and other financial services products may choose to seek adherence to, the Regulator has developed the following designations:
   a) ADGM Green Fund Designation; b) ADGM Climate Transition Fund Designation; c) ADGM Green Portfolio Designation; d) ADGM Climate Transition Portfolio Designation; e) ADGM Green Bond Designation; f) ADGM Sustainability-Linked Bond Designation; g) ADGM Green Sukuk Designation; and h) ADGM Sustainability-Linked Sukuk Designation, These designations are opt-in and issued by the Regulator upon application or notification. Upon receipt of a designation, an Authorised Person may use the relevant ADGM Green, Climate Transition, or Sustainability-Linked logos in relevant communications subject to receiving appropriate permission from the Regulator.
   1.2 This Supplementary Guidance provides:
   a) additional guidance on the Rules concerning ADGM Green Funds, ADGM Climate Transition Funds, ADGM Green Portfolios, ADGM Climate Transition Portfolios, ADGM Green Debentures, ADGM Sustainability-Linked Debentures, ADGM Green Sukuk and ADGM Sustainability-Linked Sukuk; and b) additional information regarding use of the ADGM Green, Climate Transition, or Sustainability-Linked logos that may be used by persons and products obtaining a designation listed in 1.1 above, subject to the written permission of the Regulator and compliance with this Guidance.

Attachment 2
2. TAXONOMIES
Acceptable Green Taxonomies
2.1 An ADGM Green Fund may choose any published, credible and independent green
taxonomy as a reference against which to choose its assets. As green taxonomies may tend to describe the economic activities most prevalent in the jurisdiction in which they are published, the Fund Manager is given flexibility to select the most suitable taxonomy considering the strategy of the Fund, rather than specifying one specific green taxonomy.
2.2 At present, the following taxonomies are considered ‘acceptable’ by the Regulator:
a) the EU Green Taxonomy; b) the ASEAN Sustainable Finance Taxonomy; c) the Common Principles for Climate Mitigation Finance Tracking.
2.3 In due course, other taxonomies, such as the UAE green taxonomy (once
published), may also be considered acceptable.
Acceptable Climate Transition Taxonomy
2.4 An ADGM Climate Transition Fund or ADGM Climate Transition Portfolio may
invest in assets aligned with an Acceptable Climate Transition Taxonomy.
2.5 An Acceptable Climate Transition Taxonomy is a classification system that identifies
economic activities assisting the transition of an economy towards lower carbon emissions or becoming more environmentally sustainable, but do not currently meet zero or near-zero emissions standards.
2.6 At the time of publication, a standalone Climate Transition Taxonomy has not been
published. However, it is understood that one or more may be forthcoming. Further, under the Rules, an Acceptable Climate Transition Taxonomy may be a standalone publication or be incorporated as a section (or sections) within an Acceptable Green Taxonomy, if it is clear that such economic activities assist a transition to net zero emissions.
2.7 An example of an Acceptable Climate Transition Taxonomy likely to be accepted by
the Regulator is the cohort of economic activities categorised as ‘amber’ (rather than ‘green’) by the ASEAN Sustainable Finance Taxonomy, such as a power company using natural gas plants with carbon capture and storage.

