The Dubai Financial Services Authority (DFSA) has established a regulatory framework for investment tokens as part of its efforts to stimulate the digital financial and technological environment while meeting the demands and requirements of market players.
DFSA is an independent regulatory body in Dubai that is in charge of monitoring and regulating financial services companies that want to operate in the city. It also licenses and regulates its products and services.
According to a report by the Emirati news agency WAM, the DFSA regulatory framework defines investment tokens as “a security token or a derivative token.”
The report notes that the creation of a new regulatory structure is the first step in DFSA’s Digital Assets Regime, reflecting the suggestions made in Consultation Document 138 published in March 2021. The consultation paper sought public opinion on DFSA’s plans to regulate security tokens.
As Cointelegraph reported in March, Dubai’s financial regulator asked members of the public to submit comments on its proposed rules for cryptocurrencies considered security tokens.
The investment token framework is designed to protect investors and provide legal certainty for market operators.
It specifies the type of investment tokens that are allowed and that can appear on a Digital Asset Exchange at the Dubai International Financial Center, as well as other relevant information.
The DFSA is also working on plans for unlisted securities that are not covered by the investment token regulatory framework.. These are expected to include cryptocurrencies, utility tokens, and certain stablecoins. DFSA is expected to release a follow-up consultation document in the fourth quarter of this year.
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