ADGM Proposes Changes to Transfer Scheme Rules

The Financial Services Regulatory Authority of Abu Dhabi Global Market has issued Consultation Paper No. 2 of 2026, proposing changes to the rules governing transfers of certain financial services businesses under Part 7 of the Financial Services and Markets Regulations 2015.

 

The proposals aim to make the transfer scheme process more flexible by reducing when court approval is mandatory and introducing a new route for certain transfers to proceed without court sanction.

 

What is changing?

Currently, most Transfer Schemes must be sanctioned by the court before they can take effect. The FSRA proposes to narrow this requirement so that mandatory court approval would generally apply only to transfers of insurance business.

 

Even for insurance business, court approval would become optional in two cases:

a. intra-group transfers where all policyholders have consented; and

b. reinsurance transfers where policyholders’ consent is obtained through the ceding insurer.

 

For other transfers, court sanction would generally become optional rather than mandatory.

 

New “Modified Transfer Scheme” route

The FSRA also proposes a new Modified Transfer Scheme framework. This would allow certain transfers to proceed without court sanction if minimum safeguards are met, including:

a. advance written notice to the FSRA;

b. direct notice to affected clients explaining the likely impact of the transfer; and

c. public notice of the proposed transfer.

 

Banks and the two insurance-related exceptions above would also need to obtain a no-objection from the FSRA before proceeding.

 

Why it matters

If adopted, the proposals could simplify business transfers, restructurings and intra-group reorganisations for ADGM financial services firms. However, firms will still need to consider client-notification requirements, public notice obligations and any FSRA no-objection requirements before proceeding.

 

The FSRA is accepting comments until 21 September 2026. Until final rules are enacted, businesses should treat the proposals as guidance only and consider how the new regime may affect planned transactions.

 

Middle East Alliance Legal Consultancy L.L.C.
This insight is for general information only and should not be relied upon as legal advice.