Yesterday, the Dubai Financial Services Authority published the “Digital Financial Assets Regulatory Framework” Security Tokens, for public consultation, for a period of 30 days.
And it stated in a statement yesterday, that its move comes in response to the great interest witnessed in this field by the participants in the financial sector, which prompted the Authority to develop a comprehensive and innovative regulatory proposal to regulate digital financial assets.
Dubai Financial Services affirmed that it has worked closely with the main stakeholders in Dubai and around the world, to form a comprehensive vision regarding the future of the financial sector and the rapid growth of financial technology, including the various applications of the “distributed ledger” technology.
She explained that digital financial assets give rise to rights and obligations that are similar or very similar to traditional investment tools, pointing out that they used the term “digital financial assets” due to its prevalence in the sector, but the framework goes beyond the issue of model securities, to include other financial derivatives. This would allow the use of “distributed ledger” technology and similar technologies across the entire investment spectrum in a consistent manner.
Dubai Financial Services proposes to update the regulatory framework, to facilitate the carrying out of activities based on distributed ledger technology, through: making digital financial assets available to the public and accepting them through trading facilities, trading digital financial assets, and providing other financial services related to digital financial assets, such as providing custody. Regarding digital wallets containing digital financial assets, advice and arrangements.
The main proposed changes included: allowing digital financial asset trading facilities to attract clients with direct access, such as retail clients, improving systems and controls requirements to address risks associated with the use of distributed ledger technology or similar technologies, enhanced disclosure in issuance prospectuses, and strengthening requirements for portfolio custody management. Digital.
Dubai Financial Services affirmed that the proposal to allow direct access to clients is a fundamental shift from the current trading model based on mediation in the market. While the proposal deals with the guarantees most appropriate to meet the needs of investor protection, and to address the risks of misconduct, with a focus on market integrity and financial stability, and how to deal with the threats of money laundering and terrorist financing in an environment that supports “direct access”.
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