The FSMR — Financial Services and Markets Regulations 2015 (ADGM)
FSMR is the statute the whole ADGM financial system runs on — including funds. The Abu Dhabi Global Market is a financial free zone with its own English-common-law-based legal system, and FSMR is its FSMA-style backbone (modelled on the UK's Financial Services and Markets Act): it creates the Financial Services Regulatory Authority (FSRA), defines what counts as a Regulated Activity, sets the authorisation regime for firms (Authorised Persons) and market infrastructure (Recognised Bodies), and carries the market-abuse, financial-promotion and enforcement rules. For a fund, FSMR is the enabling law — the collective-investment-fund framework lives in it, and the operational detail sits one level down in the Fund Rulebook (FUNDS).
What FSMR governs
| Area | What FSMR does |
|---|---|
| The Regulator | Establishes the FSRA and its powers, functions and objectives — rule-making, supervision, and the power to modify or waive its own Rules on application. |
| Authorisation | No person may carry on a Regulated Activity in or from ADGM without being an Authorised Person (the "general prohibition"); FSMR sets the permission, approved-persons and controllers regime. |
| Market infrastructure | The Recognised Body regime for exchanges and clearing houses, plus the market-abuse and disclosure provisions. |
| Financial promotions | Restrictions on communicating financial promotions — the ADGM analogue of the UK financial-promotion regime. |
| Collective investment funds | The statutory fund framework — what a Fund is, the Domestic/Foreign split, the Fund Manager requirement, and the rule-making power the FSRA uses to issue the Fund Rulebook. |
| Enforcement | Supervisory powers, sanctions, decision-making and the route to the Financial Services and Markets Tribunal. |
Where funds sit
FSMR is the law; the Fund Rulebook (FUNDS) is the detail. FSMR establishes that operating or managing a collective investment fund is a Regulated Activity (so the manager must be an Authorised Person) and gives the FSRA the power to make the Fund Rules; FUNDS then sets the fund categories — Public Funds, Exempt Funds and Qualified Investor Funds (QIFs) — and the operational obligations for each. So a fund manager reads the two together: FSMR for the perimeter (do I need authorisation, for what activity), FUNDS for the product rules (which fund category, what it must do). ADGM's model deliberately mirrors the UK FCA structure, which is why an FSMA-literate practitioner finds FSMR familiar.
What it works with
Within ADGM, read FSMR with the Fund Rulebook (FUNDS) (the fund product rules) and the wider FSRA rulebook modules. Across jurisdictions, FSMR is ADGM's counterpart to the DIFC's two-layer set-up — the DIFC Collective Investment Law plus its CIR rules — and both UAE financial free zones sit apart from the onshore SCA regime. For the underlying model, the closest reference points are the UK COLL / FUND sourcebooks, since ADGM built on the FCA template.
The gotcha: don't mistake FSMR for the fund rulebook. FSMR tells you whether you need to be authorised and for what activity — get that wrong and nothing else matters. But the day-to-day fund obligations (eligible assets, disclosure, the Public/Exempt/QIF tier that sets your cost and investor base) are in the Fund Rulebook, not FSMR. Scope the perimeter question in FSMR first, then live in FUNDS.
To verify
- The precise section numbers for the general prohibition and the collective-investment-fund definition (this page describes the framework; confirm the exact FSMR sections against the consolidated text before citing a specific number, as the Regulations are amended periodically and section numbers can shift with amendments like the 5A/5B insertions).
- The current fund-category thresholds and any ADGM-specific vehicle features (e.g. the Investment Company / Investment Partnership forms) — these live in the Fund Rulebook and the Companies Regulations, not FSMR itself.