Jurisdictions · room 04 of 18
The regulated perimeter.
The perimeter read as a constraint on the architecture: which acts a structure actually contains, who in the chain has to be authorised to perform each of them, and where each of them may be performed. Stated as at August 2026, and read again on any day it matters.
Where complexity arises · Jurisdictions · eighteen rooms
01 · What the structure asks
The general prohibition
A permission is a boundary on the architecture. Not a status the house wears.
Every structure requires somebody to be authorised to do something. Which somebody, and which something, is fixed by a closed list in each centre, and that list is what the design has to be drawn against. Four facts settle what a permission does to a structure, and the last of them is the question a manager should be putting to itself.
A structure containing an act that nobody inside it is permissioned to perform does not have a slow problem. It has a missing part, and the part cannot be supplied by anybody at the table. The reason is Section 19 of the Financial Services and Markets Regulations 2015, which prohibits a person from carrying on a Regulated Activity in or from ADGM without authorisation. That is the general prohibition, deliberately blunt, and it makes a permission a release from one sentence, granted for named activities and no others.
A structure that reaches across both centres is drawn against two closed lists, and nothing carries from either to the other. The Dubai International Financial Centre closes the same door at Article 41(1) of Regulatory Law No. 1 of 2004, which prohibits carrying on a Financial Service in or from the DIFC without authorisation. The United Kingdom states it at section 19 of its own Act. Read the three together and you are reading one instinct three times: define a closed list of activity, close the door on it, then say in writing who may pass. What that does to a design is arithmetical rather than stylistic. A structure touching three systems is drawn three times and reconciled once, because an act cleared against one list is unexamined against the other two.
The items are permissioned separately, so the design question is never whether a house is regulated. It is which entity in the chain holds which item for which act. Neither statute defines the perimeter in the prohibition, so a structure held up against the prohibition alone has been held up against nothing it can build on: the sentence that closes the door names no acts. The acts sit elsewhere, and elsewhere is where the chain is read. ADGM specifies the activities in Schedule 1, as separate items, separately permissioned. The DIFC statute says Financial Service and stops; GEN Chapter 2 is where that phrase becomes a list, activity by activity, each defined in its own terms, with the exclusions that apply to it beneath each entry. Those two documents, and not the two prohibitions, are what a chart is drawn against.
A list is something a structure can be drawn against. An adjective is not, and a house that says fully regulated and moves on has given you nothing to draw against at all. The useful question is narrower than whether a house is regulated: which Regulated Activities does this house hold permission for. That question is normally pointed outward, at a counterparty. It reads exactly the same pointed inward.
Run the question on your own permission before a diligence officer runs it on you. Not whether the house is licensed, but which items it holds for the structure actually being built.
02 · The structure, act by act
The decomposition
A strategy is not a permission. It is a set of acts, and each act has a holder or it does not.
Break the structure into the acts it actually performs, map each act onto an item in the catalogue, then map each item onto a party who holds it. Read the licence for the item rather than for the letterhead. The items are drafted apart, and the separations decide who at your table may lawfully do what.
Eight acts cover most private-markets structures. The plate below sets each of them against what each catalogue publishes, and against what the separation does to the structure that performs it.
| By act · by catalogue | ADGM · Schedule 1 | The DIFC · GEN | What the separation does to the structure |
|---|---|---|---|
| Buying and selling on the vehicle's own account | Dealing in Investments as Principal. Being in the transaction on one's own account, with one's own balance sheet exposed. | GEN 2.7.4 addresses a person dealing in investments as principal by entering into a transaction with or through an authorised firm. It sits under a dealing entry rather than an arranging one and it does not extend to arranging, which is the reading it is most often asked to bear. | Whoever performs this is a counterparty to you, whatever else the meeting calls them, because their own balance sheet is in your transaction. That is a counterparty line in the structure and not a service line, and it is drawn as one. |
| Executing for somebody else | Dealing in Investments as Agent. The same act, for another person's account, and a separate item with its own permission. | Read in GEN, not carried over from the ADGM name for the same act. The architecture is conceptually descended from the United Kingdom regime and textually its own. | Two items, so a structure that needs both needs both held, and what looks like one desk may have to be two permissions. That a house may deal as agent tells you nothing about whether it may deal as principal, and that is exactly the distinction a manager assumes away. |
| Bringing a transaction about without holding a view on it | Arranging Deals in Investments. Making arrangements with a view to another person entering into such a transaction. Two exclusions sit beneath it in Schedule 1, at Chapter 2 paragraph 21 and at Chapter 18, and both are drawn for parties standing outside the perimeter rather than for a house already inside it. | GEN 2.9, defined broadly. Guidance under GEN 2.9.1 confirms the activity can capture a person whose involvement in a chain of events is important enough that the transaction would not otherwise occur. On direct review of the published GEN exclusions there is no counterpart to Article 29 of the United Kingdom Regulated Activities Order. | The width of this entry reaches parties in your chain who believed they were introducing rather than arranging, and the arranger need never have expressed a view on anything. Both ADGM exclusions are addressed to parties standing outside the perimeter rather than to a house already inside it, and which parties can reach either is a question for counsel, so the entry is read at its width before any comfort is taken from what sits beneath it. |
