# Regulatory Framework *** ### VARA orientation VARA (Virtual Asset Regulatory Authority) is Dubai's regulator for virtual assets. VARA's framework establishes requirements for VA issuance, AML/CFT compliance, eligible investor criteria, and permitted activities. Fractit's compliance architecture is built to satisfy these requirements from the ground up — not retrofitted. Regulatory controls are enforced at the Canton contract execution layer, meaning they are active regardless of how or where a user interacts with their tokens. *** ### Compliance is on-chain On most platforms, compliance is a UI-layer feature — something enforced at the application interface but bypassable at the contract level. On Fractit, this is not the case. Whitelist checks, transfer restrictions, and jurisdiction blocks are all enforced by DAML contracts on Canton. A token cannot be transferred, subscribed for, or redeemed unless the relevant compliance conditions are met at the contract layer. *** ### Partner stack Fractit operates through a chain of licensed and regulated partners: | Partner Type | Role | | ----------------------- | -------------------------------------------------------------------- | | Licensed broker | Market access — executes share purchases on DFM on behalf of the SPV | | Institutional custodian | Safekeeping of constituent shares in the SPV | | Securities depository | Registration and settlement of share holdings | | Banking partner | Fiat and FX operations for subscription and redemption flows | | Compliance vendor | KYC/AML processing, sanctions screening, and ongoing monitoring | Every off-chain component of the product is governed by appropriate regulatory oversight through these partners. *** ### Future markets Each new index market added to Fractit — starting with ALDREIT (Abu Dhabi), SGREIT (Singapore), and HKREIT (Hong Kong) — will be mapped to the regulatory framework of its respective jurisdiction before launch. The compliance architecture and on-chain enforcement model is designed to accommodate multiple regulatory regimes within the same protocol layer. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.fractit.com/compliance/regulatory-framework.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.