Following the proposals that were drafted and outlined in March 2021, the Dubai Financial Services Authority (DFSA) announced the regulatory framework for Investment Tokens on 25 October 2021. The framework incorporates the recommendations from the DFSA’s Consultation Paper No. 138, and serves as the initial phase of the DFSA’s Digital Assets regime.
The framework outlines the definition of an “Investment Token” as either a Security Token or Derivatives Token, whilst also addressing the applicable individuals that may seek to: market; issue; trade; or hold these Investment Tokens in or from the Dubai International Financial Centre (DIFC) as well as the Authorised Firms who may seek to: deal in; advise on; arranging transactions involving or manage discretionary portfolios or collective investment funds investing in Investment Tokens.
The DFSA is currently developing further recommendations for tokens that do not fall under the initial phase of the Investment Token regulatory framework, which are expected to include: exchange tokens (alternatively referred to as cryptocurrencies); utility tokens; and specific asset-backed tokens (stablecoins). The DFSA expects to publish a follow-up consultation paper in Q4 of this year.
Further details pertaining to the Regulatory Framework can be found here.
How can j. awan & partners help?
Our in-house professionals can help guide you in understanding how the framework may apply to your business as well as assist in new regulatory license applications in the DIFC, ADGM, SCA and CBUAE; licence variations; and the drafting of Compliance, AML and Risk Frameworks relating to virtual assets.
