vii. Further to MIR Rule 2.8, the FSRA expects an MTF to have a rulebook(s) in place. This rulebook should be clearly labelled as such and be publicly available on the website of the MTF.
viii. Supporting documents such as participation agreements, terms of business, product lists, user guides and technical specifications are also a key part of the operation of an MTF, and should be consistent with its rulebook. The FSRA does not consider that the existence of these documents alone meet the requirement of having a transparent and effective rulebook. The FSRA considers it good practice that these supporting documents are available and transparent, alongside the published rulebook, to the extent possible.
ix. The content of a rulebook31 should enable an MTF to demonstrate how it is complying with MIR Rule 2.8, be supported by procedures that are complete and clear, and all in support of an MTF seeking to ensure that behaviour within its market is fair and orderly.
x. The FSRA expects MTFs to require explicit acknowledgement via a user agreement, that participants have read, understood and will abide by the rulebook at all times.
xi. The FSRA expects an MTF to undertake regular reviews of its rulebook to ensure it is consistent with relevant regulatory and legislative requirements. Best practice may see such activity undertaken no less than every twelve-months.
d) MIR Rule 2.9 (Financial crime and market abuse): MTFs are required to operate an effective market surveillance program to identify, monitor, detect and prevent conduct amounting to market misconduct and/or Financial Crime. Given the significant risks, and the nascent nature and constant pace of development of the Virtual Asset industry, an MTF’s surveillance system will need to be robust, and regularly reviewed and enhanced.
i. The FSRA recognises that an MTF outside ADGM may not be subject to a similar regulatory standard as that which applies within ADGM. The FSRA recommends, therefore, that MTFs spend the time to consider the application of MIR Rules 2.9.1 to 2.9.3, which technology, systems and controls they propose to use for these purposes, and the associated resourcing needs required to undertake these functions appropriately. For this reason, among others set out in this Guidance, the FSRA is of the view that it is not appropriate for an MTF to outsource its compliance / market surveillance functions.
ii. The FSRA further reminds MTFs, and investors trading on an MTF, of the Market Abuse provisions applicable to the trading of Accepted Virtual Assets on an MTF.32
e) MIR Rule 2.11 (Rules and consultation): To meet MIR Rules 2.11.1 to 2.11.11, an MTF must ensure that it has appropriate procedures in place for it to make rules, for keeping its rules under review, for consulting and for amending its rules. MIR Rule 2.11.2 requires proposed rule changes be subject to FSRA approval.
f) MIR Rule 3.3 (Fair and orderly trading): MIR Rules 3.3.1 to 3.3.4 establish the requirements an MTF must meet for providing fair and orderly trading across its market, and for having objective criteria for the efficient execution of orders. The FSRA considers these requirements to be fundamental to the operation of an MTF.
g) COBS Rule 8.3.1 & MIR Rule 3.7 (Public disclosure):
i. Any arrangements of an MTF used to make information public (including trading information required to be disclosed under COBS Rule 8.3.1) must satisfy a number of conditions, including that it is reliable, monitored continuously, and made available to the public on a non-discriminatory basis. While an MTF can choose the format structure to be used for dissemination, MIR Rule 3.7.4 requires it to conform to a consistent and structured format.
ii. In terms of the timing of disclosure of MTF trading information, the FSRA recognises that current virtual asset industry practice is for such trading information to be released on a real-time basis (in alignment with current practice for trading within spot commodity markets, but different to the current industry/regulatory practice of delayed data within certain securities/derivatives markets). The FSRA is not proposing any additional specific requirements at this stage (to those already applicable in COBS Rule 8.3.1 and MIR Rule 3.7), but will continue to monitor industry practice.
