The Dubai Financial Services Authority is proposing new regulations for security tokens in an effort to build and contour a standardized framework for crypto laws. The DFSA has thus called on the public to submit comments regarding its newly proposed security token regulations.
Members of the public will have 30 days to comment on the changes and requirements included in the new regulations, a phase that is part of the DFSA’s way of establishing the “Framework for Regulating Security Tokens.”
The purpose of Dubai’s security token infrastructure is to bring clarity regarding three major areas of interest. The first one focuses on creating a regulated framework for companies to operate under and for trading and offering digital securities to investors.
In order to protect retail investors, the DFSA has also turned quality control protocols into a priority, adding new strict disclosure requirements that security token issuers will have to comply with in their prospectuses.
Lastly, the DFSA has also prioritized the support services that are associated with security tokens, which include asset custody providers and advisory services.
Regarding the new proposed regulations, DFSA CEO Bryan Stirewalt stated the following:
“Our proposals promote and facilitate innovation, while also protecting consumers, addressing market integrity and mitigating ML/FT and other risks.”
He added that “The proposal for regulation of security tokens is a key milestone in paving a clear and certain path for those issuers who wish to raise capital in or from the DIFC using DLT and similar technology. And for those firms who intend to be involved in this market, by conducting or providing financial services.”
As a result of this public consultation, the DFSA may actually proceed to craft a law proposal since the regulatory agency plans to publish laws for “exchange tokens” and utility tokens later this year, according to Cointelegraph.