80
Articles
12
Chapters
FSRA
Issuing authority
2015
Effective since
AI
Cited answers from article text
ADGM Prudential is one of the rulebooks issued by the Financial Services Regulatory Authority — ADGM. For compliance officers, legal teams, and advisors working under this regime, finding the right article quickly matters. Lexara indexes the full text of ADGM PRU Rulebook and makes it searchable two ways: full-text and keyword search for rapid lookup, and AI Explorer for natural-language questions answered with citations to the exact article.
80 articles in 12 chapters, each with a plain-English summary by Arakan. The full text of every article is in the Laws Browser.
Rule 1.1.11.1 Application
Firms must determine PRU applicability from their Financial Services Permission and apply the rules across their whole business, except a narrow Venture Capital Fund Manager carve-out.
Rule 1.3.1-1.3.81.3 Categorisation of Authorised Persons
Firms must determine their prudential category (1, 2, 3A, 3B, 3C, 4 or 5) based on their authorised Regulated Activities, applying Islamic Financial Institution and PSIAu criteria for Category 5.
Rule 1.4.1-1.4.21.4 Domestic Systemically Important Banks (D-SIB)
A bank designated by the regulator as a domestic systemically important bank must comply with extra supervisory measures and higher capital requirements; the regulator must publish designations.
Rule 2.2.1-2.2.32.2 Trading Book
Firms must maintain a Trading Book when trading-intent positions exceed prescribed thresholds, consistently classify positions, monitor Trading Book size, and record inter-book transfers.
Rule 2.3.1-2.3.82.3 Reporting
Requires firms to submit regulatory returns via EPRS on prescribed deadlines, certified by senior officers, correct inaccurate returns, and pay a late-submission fee.
Rule 2.4 Guidance; App2 A2.52.4 Prudent Valuation Practices
Entities must apply prudent valuation practices for fair-valued positions, ensuring adequate systems and methodologies, especially for positions without observable market prices.
Rule 3.2.23.2 Basic Requirements - Branches
Branches must maintain adequate liquid assets, comply with Home State regulator requirements, submit capital adequacy reports within 10 days, and notify the Regulator of any anticipated breaches.
Rule 3.2.3-3.2.53.2 Basic Requirements - Domestic Firms
Domestic firms must keep capital resources at or above the capital requirement at all times, plus adequate additional capital or liquid assets, maintain capital adequacy monitoring systems, and notify the regulator immediately in writing of any actual or expected breach.
Rule 3.3-3.7A3.3-3.7A Base Capital, Risk Capital and Expenditure-Based Minimum
Firms must maintain required capital levels and liquid assets, calculating higher capital needs based on specified risk requirements for different categories.
Rule 3.3.1-3.5.1, 3.7A.13.3-3.5, 3.7A Base Capital Requirement and Risk Capital Requirement (Cat 1/2/3A/5)
Firms must keep CET1 Capital at or above the applicable Base Capital Requirement at all times, and for Categories 1, 2, 3A and 5 use the higher of Base or Risk Capital Requirement.
Rule 3.6.1-3.7.13.6-3.7 Expenditure Based Capital Minimum (Cat 3B/3C/4)
Category 3B, 3C and 4 firms must hold the higher of base capital or expenditure-based capital minimum, recalculate it on material changes, and submit to the Regulator within 7 days.
Rule 3.9.1-3.10.73.9-3.10 Tier 1 and Common Equity Tier 1 (CET1) Capital
Authorised persons must calculate Common Equity Tier 1 capital applying eligibility criteria, regulatory adjustments, and prescribed deductions, including for own, reciprocal and cross holdings and significant investments.
Rule 3.9.1-3.15.43.9-3.15 Calculation of Capital Resources (CET1/AT1/T2)
Capital Resources are calculated as the sum of CET1, AT1 and Tier 2 capital, applying eligibility criteria, adjustments and deductions for each tier, including significant-investment thresholds and minority interest.
Rule 3.11.1-3.12.93.11-3.12 Additional Tier 1 (AT1) and Tier 2 (T2) Capital
Firms must calculate AT1 and Tier 2 capital applying eligibility criteria, loss-absorbency, subordination, minimum maturity, distribution restrictions, and deductions for own, reciprocal and cross holdings.
