Dubai financial regulator announces new framework for investment tokens

Dubai financial regulator announces new framework for investment tokens


The Dubai Financial Services Authority (DFSA) has recently established a regulatory framework concerning investment tokens as a bigger part of its efforts for simulating the country’s digital financial and technological environment while meeting market players’ requirements.


An independent regulatory body of the UAE, DFSA is charged with monitoring and regulation of financial service companies that are willing to operate in the region. The independent agency also licenses products and services.


According to WAM, the Emirates-based news agency, DFSA’s legal framework would describe investment tokens as either a “Security Token” or a “Derivative Token.”


The news report has further noted that among DFSA’s Digital Assets Regime, the topmost priority is to create a new regulatory structure that reflects suggestions made in Consultation Paper 138. The paper, published in March 2021, had sought public input on DFSA’s plans for regulation of Security Tokens. 


Dubai’s financial regulator had also called on members of the general public to submit comments on the proposed rules for cryptocurrencies that are considered to be security tokens.


The investment token legal framework has been designed for safeguarding investors and providing them with legal certainty.


The proposal would further specify the sort of investment tokens that would be permitted and listed on a Digital Asset Exchange at the Dubai International Financial Centre, as well as other significant details.


The DFSA is also working to unlist securities that are not covered by the investment tokens regulatory framework. These are anticipated to be including cryptocurrencies, stablecoins and utility tokens.


 The DFSA is expected to publish a follow-up consultation paper by December 2021.

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