CALL FOR COMMENTS ON DRAFT DECLARATION OF CRYPTO ASSETS AS A FINANCIAL PRODUCT UNDER THE FAIS ACT
The possible regulation of crypto assets has been under consideration by the Intergovernmental Fintech Working Group (IFWG), consisting of member of the National Treasury, the South African Reserve Bank, the Financial Sector Conduct Authority (FSCA) and the Financial Intelligence Centre, since 2016.
In 2020, the Crypto Assets Regulatory Working Group (CAR WG), which falls under the IFWG, published a Position Paper which made a variety of recommendations about the regulation of crypto assets. These recommendations included:
that the specified services rendered in respect of crypto assets must be included in the definition of ‘financial services’ in section 3(1)(a) of the Financial Sector Regulation Act 9 of 2017 (the FSR Act), and that services related to the buying and selling of crypto assets must be included in the licensing activities under the Conduct of Financial Institutions (COFI) Bill.
that, pursuant to the above, the FSCA should become the responsible authority for the licensing of services related to the buying and selling of crypto assets. Furthermore, specific conduct standards should be developed for these services.
To give effect to these recommendations, the FSCA has published the draft Declaration of Crypto Assets as a Financial Product under FAIS for comment. Interested parties are invited to submit comments on the draft Declaration on or before 28 January 2021 to the FSCA at FSCA.RFDStandards@fsca.co.za, using the submission template.
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