Domestic companies looking to raise funds in the UAE have another way of raising funds thanks to the recent announcement from the Emirates Securities & Commodities Authority. Through the ICOs domestic companies will offer their virtual currency tokens raise funds the same way IPOs sale equity to investors.
During a seminar held recently Obaid Saif al-Zaabi said;
“After holding lengthy discussions concerning the ICOs the board of Emirates Securities & Commodities Authority has approved ICOs as securities. As per plan come first half of 2019 we will have regulations in place.”
To be able to come up with the perfect regulations the Emirates Securities & Commodities Authority is working in collaboration with international advisors to draft up the laws. In addition to the advisors, the ESCA is working with Dubai and Abu Dhabi stock marketers to develop a trading platform.
Recent market trends in the UAE and the Gulf Arab region at large has forced governments to usher in the ICOs to help raise funds. Weak equity markets followed by a drop in oil prices are the major drawbacks that have led to the current decision.
Additions Laws to Be Passed
Besides approving ICOs to offer their tokens The Ministry of Economy has written to the Prime Minister Office to allow family-owned companies to sell 100 per cent of their shares. If successful come 2019, the new law will grant families with 100% of shares in any company be allowed to float 100% of their shares through IPOs sale to investors and help raise funds. Similarly, there are strategies been put in place to allow a minimum of 20% of board members in listed companies to constitute women.
When the new laws come into effect, the UAE will join the leagues of countries putting in place legal frameworks in support of ICOs. Through the legal frameworks, blockchain startups have conducive environments to propel their companies to the next levels. Besides the UAE Malta, the little blockchain Island passed various bills early this year in support of the blockchain and cryptocurrency industry. On the other hand, Bermuda is hoping to attract more business by putting in place certain conditions that would allow the operation of ICOs within its borders. Furthermore, the government of Bermuda has put in place a task force to monitor the issuance of tokens.
Through the development of legal frameworks, it is much easier for ICOs to raise funds and help in building the economy.