Rule 3.13.1-3.14.13.13-3.14 Minority Interests and Qualifying Holdings
Firms must calculate minority interests and qualifying instrument inclusion per prescribed formulae, and apply a 1000% risk weight or CET1 deduction to excess non-financial qualifying holdings.
Rule 3.15.1-3.15.43.15 Calculation of Total Capital Resources
Total capital resources must be calculated as the sum of eligible CET1, AT1 and Tier 2 capital, net of all applicable regulatory deductions and adjustments.
Rule 3.16.2-3.16.33.16 Capital Ratios
Maintain prescribed capital ratios of CET1 at 6%, T1 at 8%, and total capital at 10% of Total Risk Exposure at all times.
Rule 3.17.1-3.19.103.17-3.19 Capital Conservation and Countercyclical Buffers
Firms must hold a 2.5% capital conservation buffer and countercyclical buffer in CET1 capital; on breach, they must restrict distributions and submit a conservation plan within five business days.
Rule 3.20.23.20 Adequate Capital Resources for Categories 3B, 3C and 4
Firms must immediately notify the Regulator and confirm in writing if Capital Resources fall below 120% of the Capital Requirement.
Rule 3.21.2-3.21.63.21 The Leverage Ratio
Calculate and maintain a Leverage Ratio of at least 3%, notifying the Regulator immediately if capital requirements are unmet.
Rule 4.3.1-4.3.54.3 Credit Risk Management Systems
Firms must maintain credit risk management systems, ensure the governing body reviews credit risk reports and annual stress tests, and promptly escalate policy or limit deviations.
Rule 4.4.1-4.4.84.4 Credit Risk Strategy, Policy and Procedures Manual
Firms must maintain a Governing Body-approved credit risk strategy and policy, reviewed at least annually, covering related person lending restrictions, exposure limits, and a documented credit procedures manual.
Rule 4.5.1-4.5.94.5 Processes for Credit Assessment and Problem Exposures
Firms must maintain an internal credit grading system rather than relying solely on external ratings, classify exposures into five categories, and apply minimum provisioning rates to problem exposures.
Rule 4.6.1-4.9.14.6-4.9 CRCOM Calculation Approach
Category 3A firms must, and Category 2 firms may with prior approval, use the Simplified Approach, calculating CRCOM as 10% of credit risk-weighted assets.
Rule 4.13 (Section)4.13 Credit Risk Mitigation
Firms applying credit risk mitigation, such as netting, collateral, guarantees or credit derivatives, must meet recognition conditions and maintain documented policies on maturity mismatch and stress testing.
Rule 4.14 (Section)4.14 Securitisation
Securitisation rules set risk transference conditions, prescribe RWA formulae for SE and early amortisation exposures, and cap aggregate SE RWA at on-balance-sheet levels.
Rule 4.15.1-4.15.104.15 Large Exposures - identification, limits and daily monitoring
Institutions must identify, measure, aggregate, and monitor large exposures daily, adhering to Tier 1 limits and notifying regulators of any breaches.
Rule 4.15.1-4.15.184.15 Large Exposures
Firms must monitor large exposures daily, keep exposures within 25% of Tier 1 capital and 800% aggregate limits, report breaches immediately, and meet conditions for parental guarantee exclusions.
Rule 4.15.11-4.15.184.15 Large Exposures - CRM exclusion policy and parental guarantee exclusion
Firms must maintain a documented CRM-exclusion policy, perform periodic CRM stress testing for Large Exposures, and apply parental guarantee exclusion only when conditions are met, with tiered Regulator notification.
Rule 5.2.15.2 Market Risk Systems and Controls
Firms must implement and maintain a documented market risk policy covering risk appetite and risk management, supported by enabling systems, reviewed at appropriate intervals.
Rule 5.3.1-5.10.75.3-5.10 Market Risk Capital Requirement Components
Firms must calculate market risk capital requirement as the sum of interest rate, equity, foreign exchange, commodities, option, fund and underwriting components.
Rule 5.4.1-5.8.15.4-5.8 Interest Rate, Equity, FX, Commodities and Option Risk Capital Requirements
Firms must calculate interest rate, equity, foreign exchange, commodities and option risk components of market risk capital, using an approved internal model or the standardised methodology.
