• ADGM’s fund and asset management sector posted a 48 percent year-on-year rise in AUM in Q3 2025, reaching 220 funds managed by 161 firms.
• FSRA introduced new periodic reporting requirements and proposed a streamlined regulatory structure for institutional and smaller fund managers.
• Consultation Paper open until 30 January 2026, with further reforms expected in 2026 as Abu Dhabi expands its global investment footprint.

Abu Dhabi Sets Out Next Phase of Fund-Sector Regulation

The Financial Services Regulatory Authority of Abu Dhabi Global Market used the platform of Abu Dhabi Finance Week to outline the strongest year yet for the financial centre’s fund and asset management sector, alongside a suite of regulatory enhancements designed to support the next phase of industry growth.

The updates were delivered as part of Asset Abu Dhabi, the fourth edition of ADFW’s investment-focused programme. Officials highlighted that the sector has become one of the central pillars of ADGM’s rise as an international financial hub, a role reinforced by 2025 performance data. By the third quarter, assets under management had increased 48 percent compared with the same period in 2024, while 161 fund and asset managers collectively oversaw 220 funds. The figures illustrate the centre’s expanding relevance for managers targeting global capital flows.

A Framework Designed for Scale and Market Sophistication

Against this backdrop, the FSRA detailed enhancements aimed at ensuring the jurisdiction keeps pace with international norms while maintaining proportional regulation for managers operating across varied strategies and sizes.

The first major change is the introduction of a periodic reporting requirement for all funds operating within ADGM. The requirement is tailored based on fund type, aligning the market more closely with global reporting practices. According to the FSRA, the change is intended to strengthen the authority’s ability to identify emerging risk patterns and inform future supervisory adjustments. Officials described the measure as foundational for evidence-based regulation.

Alongside the reporting requirement, the FSRA has released a Consultation Paper proposing further amendments to the funds framework. These proposals follow an extensive review and seek to modernise rules for institutional capital, smaller managers, and cross-border players.

Institutional, Boutique, and Cross-Border Managers in Focus

One of the headline proposals is the creation of a new regulatory category: the Institutional Fund Manager. The structure would apply to managers whose strategies exclusively target institutional investors, reflecting Abu Dhabi’s positioning as what officials describe as the “Capital of Capital.” The Consultation Paper also invites market feedback on whether the framework should extend to asset managers overseeing institutional funds more broadly.

A second proposal focuses on smaller managers, specifically those overseeing USD 200 million or less. The FSRA aims to streamline licensing and ongoing obligations to reduce friction for emerging firms and boutique strategies, building on the success of its venture capital fund manager regime.

Provisions related to employee investment vehicles are also included, creating clearer pathways for employees to invest in private funds managed within ADGM. At the same time, amendments are proposed for the oversight of foreign fund managers to strengthen safeguards and modernise cross-border supervisory expectations.

Market participants have until 30 January 2026 to respond to the Consultation Paper, with a follow-on consultation planned later in 2026 as the reforms move into execution phase.

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A Sector Positioned for Global Relevance

For ADGM, the regulatory updates come amid growing competition among global financial centres to attract fund formation, asset management operations, and institutional capital pools. Officials emphasised that Abu Dhabi’s approach leverages both its rapid sector growth and its evolving economic diversification agenda.

Emmanuel Givanakis, CEO of the ADGM FSRA, said the proposals were designed to mirror the jurisdiction’s growth while maintaining proportionate oversight. “The recent enhancements and our proposals going forward aim to not only further align our regulatory framework with international peers but also reflect a more proportionate approach based on the nature of our fund management ecosystem,” he said. He added that “since ADGM’s inception in 2015, the jurisdiction has established itself as a significant international hub for Fund Managers, with over 161 Fund Managers now established here, managing over 220 Funds. These changes aim to ensure that ADGM remains a preferred jurisdiction for Fund Managers seeking to operate within a well-regulated, yet progressive, environment.”

What Investors and Executives Should Watch Next

Institutional investors operating across the Gulf, Europe, Asia, and North America will be watching how the new reporting architecture influences transparency, data availability, and risk analytics within the region’s fast-developing fund ecosystem. The institutional manager category also presents opportunities for large global players to establish targeted structures within a unified Gulf regulatory environment.

For fund managers evaluating Abu Dhabi as a base, the proposed simplifications for smaller firms could reduce operational burden at a time when compliance costs remain a global concern. Cross-border firms will focus on the refinements to foreign manager rules, particularly as more managers explore regional hubs to align with capital inflows from sovereign wealth funds and multi-asset allocators.

As ADGM prepares for a second wave of consultation in 2026, the trajectory points toward deeper integration with international standards while preserving a regulatory environment designed to accommodate scale, experimentation, and institutional sophistication. The direction of travel reinforces Abu Dhabi’s emerging role as a global centre for funds, capital formation, and asset management activity.

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