May 7, 2023
Security And Commodities Authority In The UAE
The Securities and Commodities Authority (SCA) in the UAE has announced that they are now accepting license applications from companies that wish to provide virtual asset services. The decision follows the approval of its board, chaired by H.E. Mohammed Ali Al Shorafa, to regulate virtual asset service providers. This is great news for virtual asset brokers, custodians, and platform operators, who now have the opportunity to apply for licenses to operate in the UAE.
However, there are a few things to keep in mind:
- UAE-based companies providing virtual asset services (excluding those licensed to operate in financial free zones – DIFC and ADGM) are required to comply with the regulations outlined in the decision.
- Companies operating in Dubai need to submit their license application to the Virtual Assets Regulatory Authority (VARA) in addition to seeking the SCA’s approval. But not to fear: Uniform procedures are being developed to make the licensing process as easy and quick as possible.
The SCA decision regulating virtual asset platform operators contains nine articles, including Article 3, which prohibits the trading of virtual assets in the UAE unless they are admitted to the official list of virtual assets of the virtual asset platform operators licensed by the SCA and/or VARA. Article 4 sets out the functions of the virtual asset platform operator, while Article 5 provides for the obligations of the operator in seven areas, including operational efficiency, resilience, and compliance.
Under Article 6, the SCA may request any documents or data from the operator of the virtual asset platform, which should be supplied within the specified period. The article also states that the SCA shall perform supervisory, investigative, oversight, and inspection functions with regard to the virtual asset platform, its operator, and all related aspects.
So, if you’re a virtual asset provider, now is the time to apply for your license and comply with the regulations outlined in the decision.