Regulatory Framework
Fractit's index markets product is designed to operate within the VARA virtual-asset regulatory framework for entities issuing virtual assets in Dubai outside DIFC.
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Fractit's index markets product is designed to operate within the VARA virtual-asset regulatory framework for entities issuing virtual assets in Dubai outside DIFC.
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.
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.
Fractit operates through a chain of licensed and regulated partners:
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.
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.
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