Part I – Approval Requirements
A. Interpretation
1. “Asset-Referenced Virtual Assets” or “ARVAs” has the meaning ascribed to it in Schedule 2 – Definitions of the VA Issuance Rulebook. 2. “Income” has the meaning ascribed to it in Schedule 2 – Definitions of the VA Issuance Rulebook. 3. “Reference Assets” means, in relation to an ARVA, the RWA and/or Income the ARVA represents or purports to represent, as approved by VARA. 4. “Reserve Assets” means, for the purposes of these ARVA Rules, the asset or assets maintained in accordance with Rule III.C of these ARVA Rules and as approved by VARA. Reserve Assets are not Client Money or Client VAs, as defined in the Compliance and Risk Management Rulebook. 5. “RWA” has the meaning ascribed to it in Schedule 2 – Definitions of the VA Issuance Rulebook.
B. General Requirements for VARA Approval
1. As stated in Rule I.C.1 of the VA Issuance Rulebook, the issuance of an ARVA is a Category 1 VA Issuance and as such is a VA Activity. In addition to compliance with these ARVA Rules, and all other Regulations, Rules and Directives as communicated by VARA in its Licence or otherwise from time to time, all Entities in the Emirate seeking to issue an ARVA will be required to comply with the following Rulebooks—
a. Company Rulebook; b. Compliance and Risk Management Rulebook; c. Technology and Information Rulebook; d. Market Conduct Rulebook; and e. VA Issuance Rulebook.
2. Approval of each ARVA. All VASPs Licensed by VARA to carry out Category 1 VA Issuance must obtain approval from VARA prior to issuing each ARVA. 3. Approval conditions. VARA may, in its sole and absolute discretion, impose conditions on any approvals granted for the issuance of an ARVA by a VASP, including, but not limited to—
a. segregation of the VASP's business or operations in relation to VA issuances and any other VA Activities (or other businesses and activities, if applicable) by implementing and strictly enforcing policies and procedures; b. obtaining and maintaining all necessary regulatory approvals and licences for activities involving the RWA and/or Reserve Assets, which must be carried out for the normal functioning of the ARVA, or otherwise provide further information to demonstrate ongoing compliance with all applicable laws and regulations; c. provision of further information to demonstrate the VASP's ability to comply with any Regulation, Rule or Directive; and/or d. any additions or modifications to requirements set out in any Regulation, Rule and/or Directive.
4. Applicable Rules. On receiving approval to issue an ARVA by VARA, a VASP will be required to comply with all Rules or requirements that VARA may impose on the VASP as a condition and ongoing requirement for any approval. VARA may impose Rules in addition to, or disapply any of, the Rules in these ARVA Rules depending on the considerations which it deems relevant to the nature of the ARVA being issued and/or the VASP. Any additional Rules imposed on a VASP may be requirements equivalent or similar to those contained in the Regulations, Rulebooks or Directives.
C. Significant ARVA Issuers
1. VARA may, in its sole and absolute discretion, designate any VASP Licensed to issue an ARVA as a Significant ARVA Issuer at the time of granting a Licence or anytime thereafter. 2. In designating a VASP as a Significant ARVA Issuer, VARA may consider all factors relevant to the VASP and/or the ARVA issued by the VASP, including but not limited to—
a. the number of owners and/or holders of the ARVA; b. the value of circulating and/or outstanding supply of the ARVA; c. the value of the Reserve Assets maintained by the VASP; d. the number and value of transactions in the ARVA; e. whether the VASP and/or its affiliates carry out any other VA Activity(ies) and/or financial services in the Emirate, or provide services similar to VA Activities and/or financial services in other jurisdictions; f. interconnectedness with licensed financial institutions and/or VASPs; and/or g. the business, structural and operational complexity of the VASP in relation to the ARVA issued by it.
3. VARA may, in its sole and absolute discretion, impose any Rules on a Significant ARVA Issuer in addition to those contained in the Rulebooks, which may include, but not be limited to, additional Rules on—
a. company structure and corporate governance; b. Paid-Up Capital, Net Liquid Assets, Insurance and/or Reserve Assets; c. audits, regulatory reporting and regulatory notifications; and/or d. any other matter as VARA deems appropriate.