Earlier this month, one of the UAE’s regulators for virtual asset businesses released an important update to its legal framework. The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) released a new guidance for security token issuance, "Guidance – Listing Applications and Eligibility (VER01.100425)." This new Guidance offers a clear, structured roadmap for issuers looking to list tokenised securities within the ADGM. It not only standardizes the application process for entry onto the “Official List” (a formal list of securities approved by the regulator for trading from recognised venues) but also raises the bar for transparency, governance, and market readiness. This is an important update to the ADGM’s legal framework for virtual assets and addresses important market developments, particularly in relation to tokenised real world assets (RWAs), a subdivision of what the FSRA identifies as Asset Referenced Tokens or “ARTs”. 

Whether you're an issuer, legal advisor, investment banker, or fund manager, this guidance, this Guidance, the fourth in the series comprising the FSRA’s legal framework for virtual assets, marks a new chapter in ADGM's tokenised markets development. Here’s a breakdown of what’s new, what’s expected, and why it matters.

What the Guidance Does

This updated guidance formalizes the listing application process, introduces a defined eligibility assessment, and clarifies FSRA’s expectations from the start of an issuer's listing journey to admission. It consolidates requirements scattered across the Financial Services and Markets Regulations (FSMR) and the Market Rules (MKT), giving applicants a practical, all-in-one reference.

The Guidance applies to:

• Companies seeking a primary or secondary listing

• Issuers of equities, debt, warrants, depository receipts, or fund units

• Entities planning direct listings (without raising new capital)

• Exempt Offerors or issuers of Exempt Securities

Key Elements of the Guidance

• Formalized Listing Application Process: The Guidance details the standardised documentation required to support a listing application. Issuers are required to submit a formal Listing Application (MKT Form 2-4) along with a robust package of supporting documents​. This includes an FSRA-approved Prospectus (or other applicable offer document), a listing eligibility checklist, a cover letter addressing eligibility criteria (“Listing Eligibility Letter”), a shareholder statement, and a pricing statement (confirming offer pricing/size). By specifying these documentation requirements, the new Guidance standardizes what information issuers and their advisors must provide, ensuring a thorough eligibility assessment by the regulator.

• Early Regulator Engagement: FSRA now encourages early engagement with prospective issuers. Even before a formal application or Prospectus submission, issuers (and their advisors or sponsors) are urged to contact the Listing Authority to discuss listing plans or seek guidance on eligibility requirements. This is a procedural enhancement intended to surface and address any potential issues well in advance, streamlining the approval process for well-prepared applicants.

• Clarified Timing and Steps: The Guidance lays out the steps of the application review process – from submission, through to FSRA assessment, to the final decision​. It emphasizes that the Listing Authority will work iteratively with the applicant, often requesting additional information or confirmations during the review​. Issuers should anticipate a collaborative review where FSRA may seek further documentation specific to the issuer or its securities to ensure all listing requirements are met​. This transparent process description is new and gives issuers a clearer roadmap of what to expect.

• Direct Listings & Offer Requirements: The Guidance explicitly confirms that an issuer “does not have to make an Offer of Securities” in order to list​. In other words, direct listings of existing shares (with no new capital raise) are permitted in ADGM, provided the issuer still meets all applicable listing criteria (notably the free float requirement). The Guidance notes that a direct listing may be desirable in cases where a company simply wants its shares traded (to gain market profile) and might raise funds later as a listed entity. However, even in such cases the regulatory focus on sufficient free float and orderly trading remains – FSRA cites MKT Rule 2.3.10 and its “sufficient Shares in public hands” test, underscoring that adequate liquidity and shareholder distribution are “fundamental to orderly trading”​. This clarification is important for issuers considering a listing without an immediate public offering.

• Unified Treatment of Foreign or Dual Listings: The new Guidance makes clear that all issuers are subject to the same eligibility assessment, regardless of domicile or listing history​. There is no automatic “light-touch” regime for secondary listings in ADGM. A company already listed on an overseas exchange must still submit the full Listing Application and meet ADGM’s listing requirements in the same way a first-time issuer would. That said, the Guidance indicates FSRA can consider case-by-case waivers or modifications to avoid duplicating regulatory burdens for secondary listings​. This signals a new balance: ADGM will hold foreign issuers to high standards, but with some flexibility (via waivers) in appropriate circumstances.