h) MIR Rule 3.8 (Settlement and Clearing Services): An MTF will need to have clear processes in place for the settlement (and if applicable, the clearing) of all Accepted Virtual Asset transactions. As noted in the AML and Technology Governance sections of this Guidance, extensive stress testing on capabilities to connect successfully with third parties, and in relation to the movement of Accepted Virtual Assets between wallets, will be required to be undertaken to the FSRA’s satisfaction. The FSRA will not necessarily require a connection to a separate Recognised (or Remote) Clearing House where the MTF can demonstrate that it has in place ‘satisfactory arrangements for the timely discharge, Clearing and settlement of the rights and liabilities of the parties to transactions effected’ on the MTF, including where it is utilising the services of a Virtual Asset Custodian.
i) MIR Rule 3.10 (Default Rules): Depending on whether an MTF operates a ‘Member-access’ model or it allows direct ‘Client-access’ will determine the full, or partial, application of MIR Rules 3.10.1 to 3.10.3. The FSRA, at a minimum, expects MTFs to have in place both rules and a process to suspend or terminate access to its markets in circumstances where a Client/Member is unable to meet its obligations in respect of transactions relating to Accepted Virtual Assets.
i. The FSRA suggests that an Applicant/Authorised Person consider different scenarios/circumstances where it may need to utilise the powers provided to it under its Default Rules, and take appropriate action as required. Scenario testing of this kind could relate to when there is a financial and/or technical ‘default’ in relation to, for example, its custody, fiat token or wider banking arrangements. Due to a prevalence of pre-funding of (client) positions within Virtual Asset markets, the impact of a ‘default’ in such a scenario may not necessarily be on a per-transaction basis, but could be structural in nature, in limiting the ability of Clients to fund their positions (and therefore the ability of the MTF to operate on a fair and orderly basis).
ii. To prepare for the event of a loss/default, the FSRA expects an MTF to have, within its policies, a clear process for the management of such loss (e.g., what is the exposure of individual Clients, counterparties, its Custodian and itself, as applicable).
132) COBS Rule 17.7.4 specifies that certain notification requirements applicable to Recognised Investment Exchanges under MIR Rules 5.1, 5.3 and certain information requirements under MIR Rule 5.4.1 apply to MTFs (using Virtual Assets). These are additional requirements applicable to MTFs using Virtual Assets. MTFs using Virtual Assets will also need to comply with any other applicable notification requirements, including those set out in paragraph 29 of this Guidance in relation to the use of additional Accepted Virtual Assets.
133) It is recognised that MTFs may take varying approaches in relation to the custody of fiat currencies and Virtual Assets. An MTF may use third party custodians but still be holding itself out to its Clients as being responsible for custody of their fiat currencies and Accepted Virtual Assets. Alternatively, an MTF may provide custody of Clients’ fiat currencies and Accepted Virtual Assets wholly itself, done “in-house” without the use of any third party custodians. An MTF whose custody arrangements fall into either of these two scenarios will also be considered to be Providing Custody of Virtual Assets for the purposes of the Virtual Asset Framework, and will be required to comply with COBS Chapters 14, 15 and 16, and take guidance from the sections below on “Authorised Persons Providing Custody of Virtual Assets”.
134) As further set out in paragraphs 154 and 155, in circumstances where an MTF is also Providing Custody, the FSRA expects appropriate segregation of responsibilities, staff, technology and, as appropriate, financial resources, between the operations of the MTF and the Virtual Asset Custodian.

31 A non-exhaustive list of sections that the FSRA consider key for inclusion in a rulebook include:
• participant eligibility criteria;
• participant obligations;
• Accepted Virtual Asset eligibility criteria;
• Virtual Asset fork protocols;
• fair and orderly trading rules;
• AML and source of fund requirements;
• market abuse prohibition rules;
• measures to prevent a disorderly market;
• disciplinary procedures;
• pre- and post-trade obligations;
• settlement obligations;
• certain wallet and custody provisions;
• default provisions;
• compliance;
• monitoring & enforcement;
• definitions / glossary of terms;
• co-operation with regulators; and
• powers to amend rules and consultation procedures.
32 Refer to paragraphs 98 to 102 of this Guidance.