Attachment 2
3. ADGM GREEN FUNDS AND ADGM CLIMATE TRANSITION FUNDS
3.1 Part 8 of FUNDS sets out the detailed requirements that apply to managing a Fund
in compliance with the ADGM Green Fund Rules or the ADGM Climate Transition Fund Rules.
3.2 The Rules in Part 8 of FUNDS are in addition to:
a) the restrictions on the financial promotion of Units in a Fund in section 18 and
Schedule 2 of FSMR; and
b) the requirements that apply to the Offer of Units in Domestic Funds, including Prospectus disclosure by Authorised Persons under this Guidance.
3.3 COBS Rule 3.2.1 requires an Authorised Person to take reasonable steps to ensure
that any communication to a Person in relation to a Specified Investment is clear, fair and not misleading. Similarly, FUNDS Rule 9.3.1(1) requires the presentation of information in a Prospectus to be clear, fair and not misleading.
3.4 Without limiting any requirements under COBS or FUNDS, the Regulator has
developed the ADGM Green Fund Designation and the ADGM Climate Transition Fund Designation to indicate that a Fund pursuing Green or Climate Transition objectives does so in a manner that seeks to meet the Regulator’s requirements for an ADGM Green Fund or an ADGM Climate Transition Fund. This includes seeking to meet the relevant Green Fund Investment Requirement or ADGM Climate Transition Fund Investment Requirement and taking measures to mitigate the risk of “Greenwashing”, which, for the purposes of this Guidance, means the practice of misrepresenting sustainability-related practices or the sustainability-related features of investment products.
3.5 The purpose of the ADGM Green Fund Rules is to provide a framework for
investment in assets whose activities are already environmentally sustainable, therefore helping to local or global targets to reduce greenhouse gas emissions.
3.6 The purpose of the ADGM Climate Transition Fund Rules is to provide a framework
for investment in assets whose activities are not currently considered environmentally sustainable, in order to finance their transition to become so. This will also help to achieve local or global targets to reduce greenhouse gas emissions.
3.7 A Fund which meets the ADGM Green Fund Rules or ADGM Climate Transition
Fund Rules (as applicable) may apply to the Regulator for the ADGM Green Fund Designation or ADGM Climate Transition Fund Designation. An ADGM Green Fund Designation or ADGM Climate Transition Fund Designation reflects that a Fund seeks to adhere to the ADGM Green Fund Rules or ADGM Climate Transition Fund Rules (as applicable) and is listed on the Public Register as an ADGM Green Fund or ADGM Climate Transition Fund. It is not an assurance or guarantee from the Regulator that the Fund is in compliance with the applicable Rules. Funds granted an ADGM Green Fund Designation or ADGM Climate Transition Fund Designation may receive permission from the Regulator to use the ADGM Green Fund logo or ADGM Climate Transition Fund logo (as applicable).
3.8 Upon receipt of permission from the Regulator, the Fund Manager and Persons
engaged to promote the Fund may elect to use the ADGM Green Fund logo or the

Attachment 2
ADGM Climate Transition Fund logo in the Fund’s Prospectus and related promotional materials to indicate to prospective investors that the Fund seeks to meet the criteria of an ADGM Green Fund or an ADGM Climate Transition Fund.
3.9 As a result, the requirements set out in Part 8 of FUNDS will not apply to any
Person that does not seek to obtain ADGM Green Fund Designation or the ADGM Climate Transition Fund Designation for a Fund. Fund Managers are not required use the ADGM Green Fund logo or the ADGM Climate Transition Fund logo in any marketing materials or Prospectus of a Fund, but they may do so, should they wish, if they are granted permission by the Regulator.
3.10 However, the Regulator considers Greenwashing to present a material risk to one
or more of its objectives set out in section 1 of FSMR. Persons electing not to seek the ADGM Green Fund Designation or the ADGM Climate Transition Fund Designation, and otherwise indicating that a Fund is pursuing Green or Climate Transition objectives, should take measures to mitigate Greenwashing risk. Green Funds Investment Requirement
3.11 An ADGM Green Fund must invest predominantly in assets meeting the Green
Fund Investment Requirement. However, the Regulator is cognisant that it may take time to acquire Eligible Green Fund Property. At a minimum, the Regulator expects that assets meeting the Green Fund Investment Requirement will constitute:
a) 50.1% or more of the Fund’s assets within two years of the date on which an ADGM Green Fund Designation is granted; and b) 75% or more of Fund’s assets within five years of the date on which an ADGM Green Fund Designation is granted. Climate Transition Funds Investment Requirement
3.12 An ADGM Climate Transition Fund must invest in assets meeting the Climate
Transition Fund Investment Requirement. However, the Regulator is again cognisant of allowing flexibility on this issue to allow time to acquire Eligible Climate Transition Fund Property and manage subscriptions and redemptions. At a minimum, the Regulator expects that assets meeting the Climate Transition Fund Investment Requirement will constitute 75% or more of the Fund’s assets from the date on which an ADGM Climate Transition Fund Designation is granted. Fund Manager’s Report
3.13 FUNDS Rule 16.4.7 sets out the matters that must be included in the Fund Manager’s
report. This includes any information which would enable Unitholders to make an informed judgement on the development and results of activities of the Fund during the relevant period. For a Fund that is an ADGM Green Fund or an ADGM Climate Transition Fund, a Fund Manager must give particular regard to information explaining the development of the activities of the Fund during the period and the results of those activities in achieving the Fund’s ‘green’ or ‘climate transition’ objectives as at the end of the period, including by reference to compliance with the Green Fund Investment Requirement and the Climate Transition Fund Investment Requirement. The Fund Manager’s report should include additional information on the nature and composition of the Fund Property, including information on Fund Property considered to constitute Eligible Green Fund Property or Eligible Climate Transition Fund Property.

