Recently, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) published guidelines on digital assets in addition to the previous one issued with instructions on ICOs (Initial Coin Offerings) and ITOs (Initial Token Offerings).
The document, entitled “Guidance for Digital Securities activity in ADGM”, will support the development of digital assets and will provide a framework for regulatory action in the country to provide clear and transparent guidance.
These arrangements are strategic to guide the country in the development of this new form of economy, explained Ahmed Ali Al Sayegh, Minister of State and Executive Director of ADGM:
“It is important that we continue to stay ahead of the curve, as a progressive nation and economy, by responding to the dynamic needs of our local environment and anticipating the developments and impact of the global marketplace. As an International Finance Centre, ADGM has been actively playing a strategic role in creating new financial opportunities and initiating unique business propositions that benefit our local businesses and global partners. ADGM’s comprehensive digital asset platform is evident of its innovative and progressive practice on regulations, legislative framework and business engagement.”
The document focuses mainly on initial offerings, listings and trading as well as custody of digital assets, measures that apply to all those who operate in this sector, including exchanges and intermediaries.
A large part of the report is also dedicated to securities and STOs:
“If a digital/virtual token being offered is assessed to exhibit the (economic and legal) features and characteristics of a Security, the FSRA will deem the digital/virtual token (being a “Digital Security”) as a Security pursuant to Section 58(2)(b)6 of FSMR. This approach has been taken by the FSRA to ensure the protection of investors, noting that while a Digital Security may have the characteristics of a Security, this position is not always clear and accordingly requires review by the FSRA”.