• Prospectus Exemptions vs. Listing: The Guidance brings new clarity on “Exempt Offers” and their treatment in the listing context. Under ADGM rules, certain offers of securities may be exempt from the Prospectus requirement (detailed at s.4.3 of MKT including private placements or small offers capped at 200 retail participants and USD 5M), and certain issuers/securities are classified as Exempt Offerors or Exempt Securities. The Guidance confirms that an exemption from producing a Prospectus does not exempt an issuer from the need to go through the Official List admission process. So, if an issuer seeks to make an exempt offer of securities, it will still have to submit a Listing Application and provide an alternative listing document, such as a summary offering document approved by FSRA. This is a critical clarification: Exempt Offer documents cannot be used to list – listing requires its own compliance step. 

• Eligibility Criteria and Interpretations: A significant portion of the Guidance is devoted to elaborating on the listing eligibility criteria in MKT Chapter 2.3. The core general eligibility requirements – such as proper incorporation, production of audited financial statements, suitable management expertise, no serious conflicts of interest, freely transferable securities, etc. – are not new, but the Guidance provides fresh interpretation and context for each (referencing the rule by number)​.

• For instance:

  • Free Float: MKT Rule 2.3.10 requires a sufficient free float of shares. The Guidance’s commentary indicates that ADGM uses various tests to determine “sufficient shares in public hands”, and it stresses that an adequate free float is “fundamental to… orderly trading and liquidity” . This suggests a more nuanced approach rather than a single percentage threshold.

  • Track Record and Financials: Companies must have audited financial statements in accordance with MKT 2.3.2. The Guidance reinforces the need for a sufficient track record or financial history (exact specifics in MKT rules), ensuring transparency of past performance.

  • Management and Governance: The ADGM explicitly requires that an issuer’s directors/senior management have adequate experience and expertise (MKT 2.3.5). The Guidance fleshes this out, indicating that the FSRA will evaluate management’s capability to comply with market obligations and run a public company . It also ties in the Listing Principles (MKT 2.2) – high-level obligations like treating shareholders equally – noting that FSRA will assess an applicant’s ability to uphold these principles even before listing (e.g. checking that the company’s constitution ensures equal rights for all holders of the class to be listed). This is a new emphasis on qualitative suitability – not just meeting numeric tests, but also having the governance framework to maintain market confidence.

  • Conflict of Interest and Control: Under MKT 2.3.7, issuers must manage conflicts of interest. The Guidance provides examples or expectations (such as arrangements with controlling shareholders, or mitigating conflicts via corporate governance measures). It reinforces that any significant conflicts or related-party issues should be disclosed and addressed as part of eligibility – again underscoring suitability.

  • Entire Class to be Listed & Free Transferability: The Guidance reiterates applicability of rules like MKT 2.3.11 (the entire class of securities must be admitted – an issuer cannot, for example, list only a portion of a share class) and MKT 2.3.8 (securities must be freely transferable). These requirements are standard, but by highlighting them, the new Guidance ensures issuers plan their capital structure accordingly (e.g. no lock-in provisions that violate free transferability).

  • Clearing and Settlement: Per MKT 2.3.12, securities to be listed must be eligible for electronic clearing and settlement. The Guidance notes that issuers should arrange for their shares or bonds to be settled through a central securities depository or clearing system acceptable to ADGM . This will be a procedural reminder for new issuers to coordinate with clearing systems in advance.

  • Special Securities (Shares vs. Debt vs. Warrants vs. DRs): The Guidance contains dedicated eligibility requirements for specific security type . For example, equity shares will have a free-float test and possibly a minimum market cap or shareholder number expectation; Debentures will require a credit rating or particular covenants; Warrants will coverage ratios (to ensure underlying shares are available); Depository Receipts will need an underlying issuer that meets certain standards. These specifics were embedded in the MKT rules, but the Guidance brings them to the fore, so issuers of each instrument know the exact criteria.