| Telling somebody whether to enter | Advising on Investments or Credit. A separate item, independently regulated, not a variety of arranging. | GEN 2.10 and GEN 2.11. Arranging deals and advising on financial products are distinct, independently regulated activities. | A structure that needs both acts needs both items named on somebody's permission. Permission to arrange is not permission to advise, and no quantity of experience converts one into the other. |
| Holding discretion over somebody else's portfolio | Managing Assets. Holding discretion over another person's portfolio. | Which entity holds the discretion is the first question, and where that discretion is actually exercised is the second. The catalogue answers the first; the territorial test answers the second, at where each act is performed. | A separately managed account, a directed side-car and a discretionary mandate are one act wearing three names, so each of the three puts the same item on somebody's permission and the same duties into the structure. |
| Running the pooled vehicle itself | Managing a Collective Investment Fund. An item in Schedule 1 in its own right, separate from managing assets under a discretionary authority. | One house may hold the item for running a pooled vehicle, or the item for a discretionary mandate, or both, or neither. Which of the four it is decides whether the design needs one licensed entity or two. | Two permissions and two sets of duties, so a design carrying a fund and a mandate beside it is asking one entity to hold both or two entities to hold one each. When a house says it is licensed, the question is which of the two it holds for what is being proposed. |
| Lending, and taking paper for it | The catalogue names credit expressly inside one item, Advising on Investments or Credit. Which item reaches the making of a loan is read in Schedule 1 before origination enters a strategy. | GEN 2.9.4 excludes lenders accepting debt instruments in the ordinary course of lending. The drafter considered lenders in relation to arranging and answered with an exclusion carrying a stated condition. | Adding origination adds an act rather than volume, because writing paper and buying it are separate acts on both sides of the plate. An exclusion is only as wide as the condition written into it, so the condition is read before the first facility agreement. |
| Communicating the offer | Marketing a vehicle in the zone is conduct the zone regulates, under rules the zone writes, and what those rules reach is the offer and the offeror. | Article 41A restricts financial promotions in or from the Centre without authorisation or an applicable exemption. On its face the Article is drawn on where the communication is made rather than on where the person communicating is physically located, which is our reading of its terms as at August 2026. | The paper that moves the capital is governed by different provisions from the acts around it, so a structure that has cleared its activities has cleared nothing of its documents. Arranging and promoting do different jobs, and clearing one clears nothing of the other. |
Every act on the left is performed by somebody in your structure on the day the vehicle trades. The only question is whether that party's licence names it, and a licence answers in items rather than in adjectives.
03 · Where each act is performed
The territorial test
Both statutes ask where the activity is carried on. Which puts the seating plan inside the structure.
Four words carry the weight of the ADGM section: in or from ADGM. Article 41(1) turns on the same test, and what is absent when a firm sits outside is a location, not a volume of work. Where the people who perform an act actually sit is therefore a structural decision, taken with the chain rather than after it.
That is the delegation question already. Delegating an act out of the centre moves the place where that act is performed, and the place is the exact fact the test turns on. Four consequences follow, and the last of them is put by somebody other than a regulator.
A claim, never a duty. The law of the place where a firm carries on its business governs whether that conduct is lawful there, so territoriality decides which regulator may reach the structure and never that none may. A manager reading it as relief has read it backwards, and has usually built on the reading.
The place, which is the fact the test reads. If the investment decisions are taken in another country, the centre entity is not the place where that act is carried on. The item is still named on the permission, and the activity is being performed somewhere the permission does not reach.
A delegation is worth what is left behind it, and what is left behind is designed before the memorandum is drafted rather than discovered after. This is the question both regulators ask, and it is asked in evidence rather than in argument: what stays inside the licensed entity after the delegation, and who inside it holds the judgement the permission was granted for. What each regulator requires is established from the primary text and from the regulator itself, on the facts of the specific delegation, before the arrangement is written.
Not one body, and not on one evidence base. The regulator that granted the permission asks whether the mind and management of the licensed activity are in the centre. A tax authority asks a separate question, on its own test, about where the entity is resident and whether an arrangement creates a taxable presence in its territory. Satisfying one answers none of the others, so the seating is drawn once and then tested against all of them.
