UNITED ARAB EMIRATES Law and Practice Contributed by: Arnold Krutilins and Gabrielle Margerison (nee Lowe), White & Case LLP
These licensed financial activities capture the provi - sion of cross-border payment services.
trade or conversion between virtual assets and fiat currency or one or more virtual assets. “Offshore UAE” The DIFC Various trading platforms and marketplaces are per - missible in the DIFC. In this regard, the DFSA’s Gen - eral Rulebook Module sets out the following regulated activities: • operating an exchange; and • operating an alternative trading system. Operating an exchange means operating a facility which functions regularly and brings together multiple third-party buying and selling interests in investments, in line with its non-discretionary rules in a way that can result in a contract in respect of investments admitted to trading or traded on the facility. DFSA guidance provides that the financial service of operating an exchange only applies in relation to investments. A person wishing to operate a facility for the trading of crypto tokens will, therefore, need to use a multilateral trading facility (MTF) and obtain an endorsement on its licence that permits it to oper - ate an MTF. Operating an alternative trading system means: • operating an MTF; or • operating an organised trading facility (OTF). A person operates an MTF if that person operates a system which brings together multiple third parties buying and selling interests in investments or crypto tokens, in line with its non-discretionary rules, in a way that results in a contract in respect of these invest - ments or crypto tokens. On the other hand, a person operates an OTF if that person operates a system which brings together multiple third parties buying and selling interests in investments, in line with its discretionary rules, in a way that results in a contract in respect of these investments. The ADGM Under the FSRA’s Financial Services and Markets Regulation 2015 (the “FSMR”), operating a trading
6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms “Onshore UAE” The CMA The establishment and operation of trading platforms and exchanges is regulated by the CMA. While the Capital Markets Law is not prescriptive in terms of the type of platforms permitted, the CMA’s glossary of terms defines a market as “a securities and com - modities market licensed in the [UAE] by the [CMA]”. The VARA While the DVAL and its supplementary regulations and Rulebooks are not prescriptive in terms of the types of platforms permitted in the emirate of Dubai in respect of trading virtual assets, the DVAL defines a virtual asset platform as “a centralised or decen - tralised digital platform, managed by a VASP, through which virtual assets are sold, bought, traded, offered, issued, kept and settled and their trading is cleared through the distributed ledger technology”. Furthermore, carrying on the provision of services of exchange between one or more forms of virtual assets is a regulated activity under the DVAL. Exchange ser - vices are defined by the Virtual Asset and Regulated Activities Regulation 2023 as: • conducting an exchange, trade or conversion between virtual assets and fiat currency; • conducting an exchange, trade or conversion between one or more virtual assets; • matching orders between buyers and sellers and conducting an exchange, trade or conversion between virtual assets and fiat currency or one or more virtual assets; or • maintaining an order book in furtherance of con - ducting an exchange, trade or conversion between virtual assets and fiat currency, conducting an exchange, trade or conversion between one or more virtual assets, or matching orders between buyers and sellers and conducting an exchange,
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