Financial Instruments Act

Definition ∞ The Financial Instruments Act refers to specific legislation designed to regulate financial markets and the trading of financial instruments within a particular jurisdiction. These acts typically define what constitutes a financial instrument, establish rules for market conduct, licensing requirements for financial service providers, and measures for investor protection. In the context of digital assets, such legislation determines how cryptocurrencies and tokens are classified and regulated. Compliance with these acts is mandatory for market participants.
Context ∞ The application of existing Financial Instruments Acts to digital assets is a subject of ongoing legal and regulatory debate globally. A critical discussion involves whether certain cryptocurrencies should be classified as securities, commodities, or a distinct asset class under these laws. Future developments are likely to include amendments to these acts or the creation of entirely new legislation specifically addressing digital financial instruments.