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  • Transition Period

    A one-year transitional period will commence on the date the Regulation comes into force. Licensees already holding an SVF License granted under the previous regulatory framework may continue operating without contravening this Regulation. Nevertheless, they are required to complete the implementation of the relevant measures set out in this Regulation by the end of the transition period.

    The existing Licensees are required to submit an independent assessment report as prescribed in paragraphs 5 and 6 of Article (3) before the end of the transition period to ensure that they are in full compliance with this Regulation.

    • Article (1): Definitions

      1. AML/CFT: Anti-Money Laundering and Combating the Financing of Terrorism and financing of illegal organizations.
         
      2. Applicant: a company duly incorporated in the United Arab Emirates in accordance with the Federal Law No. (2) of 2015 on Commercial Companies, except Joint Liability Company, Simple Commandite Company, which files an Application for the issuance of an SVF License.
         
      3. Application: a request submitted by an Applicant in the form and with the documents and information set out in the Annex for providing an SVF Services.
         
      4. Central Bank: The Central Bank of the United Arab Emirates.
         
      5. Central Bank Law: Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities and its amendments.
         
      6. Closed Loop Payment Scheme: a payment scheme, which is limited in terms of where it can be used to purchase goods and services from an issuing retailer or entity.
         
      7. Controlling Shareholder: a shareholder who has the ability to directly or indirectly influence or control the appointment of the majority of the board of directors, or the decisions made by the board of directors, or has the power to direct or cause the direction of the management or policies of an entity, whether by the general assembly of the entity, through the ownership of a percentage of the shares or stocks or under an agreement or other arrangement providing for such influence or control.
         
      8. Crypto-Assets: cryptographically secured digital representations of value or contractual rights that use a form of distributed ledger technology and can be transferred, stored or traded electronically.
         
      9. Customer: a natural or legal person who contracts with a Licensee in order to establish and use an SVF in accordance with this Regulation.
         
      10. Customer Due Diligence (CDD): includes measures and processes to be taken for: (a) identifying the Customer and verifying that Customer’s identity using reliable, independent source documents, data or information, and (b) on-going due diligence on the Customer or business relationship and scrutiny of transactions undertaken throughout the course of that relationship.
         
      11. Device-based Stored Value Facility: an SVF which has the value stored in an electronic chip on a card or physical device such as pre-paid cards, watches and ornaments.
         
      12. Financial Action Task Force (FATF): an inter-government body which sets international standards that aim to prevent global money laundering and terrorist financing activities.
         
      13. Financing of Terrorism: any of the acts mentioned in Articles (29) and (30) of the Federal Law no. (7) of 2014 On Combating Terrorism Offences.
         
      14. Float: the Customers’ funds / money / Money’s Worth paid to the Licensee in exchange for the value of the money/Money’s Worth (including Money’s Worth such as values, points, Crypto-Assets or Virtual Assets) on the facility.
         
      15. Information Technology (IT): the use of any computers, smart devices, storage, networking and other physical devices, infrastructure and processes to create, process, store, secure and exchange all forms of electronic data.
         
      16. IT Controls: a set of policies and procedures that aims to provide a reasonable assurance that the technologies and computer systems used by an organization operates as intended and in a secure and reliable manner, that data security, integrity and reliability can be ensured, and that the organization is able to comply with applicable laws and regulations.
         
      17. License: a License issued by the Central Bank to an Applicant for the issuance and operation of SVF business in the State. The License is valid, unless it is withdrawn, suspended or revoked by the Central Bank.
         
      18. Licensee: an Applicant who has been granted an SVF License by the Central Bank.
         
      19. Licensed Financial Activity: The financial activities subject to the Central Bank’s licensing and supervision, which are specified in article (65) of the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities.
         
      20. Money Laundering: any of the acts mentioned in Clause (1) of the Article (2) of the Federal Decree-law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations.
         
      21. Money’s Worth: value added onto an SVF by the Customer; value received on the Customer’s SVF account; and value redeemed by the Customer include not only “money” in the primary sense but also other forms of monetary consideration or assets such as values, reward points, Crypto-Assets, or Virtual Assets. For example, a value top-up of an SVF account may take the form of values, reward points, Crypto-Assets, or Virtual Assets earned by the SVF Customer from making purchases of goods and services. Similarly, value received on the account of the SVF Customer may take the form of an online transfer of value, reward points, Crypto-Assets, or Virtual Assets between fellow SVF Customers.
         
      22. Non-device Based Stored Value Facility: is a facility which has the value stored on a network-based account and can be accessed through the internet, a computer network or mobile network. Examples include internet-based payment platforms or mobile e-wallets which provide “network-based accounts” with which Customers can store value for making payments for online and off-line purchases, or for person-to-person funds transfers.
         
      23. Operating Rules: are rules set up by a Licensee to cover the complete chain of an SVF’s operation including but not limited to Customer account opening and maintenance, merchant acquisition and contractual relationships with business partners, pre-transaction, payment authorization and post-transaction processes.
         
      24. Senior Management: a team of individuals at the highest level of management of the Licensee who have the day-to-day tasks of managing the Licensee’s business.
         
      25. Single-purpose Stored Value Facility: a facility that in respect of which the issuer gives an undertaking that, if the facility is used as a means of making payments for goods or services (not being money or Money’s Worth) provided by the issuer, the issuer will provide the goods or services under the rules of the facility. A Closed Loop Payment Scheme is a typical Single-purpose Stored Value Facility.
         
      26. State: the United Arab Emirates, excluding the Financial Free Zones.
         
      27. Stored Value Facility (SVF): A facility (other than cash) for or in relation to which a Customer, or another person on the Customer’s behalf, pays a sum of money (including Money’s Worth such as values, reward points, Crypto-Assets or Virtual Assets) to the issuer, whether directly or indirectly, in exchange for: (a) the storage of the value of that money (including Money’s Worth such as values, reward points, Crypto-Assets or Virtual Assets), whether in whole or in part, on the facility; and (b) the “Relevant Undertaking”. SVF includes Device-based Stored Value Facility and Non-device based Stored Value Facility.
         
      28. SVF Issuer: a company which carries out the business of the provision of SVF and is responsible and accountable for the safekeeping of the Float.
         
      29. Relevant Undertaking: In relation to an SVF, Relevant Undertaking means an undertaking by the Licensee that, upon the use of SVF by the Customer as a means for payment for goods and services (which may be or include money or Money’s Worth) or payment to another person, and whether or not some other action is also required, the Licensee, or a third party that the SVF Issuer has procured to do so, will, in accordance with the Operating Rules: (a) supply the goods or services; (b) make payment for the goods or services; or (c) make payment to the other person, or as the case requires.
         
      30. Virtual Assets: Virtual assets include digital tokens (such as digital currencies, utility tokens or asset-backed tokens) and any other virtual commodities, Crypto Assets and other assets of essentially the same nature.
         
      31. Virtual Asset Service Provider: is a business which conducts Virtual Assets-related activities or operations for or on behalf of another natural or legal person. The activities or operation may include exchange between Virtual Assets and fiat currencies; exchange between one or more forms of Virtual Assets; transfer of Virtual Assets; safekeeping and/or administration of Virtual Assets or instruments enabling control over Virtual Assets; and participation in and provision of financial services related to an issuer’s offer and/or sale of a Virtual Asset.