The Dubai Financial Services Authority (DFSA) has requested feedback on its proposed regulations of security tokens, including derivatives.
- In an announcement made on Monday, the DFSA said it has published its framework for regulating the space and is giving the public 30 days to comment.
- The regulatory body is proposing updating its regulations to facilitate activities based on distributed ledger technology (DLT). The update will focus on public access to buying and trading security tokens and on issues related to the provision of custody.
- The key changes include allowing those facilities that trade security tokens to have direct access members, including retail clients, said DFSA.
- The agency said it will issue proposals for other types of tokens such as “exchange tokens” and “utility tokens” later in 2021.
- “The proposal for regulation of Security Tokens is a key milestone in paving a clear and certain path for those issuers who wish to raise capital in or from the DIFC using DLT and similar technology, and for those firms who intend to be involved in this market, by conducting or providing financial services,” said Bryan Stirewalt, the chief executive of the DFSA.
- Stirewalt said the DFSA has drawn on the experience of other regulators who have taken cautious steps in the rapidly developing area.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.