Jul 28, 2026 · 20 min · 8 segments
In this episode of **The Riffle Podcast**, we explore the FSRA’s proposed reforms to the ADGM Transfer Scheme framework and what they could mean for regulated firms undertaking business transfers…
Yeah, exactly.
Because under standard contract law, if you run, say, a wealth management firm and you want to transfer your client obligations to another firm, you can't just unilaterally sell that contract.
Let's break down Novation for the listener because it sounds like a simple paperwork exercise, but in practice, it is a logistical nightmare.
Oh, totally.
A Novation effectively requires you to tear up the original contract you had with your client and force that client to sign a brand new contract with the new firm.
Which, you know, is the ultimate form of client protection because the client has total agency.
But scale that up.
If you have 3000 clients or 30,000 clients, relying on active innovation is just paralyzing.
Yeah.
You're asking thousands of people to read a legal email, print a document, sign it and send it back.
I mean, half of them are on vacation.
Right.
Or they'll just ignore the mail.
Some will simply forget.
Yeah.
So you end up with this fractured portfolio where you can only sell the fraction of the business that actually bothered to reply to your emails.
You essentially have a stranded asset at that point.
So the statutory transfer scheme under Part 7 of the FSMR was historically created as the bypass valve for this exact problem.
Exactly.
It allows a business to transfer its portfolio without needing to track down and get active consent from every single client.
But because you are stripping the client of their right to actively say yes or no, the system demands a substitute protector.
Enter the ADGM courts.
Yeah, exactly.
Because under standard contract law, if you run, say, a wealth management firm and you want to transfer your client obligations to another firm, you can't just unilaterally sell that contract.
Let's break down Novation for the listener because it sounds like a simple paperwork exercise, but in practice, it is a logistical nightmare.
Oh, totally.
A Novation effectively requires you to tear up the original contract you had with your client and force that client to sign a brand new contract with the new firm.
Which, you know, is the ultimate form of client protection because the client has total agency.
But scale that up.
If you have 3000 clients or 30,000 clients, relying on active innovation is just paralyzing.
Yeah.
You're asking thousands of people to read a legal email, print a document, sign it and send it back.
I mean, half of them are on vacation.
Right.
Or they'll just ignore the mail.
Some will simply forget.
Yeah.
So you end up with this fractured portfolio where you can only sell the fraction of the business that actually bothered to reply to your emails.
You essentially have a stranded asset at that point.
So the statutory transfer scheme under Part 7 of the FSMR was historically created as the bypass valve for this exact problem.
Exactly.
It allows a business to transfer its portfolio without needing to track down and get active consent from every single client.
But because you are stripping the client of their right to actively say yes or no, the system demands a substitute protector.
Enter the ADGM courts.
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