The DFSA’s regulatory structure classifies investment tokens as either “a Security Token or a Derivative Token,” as shown in a statement by Emirates news agency WAM.
The report states that the establishment of a new regulatory structure is the first step in the DFSA’s Digital Assets Regime, which is based on the recommendations made in Consultation Paper 138, which was published in March 2021. The draft law solicited public feedback on the DFSA’s plans to regulate Security Tokens.
The Dubai Financial Services Authority has invited members of the general public to provide feedback on proposed regulations for digital currencies classified as security tokens.
The Dubai Financial Services Authority (DFSA) has formed a regulatory regime for asset tokens as part of an attempt to enhance the virtual economic and technical environment while also going to meet market players’ conditions and expectations.
The DFSA is an autonomous organization in Dubai that is in charge of monitoring and trying to regulate financial institutions that would like to continue operating there. It also licences and regulates their goods and services.
The investment token structure is intended to protect investors while also providing legal certainty to market participants. It specifies the types of investor tokens that are allowed and may be mentioned on a digital asset exchange in the Dubai International Financial Centre, and other related details.
The DFSA is also developing plans for unlisted securities that are not covered by the legal regime for investment tokens. Cryptos, utility tokens, and certain cryptos are expected to be among them. In the fourth quarter of this year, the DFSA is set to release a follow-up guidance document.