Attachment 2
4. ADGM GREEN PORTFOLIOS AND ADGM CLIMATE TRANSITION PORTFOLIOS
4.1 COBS Rule 3.2.1 requires an Authorised Person to take reasonable steps to ensure
that any communication to a Person in relation to a Regulated Activity is clear, fair and not misleading.
4.2 The purpose of the ADGM Green Portfolio Rules is to provide a framework for
investment in assets whose activities are already environmentally sustainable, therefore helping to achieve local or global targets to reduce greenhouse gas emissions. The ADGM Green Portfolio Rules only apply to a Model Portfolio offered to one or more Retail Clients.
4.3 The purpose of the ADGM Climate Transition Rules is to provide a framework for
investment in assets whose activities are not currently considered environmentally sustainable, in order to finance their transition to become so. This will also help to achieve local or global targets to reduce greenhouse gas emissions. The ADGM Climate Transition Portfolio Rules only apply to a Model Portfolio offered to one or more Retail Clients.
4.4 A Model Portfolio which meets the ADGM Green Portfolio Rules or ADGM Climate
Transition Portfolio Rules may apply to the Regulator for ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation (as applicable). An ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation reflects that a Model Portfolio seeks to adhere to the ADGM Green Portfolio Rules or ADGM Climate Transition Portfolio Rules respectively. It is not an assurance or guarantee from the Regulator that a Model Portfolio is in compliance with the applicable Rules. Model Portfolios granted an ADGM Green Portfolio Designation or ADGM Climate Transition Portfolio Designation may receive permission from the Regulator to use the ADGM Green Portfolio logo or ADGM Climate Transition Portfolio logo (as appropriate).
4.5 Authorised Persons may elect to use the ADGM Green Portfolio logo or the ADGM
Climate Transition Portfolio logo to indicate to actual or prospective Clients that the Model Portfolio meets the criteria of an ADGM Green Portfolio or an ADGM Climate Transition Portfolio.
4.6 Authorised Persons are not required under FSMR or these Rules to use the ADGM
Green Portfolio logo or the ADGM Climate Transition Portfolio logo in any marketing materials or Discretionary Portfolio Management Agreement relating to a Model Portfolio.
4.7 As a result, the requirements set out in COBS section 3.8 will not apply to any Person
that does not seek to obtain the ADGM Green Portfolio Designation or the ADGM Climate Transition Portfolio Designation.
4.8 However, the Regulator considers Greenwashing to present a material risk to one or
more of its objectives set out in section 1 of FSMR. Authorised Persons electing not to obtain the ADGM Green Portfolio Designation or the ADGM Climate Transition Portfolio Designation and that otherwise indicate that a Model Portfolio is pursuing green or climate transition objectives should establish and maintain systems and controls to mitigate Greenwashing risk.

Attachment 2
Green Portfolios Investment Requirement
4.9 An ADGM Green Portfolio must invest predominantly in assets meeting the Green
Portfolio Investment Requirement, that is assets which meet the definition of an Eligible Green Portfolio Asset in COBS Rule 3.8.4. At a minimum, the Regulator expects that assets meeting the Green Portfolio Investment Requirement will constitute 75% or more of the Model Portfolio’s assets. Climate Transition Portfolios Investment Requirements
4.10 An ADGM Climate Transition Portfolio must invest predominantly in assets meeting the
Climate Transition Portfolio Investment Requirement, that is assets which meet the definition of an Eligible Climate Transition Portfolio Asset in COBS Rule 3.8.12. However, the Regulator is again in favour of allowing flexibility on this issue. At a minimum, the Regulator expects that assets meeting the Climate Transition Portfolio Investment Requirement will constitute 75% or more of the Model Portfolio’s assets.

