VA Management and Investment

Services Rulebook
7 February 2023

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority
Contents
INTRODUCTION .................................................................................................................................................................... 3

I. PART I – POLICIES, PROCEDURES AND PUBLIC DISCLOSURES..................................................... 4

A. Policies and procedures ......................................................................................................................................................... 4

B. Public disclosures...................................................................................................................................................................... 4

II. PART II – VA MANAGEMENT AND INVESTMENT SERVICES RULES ........................................... 6

A. Client suitability ......................................................................................................................................................................... 6

B. Staff competency ...................................................................................................................................................................... 6

C. Verification of information .................................................................................................................................................. 7

D. Impermissible activities ......................................................................................................................................................... 7

E. Client reporting & valuation................................................................................................................................................ 8

F. Fees and charges ....................................................................................................................................................................... 8

G. Marketing ...................................................................................................................................................................................... 8

H. Management practices........................................................................................................................................................... 9

I. Receipt and transmission of orders ................................................................................................................................ 9

J. Risk management and due diligence .............................................................................................................................. 9

K. Client Agreements................................................................................................................................................................. 10

SCHEDULE 1 – DEFINITIONS........................................................................................................................................12

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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Introduction

The Dubai Virtual Assets Regulatory Authority [VARA] was established and authorised by Law No. [4]
of 2022 Regulating Virtual Assets in the Emirate of Dubai [Dubai VA Law] to regulate Virtual Asset
Service Providers [VASPs].

This VA Management and Investment Services Rulebook is issued pursuant to, and forms part of, the
Virtual Assets and Related Activities Regulations 2023 [the Regulations] issued by VARA and applies
to all VASPs Licensed by VARA to carry out VA Management and Investment Services in the Emirate.

This VA Management and Investment Services Rulebook applies in addition to all other requirements in
the Regulations as may be in force from time to time. As such, VASPs Licensed by VARA to carry out VA
Management and Investment Services must also comply with the following Rulebooks applicable to all
VASPs:

1. Company Rulebook;
2. Compliance and Risk Management Rulebook;
3. Technology and Information Rulebook;
4. Market Conduct Rulebook; and
5. All Rulebooks specific to the VA Activities that a VASP is Licensed by VARA to carry out.

Where a VASP is Licensed by VARA to carry out other VA Activities in the Emirate in addition to VA
Management and Investment Services, it must comply with all Rulebooks which apply to those other VA
Activities. Unless otherwise stated, the Rules in VA Activity specific Rulebooks apply cumulatively for
each VA Activity a VASP carries out.

Capitalised terms in this VA Management and Investment Services Rulebook have the meanings ascribed
to them in the Regulations or as otherwise provided in Schedule 1.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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I. Part I – Policies, Procedures and Public Disclosures
A. Policies and procedures
1. In addition to all other requirements in the Regulations and Rulebooks, VASPs providing VA
Management and Investment Services shall establish, implement and enforce appropriate
written internal policies and procedures relating to the following—
a. the ability of clients to have access to and withdraw their Virtual Assets including, but
not limited to, during periods of high uncertainty and/or extreme volatility;
b. their assessment of client suitability for relevant products or services, including but not
limited to the nature, features, costs and risks of investment services, Virtual Assets or
other financial instruments selected for their clients, while taking into account cost and
complexity;
c. how they ensure all Staff providing VA Management and Investment Services to clients
are sufficiently competent in accordance with Rule II.B.1 of this VA Management and
Investment Services Rulebook; and
d. such other policies and procedures as VARA may require from time to time.
2. VASPs providing VA Management and Investment Services shall assess and, in any case, at least
yearly review the effectiveness of their policies and procedures and take appropriate measures
to address any deficiencies.

