Navigating the new FSRA Fee structure

Background

The Financial Services Regulatory Authority ("FSRA") released a Consultation Paper in late 2023, and invited feedback from the general public regarding suggested changes, which would mainly affect the General Rulebook ("GEN") and the Fees Rules ("FEES").

This was after a fee benchmarking exercise against other financial centres.

The approved changes came into effect on the 1st of January 2024, and are in full effect.

 Revision of existing fees

Fees for authorisation and ongoing supervision were revised for most activities, except a few such as Virtual Assets, Providing Money Services and Market Infrastructure Activities.

Firms that undertake multiple activities are to pay the highest of the relevant authorisation/supervison fees associated with such activities, and US$ 10,000 for each additional activity undertaken.

For instance, if the Firm is being licensed/supervised for three activities – Managing Assets, Advising on Financial Products and Arranging Credit and Advising on Credit, then the firm has to pay US$ 25,000 (Managing Assets) plus US$ 20,000 for the two additional activities.

 Here are some of the fees associated with the more frequently licensed Regulated Activities:

 Accepting Deposits or Providing Credit – US$ 70,000 (authorisation) , US$ 100,000 (annual supervision)

Dealing In Investments as Principal – US$ 40,000 (authorisation) , US$ 50,000 (annual supervision)

Dealing In Investments as Agent – US$ 25,000 (authorisation) , US$ 25,000 (annual supervision)

Managing Assets, Providing Trust Services, Providing Custody – US$ 25,000 (authorisation) , US$ 25,000 (annual supervision)

Arranging Custody, Advising on Investments or Credit, Arranging Deals in Investments, Insurance Intermediation – US$ 15,000 (authorisation) , US$ 15,000 (annual supervision)

You can view the exhaustive list of fees here.

 Newly-introduced fees

The FSRA has introduced new fees for applications regarding the following matters:

· to remove specific restrictions imposed by the FSRA at the time of authorisation (US$ 5,000)

· to add the following permissions to an existing Financial Services Permission:

o Dealing with Retail Clients (US$ 5,000)

o Operating an Islamic Window (US$ 5,000)

· the opening of a non-ADGM based branch (50% of the highest application fee associated with the licensed regulated activities)

· filing a replacement Prospectus with the Regulator in relation to a Public Fund (US$ 3,000)

· approval of an Offer document originating from outside ADGM (US$ 5,000)

· change in control (US$ 1,000)

· a request for a waiver or modification (US$ 5,000)

Obtaining and retaining a designation under ADGM’s sustainable finance regulatory framework (US$ 2,000), including for an:

• ADGM Green Fund

• ADGM Climate Transition Fund

• ADGM Green Portfolio

• ADGM Climate Transition Portfolio

• ADGM Green Bond

• ADGM Sustainability- Linked Bond

 The endnote

Regulation just got costlier! To be fair, it’s been a while since these fees were first issued, so they were due for a refresh. However, startups will find it even more difficult now that their fixed costs will increase. Interesting times!