The Financial Services Regulatory Authority (FSRA), the financial regulator for the Abu Dhabi global market, recently issued six principles to guide its “approach to the regulation and supervision of virtual assets.” While not legally binding, according to the FSRA, the principles should be “viewed as complementary to the comprehensive details of the published framework.”
basis for cross-jurisdictional regulatory cohesion”
Abu Dhabi Global Markets (ADGM), a financial center and global free zone based in the United Arab Emirates (UAE), recently issued six guiding principles for the regulation and supervision of virtual assets. The principles were issued by its financial industry regulator, the Financial Services Regulatory Authority (FSRA), and are intended to “support engagement with other like-minded regulators within and outside the UAE.”
While not legally binding, the principles, according to FSRA, must be “viewed as complementary to the comprehensive details of the published framework.”
According to regulators, the six principles may serve as a basis “for regulatory cohesion across jurisdictions.”
In addition to “plainly stating” the FSRA’s priorities in this area, the principles also indicate the regulator’s risk appetite in areas relevant to regulation.
“Each Principle is a declaration of the FSRA’s risk appetite in the areas of regulation, licensing, financial crime, supervision, enforcement, and international cooperation. The regulator explains that “taken as a whole, these expectations are calibrated to ensure the right balance of confidence in our ecosystem, risk sensitivity, customer protection, and attracting new entrants.”
High Certification Standards
Meanwhile, the same framework should give licensed virtual asset entities “the same regulatory status within the ADGM as other licensed entities.”
On the other hand, the second principle requires that high standards be maintained when granting licenses. The prevention of financial crime and money laundering are also important factors that should guide the regulation of virtual assets, the FSRA argues. A commitment to use enforcement measures when licensed operators violate regulations is another principle that should guide regulators.
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