  • Dual-Class Shares: Notably, ADGM’s framework permits Weighted Voting Rights (WVR) structures (dual-class shares), subject to certain conditions. The Guidance highlights that if an issuer has a dual-class share structure, it must comply with additional safeguards in MKT (Rules 9.3.14–9.3.20). This is a relatively recent innovation in ADGM’s regime and is aligned with trends in global tech listings). The implication is that high-growth or family-owned companies can list with, say, Class B shares carrying extra votes, but only with FSRA approval and within strict limits.

• Comprehensive “Eligibility Assessment”: Perhaps the most significant update is the formal definition of the eligibility assessment – the holistic review of an applicant against all listing criteria (initial and ongoing)​. The Guidance explains that FSRA’s Listing Authority will assess not only compliance with the immediate listing rules (MKT 2.3), but also the issuer’s ability to comply with continuing obligations that will apply once listed​. For example, even though certain obligations (e.g. continuous disclosure in MKT Chapter 7, corporate governance in Chapter 9, periodic financial reporting in Chapter 10) technically apply after listing, the regulator will evaluate at application stage whether the company has the systems and controls to meet those obligations in the future. This is a new level of scrutiny. Issuers must demonstrate, for instance, that they have adequate disclosure controls to make timely announcements, procedures to produce annual and interim reports on time, and governance policies to comply with the rules. By defining this eligibility assessment in the Guidance, the FSRA is effectively raising the bar for preparedness – expecting companies to front load compliance with key ongoing requirements as a condition of listing.

  
  

• Special Treatment for Funds: The Guidance includes a dedicated section for Collective Investment Funds (paragraphs 216–219, referenced in the Introduction)​. This acknowledges that listed investment funds have different regulatory requirements. The ADGM’s Funds Rulebook contains the prospectus requirements for fund units, which differ from those for corporate securities in MKT​. Additionally, Chapter 3 of MKT sets out some distinct listing requirements for Funds. The Guidance directs that those interested in the admission of Units of a Fund (e.g. ETF, REIT or VCFM-managed venture fund) should first read the fund-specific Guidance paragraphs to understand these differences​. In effect, the Guidance ensures that funds know that parts of the Guidance (e.g. certain eligibility criteria) may not apply or are modified for funds, and it provides a roadmap for fund listing procedures. This separation of fund considerations is a new element, reflecting the growing interest in fund listings.

   

• FSRA Discretion and Investor Protection Measures: The Guidance codifies FSRA’s regulatory discretion in the listing process, adding important clarifications:

  • Power to Refuse or Condition a Listing: Even if an applicant formally meets all rules, FSRA may refuse admission or impose conditions on an approval if it deems the issuer or securities “not suitable for listing” (s52, FSMR). . This is a strong statement of regulatory intent – the FSRA will consider qualitative factors such as the issuer’s integrity, business suitability, or reputational risks. It mirrors the approach of major listing authorities who guard the market’s reputation. Likewise, the FSRA can approve a listing subject to specific conditions or restrictions on the issuer​. The Guidance notes that every “provisional” eligibility decision will at minimum be conditional on the submission of final documents​. Additional conditions could address any lingering concerns up to or shortly after the listing date​. This use of conditional approval is a procedural enhancement that gives the regulator flexibility to manage risks without outright rejection – and it informs issuers that partial compliance can result in a conditional green light rather than a red light, depending on FSRA’s judgment.

  • Waivers and Modifications: The new Guidance highlights the mechanism for obtaining waivers or rule modifications from FSRA. Under FSMR section 9, the FSRA has authority to “disapply or modify” certain rules in individual cases (see para. 24 of  the Guide). However, it immediately cautions that this power is used sparingly and where strictly necessary​. The takeaway is that issuers with unusual situations can approach FSRA for bespoke relief, but such relief will be granted only if it aligns with regulatory objectives. In practice, any waiver will likely come with conditions and will be documented as part of the listing decision. Additionally, the Guidance includes a dedicated section on waivers (paragraphs 220–223). For issuers, this transparency about waivers is new: it signals that while the rulebook is strict, there is a process to discuss exceptions – relevant for, say, companies from jurisdictions with different accounting standards, or ones that don’t meet a numerical requirement but have mitigating factors.

