How to get a license for digital tokens services?

 

At the session held on 17 December 2020, the National Assembly of the Republic of Serbia adopted the Law on Digital Property (“Official Gazette of the RS”, No. 153/2020, the “Law“). The law entered into force on 29 December 2020, but its application began on 29 June 2021.

 

Digital property, i.e. virtual property as defined by the Law, is a digital record of value that can be digitally bought, sold, exchanged or transferred and which can be used as a means of exchange or for investment purposes.

 

From the notion of digital assets, the legislator excludes those digital currency records that are legal tender, as well as other financial assets that are regulated by other laws.

 

Digital assets come in 2 basic forms:

 

  • virtual currency is defined as a type of digital asset that is not issued and whose value is not guaranteed by the central bank or other public authority, which is not necessarily tied to a legal tender and has no legal status of money or currency, but is accepted by individuals or legal entities. as a medium of exchange and may be bought, sold, exchanged, transmitted and stored electronically;

 

  • digital token is a type of digital asset and means any intangible property right that in digital form represents one or more other property rights, which may include the right of the user of the digital token to be provided with certain services.

 

At its session held on 17 June 2021, the Securities Commission of the Republic of Serbia (the “Commission“) adopted the Rulebook on the Implementation of the Provisions of the Law on Digital Property Relating to Licensing the Provision of Services Related to Digital Tokens and values ​(„Official Gazette of the RS”, no. 69/2021 the “Rulebook“);

 

This Rulebook regulates:

 

  1. the manner of implementation of the provisions of the Law on the basis of which the Commission issues a license for the provision of services related to digital assets in the part related to digital tokens (in hereinafter: the permit), as well as the evidence submitted to the Commission with the application for a permit,
  2. more detailed conditions that must be met by a member of the management board of the service provider related to digital tokens (hereinafter: the head of the service provider), as well as evidence submitted to the Commission with the request for consent to the election of the management board member and the service provider,
  3. more detailed conditions regarding personnel and organizational training, as well as technical and information equipment of service providers, taking into account, above all, specific market circumstances, significant risks, potential conflicts of interest, financial resources and necessary professional and technical information training, as and evidence provided to the Commission to assess compliance with these conditions;
  4. more detailed eligibility conditions that must be met by a person with a qualifying holding in a service provider, as well as evidence submitted to the Commission with a request for prior consent to acquire or increase a qualifying holding in a service provider.

 

According to the Rulebook, a company that intends to provide services related to digital tokens submits a request to the Commission.

 

The following documentation is attached to the request:

 

  1. decision on entry in the register of economic entities
  2. general acts of the applicant (statute, ie founding act and rules of business of the company);
  3. a program of activities which further regulates the manner and conditions of providing services related to digital tokens;
  4. business plan with a projection of revenues and expenditures for the first three years of operation on the basis of which it can be concluded that the applicant will be able to ensure compliance with appropriate organizational, personnel, technical and other conditions for continuous, stable and secure operations, including and the type of expected digital token users, as well as the expected volume and amount of digital token transactions, for each type of service it intends to provide;
  5. description of planned measures for protection of funds of digital token users in accordance with Article 78 of the Law
  6. description of the management system and internal control system in accordance with Article 92 of the Law;
  7. a description of the internal control measures established to meet the obligations set out in the regulations governing the prevention of money laundering and terrorist financing
  8. description of planned training measures for employees in connection with performing transactions with digital tokens;
  9. a description of the organizational structure, including information on the planned entrustment of certain operational tasks related to the provision of services related to digital tokens;
  10. description of planned measures for information and communication system security management;
  11. data on the members of the management board of the applicant and the head of the service provider, with data and evidence that these persons have a good business reputation in accordance with Article 60 of the Law;
  12. data on persons with qualified participation in the applicant, the amount of their participation, as well as evidence of the suitability of those persons in accordance with Article 65 of the Law;
  13. data on the external auditor who performs the audit of the financial statements of the applicant in the year in which the request is submitted, if the applicant is required to audit the financial statements in accordance with the law;
  14. data on persons closely related to the applicant and a description of that connection;
  15. proof of possession of the minimum capital referred to in Article 54, paragraph 1 of the Law;
  16. proof that the Applicant has not been convicted by a final verdict for a criminal offense, as well as that no criminal proceedings have been instituted against him, in terms of the law governing the liability of legal entities for criminal offenses, and that he has not been convicted by a final verdict. makes it unsuitable to provide services related to digital tokens, in terms of the law governing economic offenses;
  17. information on the fee paid in accordance with the Commission’s tariff.

 

Data on persons are in particular considered:

 

  • for natural persons:

 

  • name and surname of the natural person,
  • address of residence, i.e. residence of the natural person (place, street and number), and for a natural person who does not have the citizenship of the Republic of Serbia and the name of the state,
  • unique personal identification number of citizens, i.e. other appropriate identification mark for a natural person who does not have the citizenship of the Republic of Serbia (e.g. passport number or registration number determined by the competent state authority):

 

  • for legal entities:

 

  • business name or abbreviated business name of the legal entity,
  • address of the registered office of the legal entity (place, street and number), and for a legal entity that does not have a registered office in the Republic of Serbia and the name of the country,
  • identification number of the legal entity, ie other appropriate identification mark for the legal entity that does not have its registered office in the Republic of Serbia (e.g. registration number determined by the competent state body),
  • tax identification number of the legal entity.

 

The Commission decides on the request in the form of a decision within 60 days from the receipt of the request.