B. Public disclosures
1. VASPs providing VA Management and Investment Services shall publish on their website in a
prominent place or make available by other publicly accessible means—
a. a detailed description of any actual or potential conflicts of interest arising out of their
activities, and how these are managed;
b. their policies and procedures relating to data privacy, whistleblowing and handling of
client complaints;
c. a statement as to the ability of clients to have access to and withdraw their Virtual
Assets, particularly in times of extreme volatility;

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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 d. a statement as to the VASP’s arrangements for the protection of clients’ assets held by
the VASP and how it determines uses of client Virtual Assets including but not limited
to a detailed description of such uses;
e. a statement as to how they protect client Virtual Assets from counterparty risk;
f. a statement as to how in the course of the provision on VA Management and Investment
Services, client Virtual Assets are used and how clients’ interests in respect of those
Virtual Assets are thereby respected;
g. a statement explaining that client Virtual Assets used by the VASP in the course of the
provision of VA Management and Investment Services may be at risk, including the types
and nature of such risks, and a statement on the likelihood and severity of any losses
which may be suffered;
h. a statement in relation to order execution by the VASP;
i. a statement as to how liquidity risk is managed; and
j. such other information as VARA may require from time to time.
2. Other disclosable matters. To the extent permissible under applicable laws, VASPs providing VA
Management and Investment Services shall publish on their website or by other publicly
accessible means—
a. details of any past convictions or prosecutions of any member[s] of their Senior
Management or Board, whether before the courts of the UAE or the courts of another
jurisdiction; and
b. any such other information relating to their business or activities as VARA may
reasonably require.
3. The disclosure requirements set out in this Rule I.B of this VA Management and Investment
Services Rulebook are in addition to all disclosures required under the Market Conduct Rulebook
and to all notifications to VARA required under the Compliance and Risk Management Rulebook.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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II. Part II – VA Management and Investment Services Rules
A. Client suitability
1. VASPs providing VA Management and Investment Services shall only provide such services
regarding Virtual Assets to clients for which they are suitable.
2. Where VASPs provide VA Management and Investment Services which include a personal
recommendation to a client, they shall consider the following factors at a minimum in respect of
that client—
a. knowledge and experience in investing in Virtual Assets;
b. investment objectives, including but not limited to risk tolerance, time horizon and
venues through which they can acquire Virtual Assets; and
c. financial circumstances including, but not limited to, their ability to bear sudden and
significant losses or the proportion of their net worth which is invested in Virtual Assets.
3. VASPs providing VA Management and Investment Services shall collect all necessary
information from clients for the purpose of assessing relevant factors in accordance with
Rule II.A.1 and Rule II.A.2 of this VA Management and Investment Services Rulebook, depending
on the nature of the service and take all reasonable steps to ensure such information is accurate
and up-to-date. All such information shall be maintained for at least eight [8] years.
4. To the extent Rule II.A.2 of this VA Management and Investment Services Rulebook is applicable,
VASPs shall specify how the services are appropriate for a client by reference to the factors
assessed by the VASP in accordance with Rule II.A.2 of this VA Management and Investment
Services Rulebook.

B. Staff competency
1. In addition to all requirements in the Company Rulebook, VASPs providing VA Management and
Investment Services shall ensure all of their Staff are knowledgeable, competent and suitably
trained given the nature of their role. In assessing Staff competency, VASPs shall consider the
following factors at a minimum in the context of the role of the Staff member concerned—
a. academic, professional and industry qualifications;

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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 b. experience in the Virtual Assets sector, including but not limited to hands-on working
experience acquired through their employment by Entities carrying out activities similar
to VA Activities outside of the Emirate;
c. whether they have a good understanding of the VARA regulatory framework, including
but not limited to the Regulations, Rules and Directives governing the provision of VA
Management and Investment Services; and
d. industry standards as may be applicable to the Virtual Assets sector from time to time.

C. Verification of information
1. VASPs providing VA Management and Investment Services shall not provide statements,
promises, forecasts or other types of information which they know or suspect to be misleading,
false or deceptive or which they should have reasonably known to be misleading, false or
deceptive at the time of making such statement, promise or forecast.
2. Prior to making any statement, promise or forecast, VASPs providing VA Management and
Investment Services shall verify factual information against appropriate and reliable source
materials and shall use all reasonable endeavours to verify the continued accuracy of such
information.

