UAE Law and Practice Contributed by: Stefan Mrozinski, Gabrielle Margerison (nee Lowe) and Arnold Krutilins, White & Case LLP
• 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 sell - ers 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 conducting an exchange, trade or conver - sion between virtual assets and fiat currency, conducting an exchange, trade or conversion between one or more virtual assets, or match - ing orders between buyers and sellers and conducting an exchange, 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 permissible in the DIFC. In this regard, the DFSA’s General Rulebook Module sets out the following regulated activities: • operating an exchange; and • operating an alternative trading system. Operating an exchange means operating a facil - ity 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 ser - vice 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 operate 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 oper - ates a system which brings together multi - ple 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 con - tract in respect of these investments 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 con - tract in respect of these investments. The ADGM Under the FSRA’s Financial Services and Mar - kets Regulation 2015 (the “FSMR” ), operating a trading platform will constitute the regulated financial activity of “operating an MTF or OTF” . Specifically, operating an MTF or an OTF on which financial instruments or virtual assets are traded are each considered separate regulated activities. Carrying on any other ancillary activi - ties deemed suitable by the FSRA for the MTF or OTF to conduct is also its own regulated finan - cial activity. 6.2 Regulation of Different Asset Classes With the exception of virtual assets regulated separately by the VARA, the application of the UAE’s regulatory regimes are not generally premised on distinctions between asset classes (although certain regulatory rules may apply in respect of a particular asset class), but rather
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