The Dubai Financial Services Authority (DFSA) has published the Stock Token Regulation Framework. The Office will accept comments on the proposed rules within 30 days.
The DFSA noted the development of financial technology, as well as the growing interest in share tokens and distributed ledger technology (DLT) in general. Therefore, the department proposed a comprehensive regulatory framework for regulating share tokens, announcing that it is ready to interact on this issue with all interested parties. The DFSA has proposed the following key changes to the regulation of such digital assets:
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Provide retail investors with direct access to share tokens.
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Strengthen security requirements for platforms using DLT and similar technologies to avoid associated risks.
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To oblige the issuers of share tokens to provide detailed documentation about their digital assets so that potential investors have comprehensive information.
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Tighten requirements for services providing digital asset storage services.
The DFSA explained that providing retail investors with direct access to share tokens could be seen as a “departure” from the current model of market-based trading involving intermediaries. The proposed regulation includes implementing appropriate safeguards to protect investors, combat money laundering and terrorist financing, and ensure market integrity and financial stability.
“Clarification of the regulation of stock tokens will pave the way for both their issuers using the latest technology and for firms that are just about to become participants in this market. The DFSA’s goal is to find a balance between digital asset oversight and development, ”said DFSA Executive Director Bryan Stirewalt.
Recall that a year ago, the Japan Stock Token Offering Association (JSTOA) also introduced new rules governing the Stock Token Offering (STO). The Financial Supervision Commission (FSC) of Taiwan began to think about the control of share tokens back in 2019 to provide legal protection for investors and help young firms to raise funds.
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