Entire Section

  • GEN A2.1.1 GEN A2.1.1

    (1) An Investment is, subject to (3), either:
    (a) a Security; or
    (b) a Derivative,
    (2) Such a Security or Derivative includes:
    (a) a right or interest in the relevant Security or Derivative;
    (b) the Security or Derivative in the form of a cryptographically secured digital representation of rights and obligations that is issued, transferred and stored using DLT or other similar technology;
    (c) a cryptographically secured digital representation of rights and obligations that is issued, transferred and stored using DLT or other similar technology and:
    (i) confers rights and obligations that are substantially similar in nature to those conferred by a Security or Derivative; or
    (ii) has a substantially similar purpose or effect to a Security or Derivative; and
    (d) any instrument declared as a Security or Derivative pursuant to GEN Rule A2.4.1(1).
    (3) In these Rules, an Investment Token means an instrument specified in (2)(b) or (c).
    (4) Where a Rule provides that a Security or Derivative has a different classification for a specified purpose, it shall have that effect for that specified purpose and no other purpose.
    [Added] DFSA RM62/2008 (Made 4th January 2009). [VER22/01-09]
    [Amended] DFSA RMI309/2021 (Made 30th June 2021). [VER53/10-21]

    • GEN A2.1.1 Guidance

      1. A Token is defined in GLO as a cryptographically secured digital representation of value, rights or obligations, which may be issued, transferred and stored electronically, using DLT or other similar technology.
      2. GEN Rules A2.1.1(2)(b) and (c) specify when a Token will be an Investment. A Token that is an Investment may be either a Security or a Derivative and will be treated under the Rules as being the particular type or particular types of Security or Derivative to which it is substantially similar in nature. A Token that is an Investment is defined in these Rules as an Investment Token.
      3. An Investment Token that is the same as, or substantially similar in nature, purpose or effect to, a Share, Debenture, Warrant, Certificate, Unit or Structured Product is defined in GLO as a “Security Token”. An Investment Token that is the same as, or substantially similar in nature, purpose or effect to, an Option or a Future is defined in GLO as a “Derivative Token”.
      4. GEN App 6 sets out further Guidance relating to whether a particular Token is an Investment Token.
      5. An example of the application of GEN Rule A2.1.1(4) is GEN Rule A2.1.2(2), where a Derivative is treated as a Security for the purposes of the requirements in PIB.
      [Added] DFSA RM62/2008 (Made 4th January 2009). [VER22/01-09]
      [Amended] DFSA RMI309/2021 (Made 30th June 2021). [VER53/10-21]