Attachment 2
5. GUIDANCE ON ADGM GREEN DEBENTURES AND ADGM SUSTAINABILITY￾LINKED DEBENTURES
5.1 MKT section 4.14 sets out the detailed requirements that apply to an ADGM Issuer
wishing to seek ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation for an applicable debenture.
5.2 The Rules in MKT section 4.14 are in addition to the requirements that apply to the
Offer of Securities in or from the ADGM, including Prospectus disclosure under MKT. No Security offered as an Exempt Offer under chapter 4 of MKT can be an ADGM Green Debenture or Sukuk, or ADGM Sustainability-Linked Debenture or Sukuk.
5.3 COBS Rule 3.2.1 requires an Authorised Person to take reasonable steps to ensure
that any communication to a Person in relation to a Specified Investment is clear, fair and not misleading. Similarly, chapter 4 of MKT sets out the requirements on a Person who makes or intends to make an Offer of Securities to the Public in or from the ADGM. Without limiting any requirements under COBS or MKT, the Regulator has developed the ADGM Green Bond Designation and the ADGM Sustainability-Linked Bond Designation to indicate that an ADGM Issuer is issuing a Debenture in accordance with Qualifying Green Principles or Qualifying Sustainability-Linked Principles.
5.4 This section only applies to those Persons electing to apply for the ADGM Green Bond
Designation or the ADGM Sustainability-Linked Bond Designation. Such Persons may elect to use the ADGM Green Bond logo or the ADGM Sustainability-Linked Bond logo to indicate to that the applicable Security has the ADGM Green Bond Designation or the ADGM Sustainability-Linked Bond Designation.
5.5 Persons are not required under FSMR or applicable Rules to obtain an ADGM Green
Bond Designation or ADGM Sustainability-Linked Bond Designation, or use the ADGM Green Bond logo or ADGM Sustainability-Linked Bond logo, in any marketing materials, Prospectus or other communications relating to Securities. As a result, the requirements set out in this section will not apply to any Person that elects not to obtain an ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation, or does not wish to use the ADGM Green Bond logo or ADGM Sustainability Linked-Bond logo in the marketing materials, Prospectus or other communications relating to relevant Securities.
5.6 However, the Regulator considers Greenwashing to present a material risk to one or
more of its objectives set out in section 1 of FSMR. Persons electing not to obtain an ADGM Green Bond Designation or ADGM Sustainability-Linked Bond Designation and otherwise indicating that the issuance of Securities is pursuing green or sustainability￾linked objectives should establish and maintain systems and controls to mitigate Greenwashing risk.
6. GUIDANCE ON ADGM GREEN AND SUSTAINABILITY-LINKED SUKUKS
6.1 The Guidance on ADGM Green Debentures and ADGM Sustainability-Linked
Debentures apply to Sukuks in the same way as to Debentures, with all references to ‘Debenture’ being read as ‘Sukuk’.
6.2 An ADGM Green Sukuk or ADGM Sustainability-Linked Sukuk may also apply for, and
maintain, an ADGM Green Sukuk Designation or ADGM Sustainability-Linked Sukuk Designation in the same way as for Debentures. Accordingly, the Guidance applies in the same way with all references to ‘Debenture’ or ‘Bond’ being read as ‘Sukuk’.

Attachment 2
7. USE OF ADGM LOGOS
7.1 Upon receipt of an:
a) ADGM Green Fund Designation; b) ADGM Climate Transition Fund Designation; c) ADGM Green Portfolio Designation; d) ADGM Climate Transition Portfolio Designation; e) ADGM Green Bond Designation; f) ADGM Sustainability-Linked Bond Designation; g) ADGM Green Sukuk Designation; or h) ADGM Sustainability-Linked Sukuk Designation, an Authorised Person may choose to seek to use a specific ADGM logo corresponding to the designation received (an “ADGM logo”).
7.2 The use of an ADGM logo is subject to the written consent of the Regulator, the
requirements set out in this Guidance and any other conditions for use required by the Regulator. For the avoidance of doubt, the Regulator granting its permission to use an ADGM logo does not indicate:
a) endorsement of an Authorised Person by the Regulator; b) an assurance or guarantee by the Regulator that the product or service is compliant with or will be compliant with relevant FSRA Rules; or c) (where applicable) that any Offer of a Security meets applicable Rules regarding the offer of that Security.
7.3 Any use of an ADGM logo should include the following disclaimer:
“Use of the [specified ADGM logo] does not create any rights in, or liability to, any person, public or private. The logo does not indicate an endorsement by the Regulator of any financial service or product, or a guarantee by the Regulator that any financial service or product is or will be compliant with the FSRA Rules”
7.4 A Person may only use the form of an ADGM logo that is reproduced from original
artwork provided by the Regulator.
7.5 The Regulator will withdraw its permission to use an ADGM logo if a product or service
fails to, or chooses not to, maintain the corresponding designation.
7.6 The effect of a withdrawal of the Regulator’s permission is that an Authorised Person is
not permitted, in or from the ADGM, to market or offer a product or service using an ADGM logo.