LICENSED ACTIVITIES

A flexible approach to Virtual Asset regulation

VARA has identiﬁed seven distinct Virtual Asset (VA) activities that span the current spectrum of available VA services. The list of activities is designed to be ﬂexible and evolutionary as the global sector grows and develops in tandem. The industry is encouraged to view this list of activities as a solid foundation that oﬀers room for innovation, rather than a ﬁnite register.

VASPs seeking to oﬀer the below services must apply for and receive a licence from VARA before undertaking VA activities in Dubai.

licensed activities:

Advisory Services Broker-Dealer Services Custody Services Exchange Services Lending And Borrowing Services Management And Investment Services Other VA Activities

List of Activities

A VASP can apply to be licensed for multiple activities and aggregate them under a single overarching licence. Save for Custody Services there is no specific need to segregate an activity and/or demonstrate independence of governance or arms-length association from another.

In the current list of seven activities, Virtual Asset Custody Services is the only activity that is required to be segregated from other Virtual Asset Financial Services licence categories. In this instance, a VA Custodian must be set up as a distinct legal entity with a standalone licence.

Licensed VASPs are prohibited from proprietary trading or trading their Group’s portfolio of assets.

VASPs that are licensed to undertake multiple activities must meet the requirements for each activity in full, and maintain due conformity at all given times.

Any VASP or traditional economy entity seeking to offer the below VA services must apply for and receive a licence from VARA before it can begin VA activities in or from the emirate of Dubai, whether offered to customers that are residents of the emirate, or to global customers where the activity is permissible.

‘Advisory Services’ refers to offering, providing or agreeing to provide a personal recommendation to a client, either upon its request, or on the initiative of the Entity providing the recommendation, in respect of one or more actions or transactions relating to any Virtual Asset.

For more information, download a copy of the Advisory Services Rulebook

SEE VASPS WITH ADVISORY SERVICES ACTIVITY

Any VASP seeking to offer the above services must apply for and receive a licence from VARA before it can begin virtual asset activities in Dubai. No virtual asset activity is ‘exempt’ from regulatory supervision, and hence any virtual asset service or activity including but not limited to that which is offered by DLT service providers may require a VARA licence. Such DLT service providers will have to determine if they are carrying out any virtual asset activity falling within the categories described above.

other Virtual asset activities

Proprietary Trading

VA Proprietary Trading will require a no objection certificate from VARA to conﬁrm that the activity may be undertaken with regulatory oversight without a VA Licence. Additionally, proprietary trading above certain trading volumes is an activity that must be registered with VARA.

To obtain a Propriety Trading NOC, VASPs will need to contact their commercial licensors (Free Zones or DET) to complete their Initial Disclosure Questionnaire.

Virtual Asset Issuance Activities

Issuers of Virtual Assets will have to obtain approval of their whitepaper from VARA under the “VA Issuance Rulebook” before undertaking such activity.

Interested in applying for a VARA Licence?

VASPs seeking a VARA Licence must complete a two-stage application process. Find out more here.

SEE VARA LICENSE PROCESS

Seek further advice on VARA’s Licensing Process

If you wish to learn more about VARA’s licensing process, please fill inour online form and a member of our team will contact you directly.

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