«Securities»: Prohibition of practicing any activity of digital products without a license

The Securities and Commodities Authority (SCA) has released a draft of the “Decision Regulating Virtual Asset and Digital Product” and related amendments, in the rules booklet for financial activities on its website, for the purpose of receiving comments until December 27.

The authority stated that the version presented on the website is a preliminary draft, and some of the provisions contained therein may be amended upon issuance, noting that the draft resolution included 16 articles.

Effectiveness of the decision

According to the draft, the “Securities” prohibited any natural or legal person from engaging in any activity related to the digital product, including the virtual asset and business related to any of them, without obtaining a license or approval from the Authority.

In the draft decision, the authority stated that the provisions of this decision apply to: virtual assets for investment purposes, offering, issuance, registration, listing, trading, settlement and clearing of the digital product, as well as digital service providers.

She added that the provisions of the decision do not apply to virtual assets for investment purposes issued by the federal government or local governments, government institutions and bodies, or companies wholly owned by any of them, nor do they apply to virtual assets for payment purposes, and virtual service providers for payment purposes subject to the Central Bank.

virtual assets

The authority indicated that virtual assets are a digital product that is issued, listed, preserved, traded, and settled and cleared of its trades, through the digital platform in the market.

The “Securities”, the issuer wishing to issue virtual assets in the country, has made four requirements: that the value represented by the virtual assets be in accordance with the general system and the legislation in force in the country, and that the digital representation of virtual assets does not include a financial product or paper currency Fiat, obtaining the approval of the market in which the virtual assets are to be listed in accordance with its terms, and finally, promptly disclosing to investors or owners of virtual assets any material changes to those assets.

digital product

She explained that those wishing to register the digital product must submit an application for registration to the Authority before listing it from the legally authorized person according to the prepared form, and submit documents that prove the completion of the offering and issuance process within the country, in accordance with the Authority’s decisions, and specify the type of digital product that will be listed and circulated through the platform. The digital platform, the identification of the digital platform, and the payment of the fee prescribed by the authority, provided that the authority issues its decision within 20 days to approve or reject the application.

She indicated that the digital product may be listed and traded on more than one digital platform, and trading is done through a digital intermediary, and the investor may also appoint a digital custodian.

Violation of provisions

The authority warned that in the event of a violation of the provisions of this decision, it may stop the offering, issuance or subscription process for the digital product, cancel the investors' subscriptions, and oblige the concerned parties to refund the subscribers' sums and any proceeds resulting from them.

She stressed that the authority, in the event of a violation of the provisions of this resolution, decisions, circulars, or regulations issued pursuant to it, has the right to impose penalties represented in issuing a warning and imposing a fine not exceeding 100,000 dirhams, and the authority has the right to refer the violator of the provisions of the law to the Public Prosecution.

Follow our latest local and sports news and the latest political and economic developments via Google news