Part IV – Licensing
A. Licensing Requirements
1. Requirement to hold a Licence.
a. All Entities wishing to carry out one or more VA Activities in the Emirate must seek authorisation from VARA prior to conducting any VA Activity. b. All Entities shall apply for, obtain and maintain a Licence issued by VARA in order to be permitted to carry out each VA Activity that it will conduct in the Emirate.
2. Licensing process. All Entities seeking a Licence from VARA shall adhere to the licensing process as prescribed by VARA from time to time when applying for the Licence. 3. Requirement to meet licensing conditions. VASPs shall comply with any and all licensing conditions as communicated by VARA in its Licence or otherwise from time to time, which shall include but not be limited to compliance with all Regulations, Rules and Directives. 4. Activities outside of the Emirate. If a VASP carries out any VA Activity for which it is Licensed by VARA to carry out in the Emirate in any jurisdiction outside of the Emirate, it shall comply with all Regulations, Rules and Directives in respect of such VA Activity carried out in such other jurisdiction as a minimum standard. For the avoidance of doubt, VASPs are obligated to meet the higher of the two regulatory standards at all times. 5. Professional Exemption.
a. Duly registered [i] practising lawyers; [ii] accountants; and/or [iii] other professionally licensed business consultants that carry out any VA Activity in a manner that is wholly incidental to their professional practice do not need a Licence, provided that they—
i. remain at all times appropriately authorised by a competent professional body to operate in the Emirate; and ii. maintain professional indemnity insurance as applicable to their profession. [the Professional Exemption].
b. VARA has sole and absolute discretion at any time to decide whether an Entity has appropriately relied on this Professional Exemption in respect of any VA Activities it has carried out.
6. Exempt Entities.
a. Exempt Entities shall not be subject to the requirements in Regulations IV.A.1-4, provided that such Exempt Entities must—
i. notify VARA and obtain confirmation of its Exempt Entity status; ii. in such instance, obtain a no-objection confirmation from VARA prior to carrying out any VA Activities in the Emirate; and iii. comply with all requirements of these Regulations, Rules, Directives and other conditions notified to it by VARA as a condition of providing such no-objection confirmation.
b. VARA has sole and absolute discretion at any time in deciding whether an Entity is an Exempt Entity and/or granting any no-objection confirmation under Regulation IV.A.6.a above.
7. Mandatory registration for large proprietary traders.
a. Any Entity in the Emirate that actively invests its own portfolio in Virtual Assets at or above USD 250,000,000 equivalent value of Virtual Assets during any rolling thirty [30] calendar days period, must register with VARA, in accordance with the registration process prescribed by VARA from time to time, prior to investing at, or in no event later than three [3] Working Days of having invested, such volume. b. Registration under Regulation IV.A.7.a does not permit any Entity to carry out any VA Activity[ies] in the Emirate and/or constitute any authorisation or Licence from VARA for any business or activities that Entity carries out and Regulations III and IV.A.1 shall apply at all times. c. An Entity investing its own portfolio does not permit accepting or trading Virtual Assets belonging to another Entity.
8. Voluntary registration for other market participants.
a. Any Entity seeking to obtain a commercial or free zone licence in the Emirate to carry out the following business activities may voluntarily register with VARA in accordance with the registration process prescribed by VARA from time to time—
i. providers of technology services relating to or utilising Distributed Ledger Technology to other businesses; or ii. Entities that actively invest their own portfolio in Virtual Assets.
b. Registration under Regulation IV.A.8.a does not permit any Entity to carry out any VA Activity[ies] in the Emirate and/or constitute any authorisation or Licence from VARA for any business activities that Entity carries out and Regulations III, IV.A.1 and IV.A.7.a shall apply at all times.
B. VARA’s Licensing and Authorisation Powers
1. Granting of Licences.
a. VARA may, in its sole and absolute discretion, grant a Licence for a VASP to carry out one or more VA Activities to which a licensing application relates, having regard to the information provided during the licensing process along with any other information VARA deems relevant. b. In respect of each granted Licence, VARA shall specify the permitted VA Activities, described in such a manner as VARA considers appropriate. c. VARA may—
i. incorporate in the Licence such limitations and stipulations as it considers appropriate, for example, circumstances in which a VA Activity may, or may not, be carried on; ii. specify a narrower or wider description of a VA Activity than that to which a licensing application relates; and/or iii. grant a Licence for carrying on a VA Activity only for a specified time.
d. In determining whether or not to grant a Licence, VARA may have regard to any judgment, opinion, or actions taken by any other regulator or authority, inside or outside of the Emirate, which VARA deems to be relevant to such licensing application.
2. Variation, suspension, or revocation of Licences.
a. Power to vary, suspend or revoke Licences. VARA may, in its sole and absolute discretion—
i. vary a Licence in any way, including but not limited to, by adding a VA Activity, removing a VA Activity or varying the description of a VA Activity, or by varying any limitations which apply to such Licence; ii. revoke or suspend all, or any part, of a Licence—
1. on any ground on which it may refuse to issue a Licence; 2. for a material violation of any law, Regulation, Rule or Directive; 3. for Good Cause; 4. if the VASP is Insolvent or subject to Insolvency Proceedings; or 5. for failure of the VASP to pay a judgment, made by any court, within or outside the UAE, within thirty [30] calendar days after the judgment becomes final or otherwise payable by the VASP.
b. Suspension. In the event VARA suspends a Licence under Regulation IV.B.2.a.ii, it shall prescribe the period for which such Licence is suspended, and in turn, this shall be communicated to the VASP. Such VASP may not re-commence any VA Activity[ies] subject to such suspension without prior approval from VARA to do so, regardless of whether the period communicated has expired, unless the suspension notice from VARA explicitly provides for resumption by default upon completion of the stipulated period. c. Preservation of powers. Nothing in these Regulations shall be construed as limiting any power granted to VARA under any other provision of the Dubai VA Law, including any power to investigate possible violations of laws, Regulations, Rules or Directives, or to impose penalties, or take any other action, against any Entity for violation of such laws, Regulations, Rules or Directives.
3. Imposition of further requirements by VARA.
a. Where an Entity has applied to VARA for a Licence, or a variation of a Licence, VARA may impose on such Entity additional requirements as it considers appropriate including, but not limited to, in the following circumstances—
i. the Entity is failing, or is likely to fail, to satisfy the licensing conditions; ii. the Entity has contravened any applicable laws, Regulations, Rules or Directives; or iii. it is desirable for VARA to exercise its power to further one or more of its objectives.
4. Authorisation and supervision fees.
a. VARA may charge an Entity seeking to apply for a Licence, or any other authorisation from VARA, a fee for processing such application. If an application is denied or withdrawn, no fees shall be refunded and/or refundable. Such application fees will be applicable per application. b. Any Entity who has been granted a Licence, any other approval or is otherwise subject to supervision by VARA, will be charged applicable fees by VARA for such supervision. c. The fees set out in Schedule 2 of these Regulations, as may be amended from time to time, shall apply to all VASPs.