ADGM ups prudential requirements for financial firms: The ADGM Financial Services Regulatory Authority (FSRA) finalized amendments to its Prudential Rulebook (pdf) for Category 3B, 3C, and 4 firms, covering capital, liquidity, reporting, and professional indemnity ins. (PII) requirements. The rules take effect immediately, except for minimum PII cover standards, which apply from 1 January 2026.

We knew this was coming: The changes follow a FSRA consultation paper published in April that proposed raising base capital thresholds, scrapping the expenditure-based capital minimum for some firms, and easing certain reporting and PII obligations.

Capital floors raised: Category 4 firms — which include arrangers, advisers, and ins. intermediaries — now face a higher base capital requirement of USD 50k, up from USD 10k. If they operate a private financing platform and hold client assets, the threshold rises to USD 150k. Category 3C firms authorized to issue fiat-referenced tokens — stablecoins — must meet a USD 2 mn base capital requirement, aligning them with higher prudential standards for virtual asset providers.

Liquidity buffer changes: The expenditure-based safety capital buffer for Category 4 firms that don’t hold client assets or ins. money has been scrapped. Other firms in Categories 3B, 3C, and 4 must still maintain liquid assets equal to their expenditure-based capital minimum, which is detailed as follows:

  • Category 3C firms issuing stablecoins must hold capital equal to one year of expenses;
  • Firm holding crypto for clients must hold capital equal to 26/52 (or 50%) of annual expenses;
  • Firm that holds client money or ins. money must hold capital equal to 18/52 (or 35%) of annual expenses.
  • Category 3B or 3C firms with no client asset money must hold capital equal to 13/52 (25%) of annual expenses.

Reporting and risk reviews: A requirement for internal capital adequacy assessments will also be scrapped for category 3B and 3C firms, with only an internal risk assessment and supervisory review now required to fit their risk profile, the FSRA said.

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