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The Legislature of Gibraltar has approved a bill designed to update the territoryâs Financial Services regulations. The bill is expected to pave the way for the territoryâs introduction of comprehensive legislation governing the operations of companies working in the distributed ledger and cryptocurrency industries next year.
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Gibraltar Updates âFinancial Services (Investment and Fiduciary Services) Actâ
In an explanatory memorandum, the bill states its intention âto extend measures for the protection of investors to the customers of licensees carrying on controlled activities which are not investment services.â
The amendments predominantly comprise the addition of the terms âcustomersâ and âpotential customersâ alongside âinvestorsâ and âpotential investorsâ in numerous sections of Gibraltarâs Financial Services Act. As such, analysts have inferred that the amendments are designed to extend existing regulations designed to protect qualified investors to also cover the engagement of retail investors with products issued by Gibraltarâs distributed ledger technology (DLT) industry.
The Bill Has Been Passed One Month Before Gibraltar Is Expected to Introduce a Regulatory Apparatus Governing the Territoryâs Distributed Ledger Technology Industry
The new DLT regulations, the âFinancial Services (Distributed Ledger Technology Providers) Regulations 2017â, will see Gibraltar issue a âDLT providerâs licenseâ to successful applicants. DLT providers will be required to adhere to the regulatory requirements of the countryâs Financial Services (Investment and Fiduciary Services) Act, in addition to the âregulatory principlesâ laid out in the new legislation. Gibraltarâs regulators have stated that âSubject to sub-regulation, these Regulations come into operation on 1 January 2018.â
In recent months, the British overseas territory has increasingly sought to position itself as an attractive jurisdiction for DLT and cryptocurrency companies to operate in. During September, Gibraltar announced its intention to develop a âcomplementary regulatory frameworkâ for initial coin offerings, defying the international trends at the time. In August, the territory saw the installation of its first bitcoin ATM, situated in the reception area of the World Trade Center Gibraltar.
Do you think that Gibraltar will be successful in attracting cryptocurrency and DLT companies to base their operations in the territory? Share your thoughts in the comments section below!
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