Overview of ADGM Category 4 License
The ADGM Category 4 License allows an Authorised Firm to perform a range of financial services, including:
Arranging Deals in Investments.
Advising on Financial Products.
Arranging Custody.
Insurance Intermediation and Management.
Operating an Alternative Trading System.
Providing Fund Administration.
Arranging Credit and Advising on Credit.
Operating a Crowdfunding Platform.
Providing Trust Services (excluding trustee services for express trusts).
Firms holding a Category 4 License may also choose to operate in a wholly Sharia-compliant manner or through an Islamic Window.
Capital Requirements:
Base Capital: USD 10,000.
Crowdfunding Platform: USD 140,000 (if holding client money).
Expenditure-Based Capital Requirement:
6/52 of annual operating expenditure.
18/52 of annual operating expenditure if holding or controlling client money.
Additional Requirements: The FSRA may impose further capital requirements based on the review of the application.
Licensing Process for ADGM Category 4
To obtain an ADGM Category 4 License, applicants must submit a detailed application to the Financial Services Regulatory Authority (FSRA), which will evaluate the merits and suitability of the applicant and the requested license category.
The Application Process
Initial Review: The FSRA will conduct an informal review of the draft Regulatory Business Plan and projected financials. If the FSRA is satisfied, the applicant will be invited to submit a full formal application, including a finalized Regulatory Business Plan.
MVG Dubai Office Support
Introduction to the Regulator: MVG Dubai facilitates introductions to the FSRA to streamline the regulatory process.
Drafting the Regulatory Business Plan: We prepare a comprehensive Regulatory Business Plan (RBP), including application forms, business flow processes, and organizational charts.
Financial Modeling and ICAAP: Our team prepares a detailed three-year financial model and drafts the ICAAP and Internal Risk Assessment Process (IRAP) reports, essential for assessing capital adequacy.
Policy and Manual Preparation: MVG Dubai assists in developing necessary policies and manuals, including Compliance, Anti-Money Laundering (AML), Risk Management, Remuneration, Governance, Conflicts of Interest, and Business Continuity Planning.
Form Preparation and Submission:
Regulatory Application Drafting: MVG Dubai drafts the regulatory application for both the firm and its key individuals, ensuring compliance with FSRA requirements.
Submission and Appointment Support:
Additional Support:
Office Lease: Assistance with locating and leasing suitable office space.
Bank Introduction: Facilitation of introductions to UAE banks for account opening and banking services.
License Issuance: Support in obtaining the financial services license from the FSRA.
Regulatory Application Submission: We manage the submission of the application, including policies and appointments for key roles such as Senior Executive Officer (SEO), Finance Officer (FO), Risk Officer (RO), Money Laundering Reporting Officer (MLRO), and Compliance Officer (CO).
AUT – CORE: Required for all applicants, covering details about the applicant, its activities, prospective clients, and controllers.
AUT – IND: Required for individuals in mandatory functions, including directors, senior executive officers, finance officers, compliance officers, and money laundering reporting officers.
AUT – AMS: Required for firms applying to arrange credit or deals in investments, as part of their proposed activities.
Post-Application Process
The FSRA will review the application and engage in ongoing dialogue with the applicant, which may include interviews with the nominated authorized individuals. Upon satisfactory review, the FSRA will issue an In-Principle approval with conditions to be met before the final license is granted. These conditions typically include:
Incorporation or registration of the entity with the ADGM Registrar of Companies.
Opening a local bank account and providing proof of capital remittance to the FSRA.
Providing evidence of office space for conducting financial activities.
Once these conditions are fulfilled, the FSRA will issue the formal license.
Conclusion
Obtaining an ADGM Category 4 License involves a detailed application process and adherence to regulatory standards. MVG Dubai provides comprehensive support throughout the licensing process, ensuring compliance with FSRA requirements and facilitating a smooth establishment in the UAE financial sector. Our services help firms navigate the regulatory environment and set up a successful operation in ADGM.