A licence names an item; it does not follow the item to another country. The delegation memorandum and the permission have to describe the same entity doing the same thing, and they are usually drafted by different people in different months.
04 · The document, a second constraint
Activity and communication
Arranging and promoting do different jobs. Clearing one clears nothing of the other.
A second restriction crosses the same structure, and it runs on the paper rather than on the act. A manager that has thought hard about whether the act needed authorisation, and treated the documents that carry the offer as an afterthought, has solved half a problem. Four facts hold the two restrictions apart, and each is drafted to its own test.
What the general prohibition closes, and what the structure is drawn against act by act. It asks whether the thing being done is a named item in the catalogue and whether the party doing it holds that item. Section 19 in ADGM, Article 41(1) in the DIFC. It is answered act by act, and answering it says nothing about the paper.
What this one puts into a structure is a second clearance, run on the document set rather than on the chain, and an entity in the chart chosen for whether it may press send. The DIFC restricts financial promotions in or from the Centre, at Article 41A, prohibiting them without authorisation or an applicable exemption. On our reading of its terms, as at August 2026, the Article is drawn on where the communication is made rather than on where the person communicating is physically located. On that reading seating the sender abroad moves nothing, which is why the sending entity is settled against the entity chart while the acts are being seated, and not on the day the first deck is ready to leave.
A structure that has settled where its activity is carried on has not settled where its communications are made, because the two provisions ask different questions. Article 41(1) asks where an activity is carried on. Article 41A asks where a communication is made, and on our reading of its terms, as at August 2026, the answer does not turn on where the communicator is sitting.
In the zone the vehicle keeps its home law and the offer picks up the zone's. Marketing a vehicle in the zone is conduct the zone regulates under rules the zone writes, and what those rules reach is the offer and the offeror. They do not transplant the fund: the constitution, the duties of the people who run it, and what becomes of its property if things go badly remain matters for the law of its home. Two bodies of law inside one arrangement, then, and the split runs along the paper: the offer document is the only instrument the zone's rules reach, and the constitution that document describes answers somewhere else, to somebody else, on the day it is tested.
Where the offer travels is a second analysis, run per arrival state and per vehicle. It is worked on its own page, because it is a different perimeter and not a longer version of this one.
05 · When the question is answered
The sequence
The perimeter question has a date. After three of these steps it is being answered about something already done.
The same structure drawn as a sequence, with the steps that cannot be taken twice marked. Five steps stand in this order on almost every mandate, and only the first two of them leave every option on the plate above still open.
- 01 The acts named The structure decomposed into the acts it performs, each act set against an item in the catalogue and each item against a party who would hold it. Nothing has been filed and nothing has been said, so every item is still a choice.
- 02 The chain drawn and each act seated Which entity performs which act, and where the people who perform it sit. The territorial test reads the seating, so this is the step at which the delegation question is answered rather than the step at which it is discovered.
- 03 The permission relied on fixed A permission is granted for the strategy described in the application, and from that day the description sits on the file. Widening it afterwards is not a drafting change, and it is not the manager's decision to make. One-way
- 04 The first act performed An act performed is not un-performed. Whether an item named it is a fact about the day it happened, and the first facility agreement, the first mandate and the first trade each fix that day for a different act. One-way
- 05 The holder admitted to the register The register keeps the entry, and the classification record sits beside it. A rollover, a team co-investment or a feeder each put a name there, and the tier either admits that name or it does not. One-way
Three of these five cannot be taken twice. Before them the perimeter question is a design question with several answers available; after them it is a question about something the file already records, which is why the plate above belongs at step 01 and not at step 04.
The order is a property of the documents rather than a preference. It is drawable before the first entity is incorporated, and it is only expensive to draw afterwards.
06 · What moves the structure out
Outside the permission
A permission is granted for the strategy in the application. The structure is the thing that moves.
Nobody applies for a permission they will not use. What happens instead is ordinary: the structure grows a limb, and the limb is a different act. Four movements account for most of it, and each of them is visible in the design months before it bites.
- 01 Origination The strategy stops buying instruments and starts making them, which adds an act to the structure rather than volume to an existing one. Buying a loan and writing one are different acts, and a permission granted for the first says nothing about the second. Which item in the catalogue reaches the making of a loan is read before origination enters the strategy, because after it the licence is being re-read for an item nobody looked for at application. The facility agreement is not the place to discover the answer.
- 02 Discretion arriving without being announced A vehicle placed beside the fund is a second act and not a second copy of the first. A separately managed account beside the fund. A side-car where the manager decides. An investor that signs a power to act. Each moves the manager from running a pooled vehicle into holding discretion over another person's portfolio, which is a different item with different duties. The same hinge runs the other way, and it is the co-investment question in one sentence: participants do not have day-to-day control over the management of the property, whether or not they hold a right to be consulted. Genuine direction of the asset by the participant is what that limb is read against, and whether an arrangement is a fund or ownership with an agent is a characterisation question settled on the facts, by counsel.