D. Impermissible activities
1. VASPs shall not authorise or permit rehypothecation of Virtual Assets for which they provide
VA Management and Investment Services unless they have explicit prior consent from the client
to do so.
2. VASPs providing VA Management and Investment Services shall only use or exercise authority
relating to a Virtual Asset based on valid authorisation and/or specific instructions from the
client.
3. Virtual Assets of a client used by a VASP in the course of, or in connection with, the provision of
any VA Management and Investment Services shall be held on behalf of the client unless the
Client Agreement expressly states otherwise.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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E. Client reporting & valuation
1. VASPs providing VA Management and Investment Services shall, at least monthly, provide to
each client a written statement containing the following information—
a. the total value of Virtual Assets in a client’s account;
b. all transactions entered into between the VASP and the client in the reporting period;
and
c. the change in amount and valuation of Virtual Assets in a client’s account [both total
and during the reporting period].
2. VASPs providing VA Management and Investment Services shall ensure that all assets under
management are subject to ongoing independent valuation.
3. VASPs shall have comprehensive and well documented valuation policies and procedures in place
to ensure the production of timely and accurate valuation in accordance with Rule II.E.1 of this
VA Management and Investment Services Rulebook.

F. Fees and charges

1. No payment may be made, or benefit given, to the VASP out of any Virtual Assets under its
management, whether by way of fees for its services, reimbursement of expenses or otherwise,
unless it is permitted by the Client Agreement and the Client Agreement specifies how it will be
calculated, accrued, and when it will be paid.
2. VASPs must not introduce a new category of fees for their services or make any increase in the
current rate or amount of its fees payable out of any Virtual Assets under its management unless
the VASP has given not less than ninety [90] calendar days’ written notice of that introduction
or increase and of the date of its commencement to its clients.

G. Marketing
1. VASPs providing VA Management and Investment Services shall not represent in any Marketing
that their services involve the distribution of “staking” rewards in relation to any DLT with a
“proof-of-stake” consensus mechanism or any other similar protocol-based rewards to clients,
unless the payments actually made to clients by the VASP directly originate from such “staking”
rewards or other similar protocol-based rewards.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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H. Management practices
1. When providing VA Management and Investment Services in respect of Virtual Assets on behalf
of clients, VASPs shall act in the best interests of their clients at all times. Factors that VASPs
may consider when assessing a client’s best interests may include, but are not limited to client
suitability, the price of Virtual Assets, costs, speed, likelihood of execution and settlement, size,
nature, conditions of custody, and such other conditions as are relevant to the management of
Virtual Assets, provided that the VASP must act in accordance with any specific instructions
provided by the client.

I. Receipt and transmission of orders

1. VASPs shall establish and implement procedures and arrangements for the prompt and proper
transmission of client’s instructions in respect of Virtual Assets for which VA Management and
Investment Services are provided.
2. VASPs shall not receive any remuneration, discount or other benefit for routing clients’ orders
to a particular trading platform or VASP in the course of the provision of VA Management and
Investment Services unless disclosed in the Client Agreement and the VASP has obtained valid
acceptance in accordance with applicable laws.
3. VASPs shall not misuse information relating to clients’ Virtual Assets and their management
thereof.

J. Risk management and due diligence

1. In addition to all requirements in the Company Rulebook, VASPs shall ensure that liquidity risk
and market risk are each monitored and tested regularly, and appropriate measures put in place
as required to address any such risk in a prompt manner.
2. All such risk management and due diligence must be regularly audited by an independent third
party and provided to VARA upon request.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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K. Client Agreements
1. In addition to all requirements in the Market Conduct Rulebook, Client Agreements for VA
Management and Investment Services shall set out the following, to the extent applicable—
a. description of Virtual Assets in-scope of VA Management and Investment Services that
are sufficient to identify them;
b. the respective rights of the VASP, the client and any other Entity involved in the VA
Management and Investment Services in respect of Virtual Assets that are the subject
of the Client Agreement, including in respect of staking;
c. how and when any proceeds are paid or payable, or in the case of variable proceeds, how
they are calculated and how the proceeds may vary and how such variations will be
communicated by the VASP to the client;
d. whether or not Virtual Assets of a client used by a VASP in the course of, or in connection
with, any VA Management and Investment Services, shall be held on behalf of the client;
e. the consent of the client shall be clearly obtained in accordance with all applicable laws
for the use of any Virtual Assets used in the course of the provision of VA Management
and Investment Services by the VASP;
f. any right of the client to withdraw any Virtual Assets held by the VASP;
g. a statement explaining that client Virtual Assets used by the VASP in the course of the
provision of VA Management and Investment Services may be at risk, including the types
and nature of such risks, and a statement on the likelihood and severity of any losses
which may be suffered;
h. any rights of the VASP to vary the terms of the Client Agreement;
i. any rights of the VASP and the client to terminate the Client Agreement and the
consequences of termination;
j. any terms relating to any fluctuation in value of the Virtual Assets to which the Client
Agreement relates;
k. consequences of any event of default;
l. an explanation of the risks the client may be exposed to;
m. full details of the VASP’s client complaints procedure; and

