Dubai, UAE – The Capital Market Authority announced the issuance of a framework for regulating virtual assets. Reflecting its commitment to developing a modern and integrated system that keeps pace with the rapid growth of the virtual assets sector. It enhances market efficiency and supports responsible innovation within a clear and effective regulatory environment.
This framework is a specialized regulatory umbrella that governs virtual asset activities. It consists of five main units: general requirements, regulation of business conduct, alternative trading system, combating money laundering and terrorist financing, and precautionary requirements. Together, these units provide a comprehensive and transparent legislative and supervisory structure for entities operating in this sector.
eight activities
The framework also expands the scope of regulated activities from three to eight. These are: dealing in virtual assets as an original, dealing in virtual assets as an agent, providing custody services, arranging custody services, arranging investment deals, providing investment advice, managing portfolios, and operating a multilateral trading facility. This expansion reflects market development and the increasing business models and services associated with virtual assets, and also enhances the framework’s ability to accommodate a broader range of activities within clear rules and supervisory requirements that suit the nature of each activity.
The framework includes, among its core modules, a specialized module for the alternative trading system, which regulates trading facilities. The scope of this unit is not limited to organizing trading facilities dedicated to virtual assets. Rather, it extends to include traditional multilateral trading facilities for securities, as well as multilateral trading facilities dedicated to tokenized securities. This reflects the Authority’s approach to building an integrated regulatory framework that keeps pace with the development of market structures and responds to the convergence of traditional and digital models within a more integrated trading environment.
Balanced organizational foundations
The framework aims to establish balanced regulatory foundations that combine supporting innovation, enhancing market integrity, and protecting investors, by setting clear requirements for licensing, compliance, governance, risk management, and prudential standards. This is in line with international standards and relevant best practices. Including those issued by the International Organization of Securities Commissions (IOSCO) and the Financial Action Task Force (FATF). In accordance with the principle of “matching regulatory requirements to the nature of the activity and the level of risk”.
The issuance of this framework represents a qualitative step in developing the legislative and regulatory environment for the financial sector. This confirms the Authority’s commitment to keeping pace with global technological and financial developments. It also provides a more sophisticated and flexible system for virtual assets and their associated markets, and supports the growth of this sector on solid institutional foundations.
Moreover, the framework enables entities to operate within a regulatory environment that keeps pace with global trends and is based on transparency, efficiency and effective oversight. To enhance the country’s competitiveness and consolidate its position as a leading financial center for business and future financial services.
