The Financial Services Regulatory Authority, Abu Dhabi Global Market's financial regulator has unveiled six principles to guide its "approach towards virtual asset regulation and oversight."
A 'Basis to Regulatory Cohesion across Jurisdictions'
Abu Dhabi Global Market (ADGM), which is a global financial center and free zone located in the United Arab Emirates, recently revealed six principles to govern virtual asset supervision and regulation. These principles were released by Abu Dhabi Global Market's financial regulator, the Financial Services Regulatory Authority. They are meant to "support engagement with other similar regulatory agencies in the UAE."
Although not legally binding, these principles must be "viewed in conjunction with the detailed detail of our published framework," according to the FSRA. The six principles could serve as the basis for "regulation cohesion across jurisdictions."
The principles not only "provide an accessible view" about the priorities of the FSRA in this area, but also reflect the regulator's risk appetite for regulation.
"Each principle is a declaration by the FSRA of its risk appetite in areas of regulation.
Authorisation, financial crime supervision, enforcement, and international cooperation. These expectations, when viewed in a holistic manner, are calibrated to ensure the right balance between confidence and risk sensitivity, customer protection, and attracting new customers," explained the regulator.
High Authorization Standards
The document that outlines the key attributes of each approach for regulating virtual assets reveals that the FSRA's principle number 1 calls for "a robust, transparent, risk-based regulatory framework." This framework must, on one hand, "introduce a clear Taxonomy defining VAs as commodities within the larger digital asset universe and require the licensing of entities involved in regulated activities using VAs within ADGM."
However, licensed virtual asset entities should have the same regulatory status in ADGM as other licensed entities.
The second principle requires that high standards be maintained when authorizing virtual assets. The FSRA states that virtual assets should be regulated in a way that prevents financial crimes and money laundering. The regulators should also be committed to using enforcement tools when licensed entities are in violation of regulations.
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By: Terence Zimwara
Title: Abu Dhabi Global Market Financial Regulator Unveils Virtual Asset Regulation ‘Guiding Principles’
Sourced From: news.bitcoin.com/abu-dhabi-global-market-financial-regulator-unveils-virtual-asset-regulation-guiding-principles/
Published Date: Wed, 14 Sep 2022 07:30:32 +0000