- 03 An investor arriving whom the tier does not admit The register is part of the structure, and three ordinary transaction events write to it. Only the public tier can reach a Retail Client. A natural person generally reaches assessed Professional status at USD 1,000,000 in assets taken with relevant experience or professional certification, which is two limbs and not one. Classification attaches to the subscribing entity rather than to the person behind it, so capital held through a substantial corporate vehicle may find the vehicle is what gets classified. The three events are a seller rolling equity into the acquisition vehicle, a team co-investment admitted through the same register, and a feeder that takes individuals rather than institutions.
- 04 Delegation emptying the licensed entity The territorial test asks where the activity is carried on. Delegate the activity and the place moves. The licence still names the item; the entity may no longer be the place where it is performed. This is the movement that is invisible on the permission, because nothing on the permission changed. It is visible only in where the people who exercise the judgement actually sit, and that is what an examiner and a tax authority each look at, on different evidence.
Standing never widens a permission. Section 19 does not soften by a fraction because the client is sophisticated, and a professional investor base has never been a substitute for an item.
07 · Where it breaks
Failure points
Perimeter failures are found late because nothing visible changed when they happened.
Seven of these, and each one is a structural change that leaves no mark on the permission. Not one of them announces itself at the moment it is created, which is why the list is held against your own structure once a year rather than once a cycle.
- A list nobody re-read
The structure moved and the permission did not, because the permission was granted for what the application described. Nobody read the list again against what is now being done. Surfaces at the next thematic examination, or in an investor questionnaire that asks the question in writing.
- Origination added to a buying strategy
An act was added to the structure and no item was found for it. The vehicle was licensed to acquire instruments and has begun to create them. Surfaces at the first facility agreement, where counsel asks which item the act sits under and the answer is not in the file.
- A managed account read as an extension of the fund
Two different items and two sets of duties running on one set of operating documents, which is a second structure being run out of the first one's paperwork. Surfaces when the account holder asks a question the fund documents do not answer, and the answer has to come from somewhere.
- A holder the tier does not admit
The register admitted somebody the tier is shut to, through a rollover, a team co-investment or a feeder. Surfaces at the register, and immediately after it at the classification record, which is not public and governs more than its length suggests.
- The promotion perimeter, never tested
One of the two boundaries around the structure was cleared and the other was never read. The activity perimeter was worked carefully, and the documents that carry the offer were treated as marketing rather than as regulated communications. Surfaces when the offer materials are read by the regulator that governs where they landed.
- The item without the activity
Portfolio management was delegated out and the licensed entity kept the item on its permission without the people who perform it, so the chart and the licence now describe different places. Surfaces at the substance question, from either regulator, or from a tax authority asking a different question on the same facts.
- The unallocated duty
A duty that sits between three parties in the structure and is carried by none of them. Which party bears anti-money-laundering responsibility for the underlying relationship is separate from every authorisation question, and a structure leaving it unallocated has a real gap. It sits between manager, administrator and distributor until it is needed. Surfaces at the first relationship that is genuinely difficult.
Every one of these is visible in the structure long before it is visible in the file. Which is why the list is read against what the vehicle is doing this quarter, and not against what the application said it would do.
08 · Where the work stops
The line
Whether the permission covers the structure is a legal opinion. It belongs to your regulatory counsel, and to the regulator.
The reading on this page is structural. One thing returns from it, and three things sit on the other side of the line, each belonging to somebody who is answerable for it.
The act-by-act map, and it is part of the structural blueprint rather than a memorandum beside it: the structure decomposed into the acts it performs, tabled against the items the licence names, with the acts for which no item was identified named in writing before the transaction is committed, and the questions the instruments leave genuinely open stated rather than answered. Your counsel and your regulator then work against it.
Whether the item on your permission covers the act you intend to perform is an opinion given by counsel qualified to give it, on your facts, against the rulebook as it stands on the day. Where a variation is needed, it is the regulator and not counsel that decides it.
Any application, any variation, the appointment of controlled functions and every representation made to a regulator. Those are acts performed by the licensed entity, in its own name, and they are made by the people the regulator holds responsible for them.
Classification, suitability and the conduct rules the manager is examined against are the manager's own acts under its own module. An Authorised Firm carries its own obligation to identify and address conflicts, and in substance to disclose material inducements connected with how a client came to be introduced.
They sign the law. We hold the structure their advice is set against, and test it against the one you meant to build.
This is a structural reading of a public rulebook, stated as at its date and read again on any day it matters.
Read at FSMR section 19 and Schedule 1, and at Regulatory Law and GEN · August 2026