UAE’s capital markets to be given an ICO impetus
The Emirates Securities and Commodities Authority (ESCA), the United Arab Emirates’ (UAE) domestic securities regulator, is looking to introduce initial coin offerings (ICOs) to bring forth an added impetus to the country’s capital markets, reported Reuters on Monday.
UAE has been in an IPO slump over the past few years following the weak performance of the domestic equity markets and the decline in oil prices. These market conditions have negatively affected the capital generation ability of local businesses; hence, the regulator is now looking towards tokenization.
“The board of the Emirates Securities & Commodities Authority [ESCA] has approved considering ICOs as securities. As per our plan, we should have regulations on the ground in the first half of 2019,” Obaid Saif al-Zaabi, CEO of the country’s securities agency, told Reuters.
The ESCA is in the process of drafting regulations for ICOs with foreign advisors and is looking to integrate the stock exchanges of its two major cities, Abu Dhabi and Dubai into the ICO process to create a trading platform, he added.
He also said that a new law will be implemented in 2019 to further administer the IPOs and that the Ministry of Economy has forwarded a letter to Prime Minister Mohammed bin Rashid Al Maktoum’s office for approval.
In a bid to increase the participation of women in the top management of UAE companies, Al-Zaabi said that a minimum of 20 percent of all company board members should be women.
Only in early September did the ESCA grant cryptocurrencies the status of a ‘security’. During the processing of the aforementioned legislation, the financial watchdog introduced several guidelines to regulate the workings of ICOs due to the volatile nature of virtual currencies.
Furthermore, the Abu Dhabi Global Market released a set of norms in June to keep a check on activities concerning cryptocurrencies. The activities involved in the facilitation of crypto transactions, which include services offered by intermediaries, custodians, wallet providers and trading platforms operating within the regulator’s legislation.
The Financial Services Authority of Dubai, the prime regulator of the city also issued a set of harsh warnings in late 2017 against ICOs and digital currencies.
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