DIFC's regulator drawing up framework to modify crypto assets
Dubai Financial Services Authority, the regulator of the emirate's financial free zone, is drawing up a framework for regulating digital assets, such as cryptocurrencies.
The move was revealed in your body's 2021/22 business plan released on Monday.
"We will appear to regulate a wide selection of digital assets, including security tokens, utility tokens, the many types of exchange (or payment) tokens, such as for example cryptocurrencies [and] the businesses that provide relevant services in these markets," Peter Smith, the head of strategy, policy and risk at the Dubai Financial Services Authority (DFSA) told The National.
"We will regulate these markets in a proportionate and thoughtful manner, drawing on best practices around the world."
The DFSA will publish two consultation papers seeking views on its proposed rules - one in the first quarter and the other in the next quarter, Mr Smith added.
Regulators around the region have been getting to grips with how to handle cryptocurrencies and other digital assets in the last couple of years.
Abu Dhabi Global Market's Financial Services Regulatory Authority published its first help with this issue in 2018 and in-principal approval to several crypto asset exchanges in 2019, including BitOasis, Digital Assets Exchange, Matrix Exchange and MidChains, amongst others. The Central Bank of Bahrain also launched rules governing the provision of crypto asset services in the kingdom in 2019.
The DFSA's business plan also said it would promote Dubai's capital markets by "enabling capital-raising by small and medium enterprises (SMEs) through equity and debt listings in the DIFC".
The DFSA created rules paving just how for small and medium-sized companies to list shares in April last year, prior to the announcement of a fresh Nasdaq Dubai Growth Market targeting SMEs in October. The exchange is defined to begin businesses in the first half of the year.
The DFSA will soon roll out rules governing the approval process for the compliance advisers smaller companies have to appoint to attain listings, as well for the filing of prospectuses.
The regulator also intends to intensify oversight in several areas, including of firms "carrying out financial services activities in or from the DIFC in substance but who lack the precise regulatory authorisation to do so".
"Maintaining the trustworthiness of the DIFC as a respected financial centre remains our core priority and the ones seeking to operate outside the letter and spirit of our regulations undermine this," leader Bryan Stirewalt said in the business plan. "Greater scrutiny will end up being positioned on business models and activities occurring in substance within the DIFC, regardless of legal structure."
This past year, the DFSA took action against Al Masah Capital, a Cayman Islands-based private equity firm and its Dubai-based affiliate Al Masah Capital Management. The regulator ruled that the latter was taking care of funds from within the DIFC with respect to its parent when it was not authorised to do so. It imposed fines with a merged value greater than $5m on both entities and on three of its key executives.
The Cayman Islands-based parent was placed into voluntary liquidation in August this past year.
Source: www.thenationalnews.com