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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n. whether the VASP receives any remuneration, discount or other benefit for routing
clients’ orders to a particular trading platform or VASP in the course of provision of VA
Management and Investment Services.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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Schedule 1 – Definitions

Term Definition
“Board” has the meaning ascribed to it in the Company Rulebook.
“Client Agreements” has the meaning ascribed to it in the Market Conduct Rulebook.
“Company Rulebook” means the Company Rulebook issued by VARA pursuant to the
Regulations, as may be amended from time to time.
“Compliance and Risk means the Compliance and Risk Management Rulebook issued by
Management Rulebook” VARA pursuant to the Regulations, as may be amended from time
to time.
“Directive” has the meaning ascribed to it in the Regulations.
“Distributed Ledger has the meaning ascribed to the term “Distributed Ledger
Technology” or “DLT” Technology” in the Dubai VA Law.
“Dubai VA Law” means Law No. [4] of 2022 Regulating Virtual Assets in the
Emirate of Dubai, as may be amended from time to time.
“Emirate” means all zones across the Emirate of Dubai, including Special
Development Zones and Free Zones but excluding the Dubai
International Financial Centre.
“Entity” means any legal entity or individual.
“Licence” has the meaning ascribed to it in the Regulations.
“Licensed” means having a valid Licence.
“Market Conduct Rulebook” means the Market Conduct Rulebook issued by VARA pursuant to
the Regulations, as may be amended from time to time.
“Marketing” has the meaning ascribed to it in Administrative Order No. [01] of
2022: Relating to Regulation of Marketing, Advertising and
Promotions Related to Virtual Assets.
“Regulations” means the Virtual Assets and Related Activities Regulations 2023,
as may be amended from time to time.
“Rule” has the meaning ascribed to it in the Regulations.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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Term Definition
“Rulebook” has the meaning ascribed to it in the Regulations.
“Senior Management” has the meaning ascribed to it in the Company Rulebook.
“Staff” has the meaning ascribed to it in the Company Rulebook.
“Technology and Information means the Technology and Information Rulebook issued by VARA
Rulebook” pursuant to the Regulations, as may be amended from time to time.
“UAE” means the United Arab Emirates.
“VA Activity” means the activities listed in Schedule 1 of the Regulations, as may
be amended VARA from time to time.
“VA Management and has the meaning ascribed to it in Schedule 1 of the Regulations.
Investment Services”
“VA Management and means this VA Management and Investment Services Rulebook
Investment Services issued by VARA pursuant to the Regulations, as may be amended
Rulebook” from time to time.
“VARA” means the Dubai Virtual Assets Regulatory Authority.
“VASP” means an Entity authorised by VARA to conduct VA Activity[ies] in
the Emirate.
“Virtual Asset” or “VA” has the meaning ascribed to it in the Dubai VA Law.

‫ ﺳُﻠطﺔ ﺗﻧظﯾم اﻷﺻول اﻻﻓﺗراﺿﯾﺔ‬- ‫ اﻹﻣﺎرات اﻟﻌرﺑﯾﺔ اﻟﻣﺗﺣدة‬،‫ دﺑﻲ‬9292 :‫ﺻﻧدوق ﺑرﯾد‬[email protected]
[email protected] - PO Box 9292, Dubai, UAE - Virtual Assets Regulatory Authority

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