  • Regulatory Notifications (Refusal Process): The Guidance spells out the formal process the FSRA will follow if it intends to refuse a listing. In line with ADGM’s administrative procedures, the Listing Authority must give the applicant a Warning Notice (under FSMR section 246) indicating the proposed refusal and the reasons. The issuer then has a chance to respond. After considering any response, FSRA will decide whether to refuse; if it does, it issues a Decision Notice stating the refusal and reasons. In certain cases, a further Final Notice may be issued to confirm the decision​. The Guidance also notes that the FSRA has discretion to publish these notices to inform the market​. All of this adds procedural clarity and underscores fairness – issuers have an opportunity to be heard, and there’s a documented decision that can be referred to. 

  • Issuer Disclosure on Admission: The Guidance addresses announcements or disclosures an issuer must make at the time its securities are admitted to the Official List. For example, issuers are typically required to announce their listing date, any stabilization agents, or final offer statistics. The Guidance consolidates these expected disclosures (as implied by a reference that conditions may require certain “documents/information… to be disclosed at the time of admission”​). This ensures issuers and their advisors prepare the necessary market announcements on day one of trading – a practical detail newly addressed for completeness.

    
    

• Fee Framework: Token issuers will need to budget for admission of Securities to the Official List and for filing a Prospectus (provided not an Exempt Offer). Those fees are USD20,000 for a Prospectus for Shares, or 10,000 for Structured Products and Debentures. Admission to the Official List of Securities application is 3,000. (See 9.2 FEES Rulebook)
  
  

Implications for Issuers and Market Participants

Overall, the Guidance represents a significant update most relevant to token issuers, which is a great step forward for the maturing tokenised RWA and financial products market, introducing clear expectations and procedural certainty for listing. Key implications include:

• Greater Transparency and Predictability: Market participants now have a much clearer blueprint of the ADGM listing process from start to finish. Issuers seeking admission​ can better anticipate regulatory requirements and timelines as well as account for costs and start designing their regulated listing from the outset, reducing the risk of last-minute surprises, as the FSRA’s areas of focus like free float, governance, and compliance expectations are spelled out upfront.

• Higher Standards of Preparedness: By formalizing the eligibility assessment and requiring proof of ability to comply with ongoing obligations, the FSRA is effectively raising the bar for public listings in the ADGM. Companies will need to invest more effort before listing – for instance, implementing proper disclosure controls, appointing experienced finance and compliance staff, and engaging advisors familiar with the process. Advisors (Ape Law) will play a crucial role in compiling the eligibility checklist and drafting application documentation. While the cost and effort before an ADGM IPO may increase, this ensures that only well-prepared, quality assets enter the market – which in turn protects investors and the market’s reputation.

• Regulatory Flexibility (with Safeguards): The updated Guidance gives issuers some comfort that the FSRA can be flexible in certain scenarios – for example, considering waivers to accommodate unique situations or using conditional approvals rather than outright rejections. A sovereign or supranational issuer, for instance, might not meet a literal requirement but could be allowed to list via a tailored approach​. Similarly, a company that is sound but finishes an acquisition only right before listing might get a conditional nod pending post-listing integration disclosures​. However, this flexibility comes with clear safeguards: it’s used sparingly and only when aligned with the FSRA’s regulatory objectives​. Issuers should not assume they can easily waive core rules; any relief will require strong justification and possibly come with conditions attached​. The implication is that ADGM remains a highly regulated market – exceptions are possible but will not undermine the overall rigor of the regime.

• Enhanced Market Integrity and Investor Confidence: For investors and market observers, the Guidance’s emphasis on the FSRA’s discretion to refuse unsuitable applicants is a positive sign. It means that the ADGM is committed to admitting only companies that are of appropriate quality and integrity, even if that means turning some away. Over time, this should boost investor trust in ADGM-listed securities, improving the attractiveness of the market to both issuers and investors.

• Facilitating Diverse Listings (Including Funds and Innovative Structures): The Guidance reflects the ADGM’s intent to accommodate a broader range of listings within a clear regulatory framework. By spelling out how funds can navigate the listing process​ and acknowledging modern listing structures the ADGM is signaling openness to innovation while maintaining standards. This can make ADGM more competitive as a listing venue. For example, a fintech or tech startup with a dual-class structure might consider ADGM, knowing the rules permit it (with safeguards), and a fund manager might list an ETF on ADGM knowing the process is well-defined.

Get in touch if you want to discuss a regulated listing strategy as part of your token launch.