Sunset view of the Dubai Marina and JBR area and the famous Ferris Wheel and golden sand beaches in the Persian Gulf. Holidays and vacations in the UAE

The new regime specifies licensing and reporting requirements for a range of activities related to virtual assets in the Emirate of Dubai.

By Brian A. Meenagh, Matthew Rodwell, and Ksenia Koroleva

On February 7, 2023, the Dubai Virtual Assets Regulation Authority (VARA) adopted the Virtual Assets and Related Activities Regulations 2023 (the Regulations) together with four compulsory and seven activity-specific rulebooks.

VARA adopted these Regulations further to Dubai Law No. 4 of March 11, 2022 on the Regulation of Virtual Assets in the Emirate of Dubai (the Law) (for more information, see Latham’s blog post).

The Law granted VARA powers to regulate activities relating to virtual assets in the Emirate of Dubai (excluding the Dubai International Financial Center (DIFC); DIFC has its own regime regulating virtual assets — see Latham’s blog post).

The Law laid down key definitions (such as the definitions of virtual assets (VAs) and distributed ledger technology (DLT)), and provided a broad list of activities requiring a license. The Law entitled VARA to adopt regulations for all relevant activities and VAs.

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The regime introduces rules on various crypto tokens, including cryptocurrencies and stablecoins, in the Dubai International Financial Centre.

By Brian A. Meenagh, Matthew Rodwell, and Ksenia Koroleva

On November 1, 2022, the Dubai Financial Services Authority (DFSA) crypto token regulatory regime came into effect.

The rules expand upon the DFSA framework for regulating investment tokens established in 2021 (the 2021 Rules). The Dubai International Financial Centre (DIFC) regime defines a token as a cryptographically secured digital representation of value, rights, or obligations which may be issued, transferred, and stored electronically, using distributed ledger technology (DLT) or other similar technology. The 2021 Rules only regulated investment tokens, which comprised security tokens and derivative tokens (in essence, tokenized equivalents of conventional securities and derivatives, respectively) (the Investment Tokens). Pursuant to the 2021 Rules, persons carrying out certain activities with Investment Tokens (e.g., issuing, offering, holding, promoting, dealing, advising, brokering) need to obtain approval from the DFSA and comply with certain obligations.

The guidance is part of the rapidly evolving rules on anti-money laundering and aims to promote UAE as a jurisdiction compliant with best practices.

By Brian Meenagh, Ksenia Koroleva, and Matthew Rodwell

On August 1, 2022, the UAE Central Bank (CBUAE) issued the Guidance for Licensed Financial Institutions on the Risks Relating to Payments.[1]

The guidance was issued to implement the requirements of Federal Decree Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations. It sets out the CBUAE’s expectations as to the appropriate compliance measures to be adopted within payments ecosystems. The guidance is not intended to amend or replace existing CBUAE requirements and should be read in conjunction with the CBUAE’s existing rules[2] and guidance materials[3].

Emirate of Sharjah cityscape waterfront rising above Al Noor Island at city downtown in the UAE

Organisations subject to the law should carry out a gap analysis of their current compliance position against the new requirements.

By Brian A. Meenagh, Alexander Hendry, and Lucy Tucker

The United Arab Emirates (UAE) has issued its first federal data protection law (Federal Decree Law No. 45/2021 on the Protection of Personal Data) (the Data Protection Law), alongside a law establishing the new UAE Data Office (Federal Decree Law No. 44/2021 on Establishing the UAE Data Office).

The issuance of the Data Protection Law follows a trend of new data protection laws in the Middle East, including a data protection law in Saudi Arabia that will come into force on 23 March 2022.

Sheikh Zayed Road, top view on Museum Of The Future, Jumeirah Emirates Towers Hotel, Gevora Hotel, DIFC, Al-Yaqub Tower, Burj Khalifa

The decision will likely provide comfort to businesses operating in the healthcare sector both in the UAE and globally.

By Brian A. Meenagh and Avinash Balendran

On 28 April 2021 the United Arab Emirates (UAE) federal government issued Ministerial Decision No. 51 of 2021 (the Decision) to clarify when health information may be stored or transferred outside of the UAE. The Decision should pave the way for many domestic and overseas healthcare service providers to continue processing, storing, and transferring…

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The new legislation extends both the protections available to consumers, as well as the obligations applicable to e-commerce retailers.

By Brian A. Meenagh and Avinash Balendran

With its recent implementation of a new consumer protection law, the United Arab Emirates has taken a significant step forward in protecting the rights of consumers. The new legislation — Federal Law No. (15) of 2020 (the New CPL) — entered into force on 16 November 2020, repealing Federal Law No. (24) of 2006. In particular, the New CPL extends both the protections available to consumers, as well as the obligations applicable to e-commerce retailers.

One stand-out provision in the New CPL is Article 4(5), which places an obligation on Entities (as defined below) to protect “consumers’ privacy and data security”. Article 4(5) also implies that Entities should not use consumer data for “the purposes of promotion or marketing”.

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The updates are part of SAMA’s efforts to promote an innovation-based financial technology ecosystem in the KSA.

By Salman Al-Sudairi, Brian A. Meenagh, and Homam Khoshaim

Last month, the Saudi Arabian Monetary Authority (SAMA) issued an update to the recently implemented Payment Services Provider Regulations (PSPR), which was introduced in January 2020 to regulate Payment Services Providers (PSPs) operating in the Kingdom of Saudi Arabia (KSA). The PSPR provides a clear path for PSPs to obtain SAMA-issued licenses to provide payment services in the KSA. Notably, the PSPR applies concepts implemented by the European Union’s Payment Services Directive (PSD2). This should remove some of the friction involved in international PSPs launching operations in the KSA by allowing them to apply the same business models and operating processes already applied in the jurisdictions in which they operate.

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By Christopher Lester and Connie Leung

The Prescribed Company Regulations offer a more flexible incorporation and permitted purposes regime than its predecessor, the Special Purpose Company Regulations.

Prescribed Companies are a type of corporate vehicle available in the Dubai International Financial Centre (DIFC), the financial free zone of the Emirate of Dubai, United Arab Emirates (UAE). Prescribed Companies are categorised as Private Companies under the DIFC Companies Law No. 5 of 2018 (the Companies Law), but are exempted from certain…

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Navigating the impact of the pandemic on technology contracting in preparation for a post-COVID-19 world.

By Brian Meenagh and Alexander Hendry*

A recent Latham.London blog post recommended five steps that customers should take when procuring technology and related services in light of COVID-19 and future pandemics. This blog post examines five additional considerations for customers based in the Middle East.

As a starting point, the recommendations in the Latham.London post still apply, and Middle East customers should:

  1. Have an open discussion with the vendor about the potential service impacts of COVID-19
  2. Structure the service in the most resilient way possible
  3. Consider whether internal (or other third-party) solutions can fill any gaps
  4. Make clear which party will bear any remaining risk of service disruption
  5. Ensure that the output of discussions about “risk” flows through to the fee arrangement

In addition, Middle East customers should consider the following.

Sunset view of the Dubai Marina and JBR area and the famous Ferris Wheel and golden sand beaches in the Persian Gulf. Holidays and vacations in the UAE

Understanding bankruptcy laws in the UAE and DIFC in the context of COVID-19-related financial pressures.

By Nomaan A. Raja and Aly Kassam

COVID-19 has already caused wide-scale disruption to numerous industries both locally and globally. Whilst efforts are underway to stop the spread and impact of COVID-19, the financial and social impact of the virus will be felt for many months to come. As companies come to terms with working from home arrangements and the new landscape in which they…