Rule 5.9.1-5.10.75.9-5.10 Collective Investment Fund and Securities Underwriting Capital Requirements
Firms must calculate collective investment fund and underwriting market risk capital via an approved internal model or the standardised method, and monitor underwriting exposure and counterparty capacity.
Rule 5.11.1-5.11.45.11 Use of Internal Market Risk Models
Firms need prior written Regulator approval to use internal market risk models and written consent to revert to standardised methodology, plus rigorous stress testing.
Rule 6.2.1-6.2.26.2 Risk Management Framework and Governance
Firms must maintain a documented operational risk policy forming the risk management framework, approved by the governing body and reviewed at appropriate intervals.
Rule 6.3.16.3 Risk Identification and Assessment
Operational risk must be identified and assessed across all products, activities, processes and systems, with events tracked against Basel III event types and new product approval in policy.
Rule 6.3.1-6.4.16.3-6.4 Risk Identification, Assessment, Monitoring and Reporting
Operational Risk must be identified, assessed, and reported consistently, with tracking mechanisms for events and notifications to the Regulator for material risks.
Rule 6.4.16.4 Risk Monitoring and Reporting
Firms must regularly monitor Operational Risk Exposures and report significant risks immediately to the Regulator, including financial impacts.
Rule 6.6.1 and 6.7.16.6-6.7 IT Systems and Information Security
Firms must establish IT policies and infrastructure to manage technology risk, ensuring data and system integrity, security and availability, plus controls to manage information security risk.
Rule 6.8.16.8 Outsourcing
Regulated firms must establish and maintain systems and controls to manage outsourcing risk, including data-protection, geographic, exit difficulty and service-provider regulatory risks.
Rule 6.10 (Section)6.10 Management of Operational Risks in Trading Activities
Trading firms must maintain operational risk controls including segregation of front and back office duties, mandatory two-week trader absences, daily position reconciliation, audit trails, and escalation of anomalies.
Rule 6.11.1-6.11.56.11 Operational Risk Capital Requirement
Operational risk capital must use the Basic Indicator Approach unless the Regulator approves the Standardised or Alternative Standardised Approach, with gross-income mapping criteria documented.
Rule 6.12.26.12 Professional Indemnity Insurance
Firms must maintain appropriate professional indemnity insurance from a Credit Quality Grade 3+ insurer, provide the Regulator an annual board-approved confirmation of 12-month forward cover, and notify material changes to cover.
Rule 6.12A.1-6.12A.46.12A Professional Indemnity Insurance for Third Party Providers
Third party providers must maintain at least US$150,000 professional indemnity insurance at all times, and cover must exceed 30 times average daily transaction value over 90 days.
Rule 8.1.2-8.2.28.1-8.2 Group Risk Systems and Controls
On notification from the Regulator, maintain consolidated risk systems, report on Financial Group structures, and monitor Group capital adequacy.
Rule 8.3.1-8.3.48.3 Financial Group Capital Requirement and Resources calculation
Firms must calculate financial group capital requirement using the accounting consolidation method and ensure financial group capital resources always equal or exceed that requirement.
Rule 8.3.1-8.3.68.3 Financial Group Capital Requirements and Resources
Financial groups must calculate capital requirements and resources on a consolidated basis, keeping capital resources at or above the requirement and notifying the Regulator of exemption changes.
Rule 8.3.5-8.3.68.3 Financial Group Capital exemption
Financial groups may rely on the Financial Group Capital exemption when prescribed conditions are met, and must promptly advise the Regulator in writing if exemption circumstances change.
Rule 8.4.1-8.4.28.4 Financial Group Large Exposure Limits
Financial groups must keep large exposures, including PSIAu, to any single counterparty or closely related group at or below 25% of group Tier 1 capital, and aggregate large exposures at or below 800% of group Tier 1 capital.
Rule 8.5.1-8.5.28.5 Restrictions on Ownership or Control
Parents of Category 1 or 5 authorised persons must be qualifying regulated firms or banks, and Category 3A-4 firms may not parent them unless themselves subsidiaries of qualifying parents.
Rule 9.2.1-9.2.59.2 Liquidity Risk Policy and Governing Body Oversight
The Governing Body must maintain and annually approve a written Liquidity Risk policy, overseeing risk management and daily liquidity activities.
Rule 9.2.1-9.2.109.2 Liquidity Risk Policy, Governance and Controls
Firms must maintain a written liquidity risk policy approved at least annually by the Governing Body, with liquidity limits, stress testing, and a documented contingency funding plan.
