Abu Dhabi Global Market issues draft proposals for NFT trading.

On Monday, the emirate’s free zone, Abu Dhabi Global Market (ADGM), published a consultation paper titled “Proposals for enhancements to capital markets and virtual assets in ADGM.” The publication includes proposed guidelines for nonfungible token (NFT) trading, among other asset types. The report suggests that organizations having a financial regulator license from the free zone be authorized to support NFT trading.

Along with sections on standard financial instruments, the document includes a little more than a page on virtual assets and non-traditional financial instruments. The Financial Services Regulatory Authority (FSRA), the free zone’s principal regulator, refers to NFTs as intellectual property rather than “defined investments or financial instruments” in this section. It also suggests that NFT marketplaces be operated via multilateral trading facilities (MTFs) and Virtual Asset Custodians (VACs).

The document further states that transactions in NFTs may need compliance with ADGM’s Anti-Money Laundering (AML) and Sanctions Rules.

As stated in the document, FSRA is not proposing a formal regulatory framework for NFTs at this time. The consultation paper is open for feedback until May 20 and invites stakeholders to offer their ideas on several significant concerns, such as “What sorts of NFTs should be permitted to trade on MTFs?” and “How should third-party NFT registries be integrated?”

What do you think about this document? Any ideas that you want to share? Comment down below!

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