Dubai Financial Services Authority Approves Investment Tokens Regulations

Dubai Financial Services Authority Approves Investment Tokens Regulations News developments

Dubai Financial Services Authority Approves Investment Tokens Regulations

Dubai’s Financial Services Authority has announced it has approved Investment Tokens Regulations.

They have been approved following a consultation which was launched earlier this year.

It marks the completion of the first phase of the Authority’s Digital Assets regime.

It defines an Investment Token as a Security Token or a Derivative Token.

These include a Security or Derivative in the form of a cryptographically secured digital representation of rights and obligations which is issued, transferred and stored using Distributed Ledger Technology or DLT or other similar technology.

It also includes a cryptographically secured digital representation of rights and obligations which is issued, transferred and stored using DLT or other similar technology and: confers rights and obligations which are substantially similar in nature to those conferred by a Security or Derivative; or has a substantially similar purpose or effect to a Security or Derivative.

The Regulations apply to those interested to market, issue, trade or hold Investment Tokens in or from the Dubai International Financial Centre (DIFC) and Authorised Firms wishing to undertake Financial Services relating to Investment Tokens, like dealing in, advising on, or arranging transactions relating to, Investment Tokens, or managing discretionary portfolios or collective investment funds investing in Investment Tokens.

The Authority added they are drafting proposals for tokens not covered by the Investment Tokens regulatory framework. These are expected to cover exchange tokens or cryptocurrencies, utility tokens and certain asset-backed tokens or stablecoins. They are going to issue a second consultation paper before the end of the year.

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Marlé Van Sandwyk