Rule 9.2.6-9.2.109.2 Liquidity Risk Identification, Limits, Stress Testing and Contingency Funding Plan
Regulated firms must identify and assess liquidity risk across repayment profiles, funding concentrations and currency mismatches, set Governing Body-approved limits, run stress tests, and maintain a contingency funding plan.
Rule 9.3.2-9.3.99.3 HQLA and Liquidity Coverage Ratio (LCR)
Banks must hold sufficient high-quality liquid assets to survive a 30-day severe stress scenario, maintain a liquidity coverage ratio of at least 100%, and notify the Regulator immediately if unable to meet it.
Rule 9.3.2-9.3.149.3 Liquidity Requirements - HQLA, LCR and NSFR
Firms must hold HQLA covering 30-day severe stress, maintain LCR and NSFR of at least 100%, and notify the regulator immediately of any shortfall.
Rule 9.3.10-9.3.149.3 Net Stable Funding Ratio (NSFR) and Liquidity Mismatch Approach
Category 1 and 5 domestic firms must maintain a Net Stable Funding Ratio of at least 100%, notify the Regulator immediately if it falls or is likely to fall below, and monitor liquidity mismatches under the Liquidity Mismatch Approach.
Rule 7.2.1-7.2.67.2 Stress Testing for Non-Trading Book Interest Rate Risk
Non-Trading Book interest rate risk must be evaluated quarterly with a 200 basis point rate shock and reported to the Regulator if economic value decreases substantially.
Rule 7.3.17.3 Non-Trading Book Interest Rate Risk under Chapter 10
ADGM entities must document Non-Trading Book interest rate risk assessments as part of IRAP/ICAAP and retain records for at least 6 years.
Rule 7.4.17.4 Systems and Controls for Non-Trading Book Interest Rate Risk
Firms must implement and maintain a documented non-trading book interest rate risk policy and framework, assess risk of new products before launch, and review the policy periodically.
Rule 10.3.1-10.3.410.3 Internal Risk Assessment Process (IRAP)
Firms must establish an Internal Risk Assessment Process, conducting annual assessments and documenting risks, mitigation strategies, and retaining records for at least six years.
Rule 10.3.4-retRecord Retention — IRAP assessment records (risks identified, mitigation strategies, Capital Requir
Firms must retain IRAP assessment records, covering risks identified, mitigation strategies, capital requirement adequacy and stress testing results, for six years from completion or submission.
Rule 10.4.1-10.4.410.4 Internal Capital Adequacy Assessment Process (ICAAP)
Conduct and maintain an Internal Capital Adequacy Assessment Process (ICAAP) annually, documenting strategies and retaining records for 6 years.
Rule 10.4.4-retRecord Retention — ICAAP assessment records (calculations/models used, capital strategy and plans,
Firms must retain ICAAP assessment records, including calculations, models, capital strategy and plans, and model specifications and back-testing, for six years from completion or submission.
Rule 10.5 (Section)10.5 Supervisory Review and Evaluation Process (SREP) co-operation
Insurers must cooperate with the Regulator during the Supervisory Review and Evaluation Process regarding IRAP/ICAAP.
Rule 10.5 (Section); Rule 10.6.1-10.6.210.5-10.6 SREP and Individual Capital Requirement
Firms must cooperate openly with the Regulator in the SREP dialogue on ICAAP and IRAP quality, and must maintain at all times any Individual Capital Requirement imposed by written notice, in the specified Capital Resources.
Rule 10.6.1-10.6.210.6 Individual Capital Requirement (ICR)
Where the Regulator imposes an Individual Capital Requirement by written notice, the firm must maintain at all times the minimum Capital Resources specified in that notice.
Rule 11.1.1-11.1.311.1 Disclosure obligation and scope
Financial groups must make public disclosures on scope of application, capital, capital adequacy, leverage, liquidity risk, and material climate-related financial risk, unless an equivalent exemption applies.
Rule 11.1.1-11.2.311.1-11.2 Disclosure Obligation and Policy
Financial groups must make prescribed public disclosures on capital, capital adequacy, leverage and liquidity risk under a Governing Body-approved disclosure policy, with verification of accuracy and timeliness.
