2.5.1. Business Rules, Membership Rules and Admission to Trading Rules

(1)            A Digital Asset Trading Facility Operator must prepare Business Rules, Admission to Trading Rules, and Membership Rules (the “DATF Operator’s Rules”).

(2)            A Digital Asset Trading Facility Operator must seek prior approval of any of the DATF Operator’s Rules and of amendments to any of its Rules by obtaining approval of the AFSA.

(3)            Members and Clients of a Digital Asset Trading Facility must be notified at least 10 days before approved by the AFSA amendments are introduced to the relevant rules of the DATF Operator.

2.5.2. Content of Business Rules

A Digital Asset Trading Facility Operator’s Business Rules must:

(a) be based on objective criteria;

(b) be non-discriminatory;

(c)  be clear, fair and not misleading;

(d)  set out the Members’ and other participants’ obligations:

(i)  arising from the Digital Asset Trading Facility Operator’s constitution and other administrative arrangements;

(ii)  when undertaking transactions on its facility; and

(iii)  relating to professional standards that must be imposed on staff and agents of the Members and other participants when undertaking transactions on its facility;

(e)  be made publicly available free of charge;

(f)  contain provisions for the resolution of Members’ and other participants’ disputes and an appeal process for the decisions of the Digital Asset Trading Facility Operator, whether by an independent internal body or otherwise; and

(g)  contain disciplinary procedures, including any sanctions that may be imposed by the Digital Asset Trading Facility Operator against its Members and other participants.

2.5.3. Monitoring and enforcing compliance with Business Rules

A Digital Asset Trading Facility Operator must have effective arrangements for monitoring and enforcing compliance with its Business Rules including procedures for:

(a)  prompt investigation of complaints made to the Digital Asset Trading Facility Operator about the conduct of Persons in the course of using the Digital Asset Trading Facility Operator’s facility; and

(b) where appropriate, disciplinary action resulting in financial and other types of penalties.

2.5.4. Financial penalties

If arrangements made pursuant to DAA 2.5.3. include provision for requiring the payment of financial penalties, they must include arrangements for ensuring that any amount so paid is applied only in one or more of the following ways:

(a) towards meeting expenses incurred by the Digital Asset Trading Facility Operator in the course of the investigation of the breach or course of conduct in respect of which the penalty is paid, or in the course of any appeal against the decision of the Digital Asset Trading Facility Operator in relation to that breach or course of conduct; or

(b) for the benefit of Members and Clients of the Digital Asset Trading Facility Operator's facility.

2.5.5. Appeals

Arrangements made pursuant to DAA 2.5.3. must include provision for fair, independent and impartial resolution of appeals against decisions of the Digital Asset Trading Facility Operator.

2.5.6. Membership Rules

The Membership Rules of a Digital Asset Trading Facility Operator must specify the obligations imposed on Members and Clients of its facility arising from:

(a) the constitution and administration of the facility;

(b) where appropriate rules relating to transactions using its facilities;

(c) admission criteria for Members, which must comply with DAA 2.6.2;

(d) where appropriate rules and procedures for clearing and settlement of transactions; and

(e) where appropriate rules and procedures for the prevention of Market Abuse, money laundering and Financial Crime.

2.5.7. Admission to Trading Rules

(1) A Digital Asset Trading Facility Operator must make clear and transparent rules concerning the admission of Digital Assets to trading on its facility.

(2) The Admission to Trading Rules of the Digital Asset Trading Facility Operator must ensure that Digital Assets admitted to trading on a facility of the Digital Asset Trading Facility Operator are:

(a) capable of being traded in a fair, orderly and efficient manner; and

(b) freely negotiable.