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Jun 25 2018 onwards

10


The diagram and table below sets out the FSRA's regulatory approach in relation to different types of digital assets.

Category of Digital Assets / Instruments Regulatory Approach
"Security Tokens"

(e.g., virtual tokens that have the features and characteristics of a Security under the FSMR (such as Shares, Debentures, Units in a Collective Investment Fund)).
Deemed to be Securities pursuant to Paragraph 58(2)(b) of FSMR.

All financial services activities in relation to Security Tokens, such as operating primary / secondary markets, dealing / trading / managing investments in or advising on Security Tokens, will be subject to the relevant regulatory requirements under the FSMR.

Market intermediaries and market operators dealing or managing investments in Security Tokens need to be licensed / approved by FSRA as FSP holders, Recognised Investment Exchanges or
"Crypto Assets"

(e.g., non-fiat virtual currencies).

As provided in paragraph 9, this Guidance is focused on Crypto Assets.
Recognised Clearing Houses, as applicable.

Treated as commodities and, therefore, not deemed Specified Investments under the FSMR.

Pursuant to the Spot Crypto Asset Framework, however, market intermediaries (e.g. broker dealers, custodians, asset managers) and Crypto Asset Exchanges dealing in or managing Crypto Assets will need to be licensed / approved by FSRA as OCAB Holders. Only activities in Accepted Crypto Assets will be permitted.
"Utility Tokens" or "Non-Security Tokens"

(e.g., virtual tokens that do not exhibit the features and characteristics of a regulated investment / instrument under the FSMR).
Treated as commodities and, therefore, not deemed Specified Investments under the FSMR.

Unless such Utility Tokens are caught under the definition of Crypto Assets,, spot trading and transactions in Utility Tokens do not constitute Regulated Activities, activities envisaged under a Recognition Order (e.g., those of a Recognised Investment Exchange or Recognised Clearing House), or activities envisaged under the Market Rules (MKT).
Derivatives and Collective Investment Funds of Crypto Assets, Security Tokens and Utility Tokens Regulated as Specified Investments under the FSMR.

Market intermediaries and market operators dealing in such Derivatives and Collective Investment Funds will need to be licensed / approved by FSRA as FSP holders, Recognised Investment Exchanges or Recognised Clearing Houses, as applicable.