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Abu Dhabi Global Markets Seeks Feedback on Proposed DLT Legislative Framework

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According to reports, the Abu Dhabi Global Markets (ADGM) Registry is seeking feedback on its proposed Distributed Ledger Technology (DLT) legislative framework, with the goal of d

Abu Dhabi Global Markets Seeks Feedback on Proposed DLT Legislative Framework

According to reports, the Abu Dhabi Global Markets (ADGM) Registry is seeking feedback on its proposed Distributed Ledger Technology (DLT) legislative framework, with the goal of disclosure, liquidation, and governance structures. ADGM is an international financial center within the United Arab Emirates (UAE) and has developed a customized licensing system for virtual asset service providers regulated by its financial regulatory authorities.

Abu Dhabi Global Market Registry is seeking feedback on its proposed legislative framework for distributed ledger technology

The Abu Dhabi Global Markets (ADGM) Registry is looking for feedback on its proposed Distributed Ledger Technology (DLT) legislative framework. The objective of this framework is to provide governance structures, disclosure, and liquidation procedures. ADGM is a global financial center in the United Arab Emirates (UAE), and the framework is built to regulate virtual asset service providers (VASPs).

What is ADGM?

Before diving into the legislative framework proposed by ADGM, it is essential to have an understanding of the center itself. ADGM is a self-governed financial center, regulated by its regulatory authorities. The financial center serves as a hub for businesses seeking to venture into the Middle East market. It provides a range of financial services to the business community in areas such as asset management, banking, insurance, and funding startups.

Proposed DLT Legislative Framework

The proposed DLT legislative framework aims to regulate VASPs within ADGM. It seeks to provide a comprehensive legislative framework that covers all aspects related to virtual assets, including governance, disclosure, and liquidation procedures.

Governance

The proposed framework aims to provide a governance structure for VASPs that ensures compliance with regulations and provides transparency to stakeholders. The framework will provide clarity on the roles and responsibilities of each party involved in the governance of virtual assets. The framework is designed to establish trust between VASPs and stakeholders, such as investors and customers, by providing clear operational guidelines that VASPs must follow.

Disclosure

The proposed framework also seeks to provide a comprehensive disclosure framework that covers all aspects of virtual assets. The disclosure requirements will ensure that VASPs provide accurate and reliable information to their stakeholders. This will include information on the nature of the virtual assets being offered and any risks associated with investing in them.

Liquidation Procedures

In the event of a VASP’s insolvency or winding up, the proposed framework provides a liquidation procedure to ensure that stakeholder interests are protected. The framework seeks to provide a clear and predictable process for liquidating virtual assets.

Customized Licensing System

ADGM has developed a customized licensing system for VASPs that provides for the specific regulatory requirements set out in the proposed framework. The licensing system is designed to support VASPs by enabling them to operate in a regulated environment that promotes investor confidence.
The regulatory requirements for VASPs include obtaining a license from ADGM and complying with all regulatory requirements set out in the proposed legislative framework. This includes having adequate governance structures in place, complying with disclosure requirements, and adhering to liquidation procedures.

Conclusion

In conclusion, the proposed DLT legislative framework by the ADGM registry is a significant step forward in the regulation of virtual assets in the UAE. The framework provides a comprehensive legislative framework that covers all aspects related to virtual assets, including governance, disclosure, and liquidation procedures. It is designed to establish trust between VASPs and stakeholders and provide a regulated environment that promotes investor confidence. The customized licensing system developed by ADGM is an excellent support system for VASPs seeking to operate in the UAE.

FAQs

Q1. What is ADGM?
A1. ADGM is a self-governed financial center that serves as a hub for businesses seeking to venture into the Middle East market.
Q2. What is the proposed DLT legislative framework?
A2. The proposed DLT legislative framework aims to provide governance structures, disclosure, and liquidation procedures for virtual asset service providers (VASPs).
Q3. What are the regulatory requirements for VASPs?
A3. The regulatory requirements for VASPs include obtaining a license from ADGM, having adequate governance structures in place, complying with disclosure requirements, and adhering to liquidation procedures.

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