Rule 11.2.1-11.2.311.2 Disclosure policy and verification
ADGM regulated firms must adopt a written disclosure policy approved by their governing body and ensure internal or external verification of disclosure accuracy and timeliness.
Rule 11.3.1-11.3.311.3 Disclosure Frequency, Locations and Omissions
Firms must disclose capital and liquidity data at least annually, quarterly for CET1, Tier 1 and LCR components, and may omit only non-material or confidential items, stating the reason.
A1.1App1 Categorisation Diagram
Firms must apply the diagrammatic categorisation table in Appendix 1, which is guidance only, when determining their prudential category under Section 1.3 of the rulebook.
App2 (A2.1-A2.5)App2 Trading Book, Valuation and Reporting Detail
Firms must apply detailed trading book inclusion criteria, trading-intent tests, policy content, risk management controls, regulator reporting and prudent valuation requirements set out in Appendix 2.
App3 (A3.1-A3.2)App3 Stress and Scenario Testing Guidance
Firms must apply guidance on stress and scenario testing nature, type and frequency to support capital adequacy, including a summary table of minimum capital requirements by Category.
App4 (A4.1-A4.12)App4 Credit Risk Detailed Methodology
Credit risk methodology prescribes CCF tables, collateral haircut calculations, SFT and VaR model requirements, credit RWA for unsettled and repo transactions, and simplified approach for Category 2 and 3A firms.
App5 (A5.1-A5.4)App5 Credit Valuation Adjustment (CVA) Risk
Firms must calculate their credit valuation adjustment (CVA) risk capital requirement using the prescribed methodology, covering its scope, calculation formula and eligible hedges, as part of the overall risk capital requirement.
App6 (A6.1-A6.9)App6 Market Risk Detailed Methodology and Internal Models
Firms must apply prescribed market risk systems, controls and record-keeping, standardised capital calculation methods for multiple risk types, and criteria for regulatory approval and use of internal VaR models.
App7 (A7.1-A7.3)App7 Operational Risk Capital Requirement Calculation
Calculate Operational Risk Capital Requirement using the specified approaches detailed in App7.
App10 (A10.1-A10.4)App10 Liquidity - Global Concession, LCR, Liquidity Mismatch and NSFR Methodology
Branches seeking a global liquidity concession must meet the prescribed application requirements and calculate LCR, liquidity mismatch and NSFR under the detailed methodologies.
App11 (A11.1-A11.3)App11 IRAP, ICAAP and SREP Guidance
Firms must give due regard to the guidance on IRAP and ICAAP, including climate-related financial risk, and the Regulator's SREP methodology when performing required assessments.
App12 (Tables 1-4)App12 Public Disclosure Requirements - Detailed Content
Financial Group entities must publicly disclose detailed scope, capital, capital adequacy, leverage ratio and liquidity risk information, including LCR, HQLA and NSFR components.
ADGM PRU Rulebook's 150 indexed articles break down by obligation type as follows.
Finance / Risk Management — 38 articles
Finance — 25 articles
Finance / Compliance — 19 articles
Risk Management / Finance — 17 articles
Risk Management / Governing Body — 12 articles
Finance / Governing Body — 10 articles
ADGM PRU Rulebook spans the following regulatory topics, as tagged by Lexara.
adgm
fsra
pru
prudential
capital adequacy
risk
icaap
irap
liquidity
leverage
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What is ADGM Prudential?
ADGM Prudential is issued by the Financial Services Regulatory Authority — ADGM and has applied since 1 October 2015. It has 80 articles across 12 chapters.
What does ADGM PRU Rulebook cover?
It is organised into: Ch.1 - Application, Interpretation and Categorisation; Ch.2 - General Requirements; Ch.3 - Capital and Leverage; Ch.4 - Credit Risk; Ch.5 - Market Risk; Ch.6 - Operational Risk; Ch.8 - Group Risk; Ch.9 - Liquidity Risk; Ch.7 - Interest Rate Risk in the Non-Trading Book; Ch.10 - Supervisory Review and Evaluation Process; Ch.11 - Disclosure Requirements; App1-App12 - Detailed Methodology, Parameters and SREP/Disclosure Guidance.
Who issues ADGM PRU Rulebook?
The Financial Services Regulatory Authority — ADGM. Always check the authority's official publication for the binding text.
Can I search ADGM PRU Rulebook and ask questions about it?
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