Protecting investors’ data and information is the most important requirement for granting licenses to conduct activities in the “sector”

"Securities" supervises "virtual assets" in the country

The Authority affirmed that no person may engage in virtual asset activities without obtaining its approval.

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The Securities and Commodities Authority stated that, according to Cabinet Resolution No. (111) of 2022, the responsibility for supervising and regulating the virtual assets sector in the country has been assigned to the authority, with the aim of developing the legislative system for the sector and its related activities and service providers, in a way that guarantees the rights and duties of all parties. participate in it.

virtual assets

And the “Securities” stated in a statement, yesterday, that the Cabinet’s decision defined virtual assets as “a digital representation of the value that can be traded or digitally transferred, and can be used for investment purposes, and does not include digital representations of paper currencies, securities, or other funds.” ».

The provisions of the decision apply to all transactions related to virtual assets that take place for investment purposes within the country, including free zones, and its provisions do not apply to virtual assets that are used for payment purposes, as they are subject to the jurisdiction of the Central Bank, nor do they apply to financial free zones.

Sector regulation

The decision aims to regulate the virtual assets sector in the country and its related activities and service providers, to ensure the protection of investors' funds in virtual assets from illegal practices.

The decision also aims to support the country's efforts to provide an attractive investment, economic and financial environment for international companies and institutions operating in the virtual assets sector to provide their services in the country, in addition to ensuring that financial institutions operating in the virtual assets sector adhere to the requirements of confronting money laundering crimes, combating the financing of terrorism and financing illegal organizations.

Licensing requirements

The decision included the general framework for regulating virtual assets, including the minimum requirements for licensing and doing business, provided that the authority is responsible for issuing detailed decisions for licensing and the mechanism for carrying out tasks related to activities in the country.

The protection of investor data and information is the most important requirement for professional licensing to practice virtual asset activities.

The decision prohibits any person from practicing virtual asset activities in the country, without obtaining approval and a license from the Securities and Commodities Authority or the local licensing authorities - as the case may be - and provided that he takes the country as his headquarters to conduct his business, according to one of the legal forms approved by the local authorities concerned with licensing. commercial.

Service Providers

According to the Cabinet’s decision, the authority will supervise and control the activities of virtual assets, its service providers, and its transactions that take place within the country, including free zones, in addition to issuing decisions regulating it and licensing its service providers and their work mechanisms, such as the virtual assets platform operator, the virtual assets broker, and the safe custodian of virtual assets, and verify their compliance with the application of the legislation in force in the country, including the protection of personal data.

coordination

In addition, the authority is responsible for issuing the necessary instructions and guidelines in coordination with the concerned authorities to establish a mechanism for evaluating and monitoring virtual asset service providers, and the procedures and measures that must be taken regarding suspicious transactions that take place in violation of the provisions of Federal Decree-Law No. (20) of 2018 regarding countering money laundering crimes. Funds, combating the financing of terrorism and financing illegal organizations, its amendments, its executive regulations, the decisions issued pursuant to it, the legislation in force in the country and international requirements, in addition to educating and educating investors about the investment sector in virtual assets and its risks.

 powers and fines

Cabinet Resolution No. (111) of 2022 granted the Securities and Commodities Authority many powers, including preventing any natural person from engaging in any tasks or businesses related to virtual assets without being approved by the authority, in addition to stopping any virtual asset service providers from Practicing their activities or revoking their license, as well as stopping the process of listing or trading virtual assets, and stopping working on the technologies used by service providers.

It also granted the authority to stop any activity that is practiced without a license, to stop or prevent the operation of the virtual assets platform, and to impose a fine not exceeding 10 million dirhams, in addition to imposing a financial fine equal to the value of the profits obtained from the violation or the loss that was avoided, and to refer the violator of the provisions of the decision to the prosecution. the public.

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