LAWON DIGITAL ASSETS("Off. Herald of the RS", No. 153/2020) |
Article 1
This Law shall regulate:
1) Issuing of digital assets and secondary trading in digital assets in the Republic of Serbia (hereinafter referred to as: the Republic);
2) Provision of services related to digital assets;
3) Pledge and fiduciary rights to digital assets;
4) Competence of the Securities Commission (hereinafter referred to as: the Commission) and of the National Bank of Serbia;
5) Supervision of the application of this Law.
Article 2
Individual notions, within the meaning of this Law, shall have the following meanings:
1) Digital assets, i.e. virtual property, shall mean the digital record of value that can be digitally purchased, sold, exchanged or transferred and that can be used as a means of exchange or for the purpose of investing, where the digital assets do not include digital records of the currencies which are legal tenders or other financial property which is regulated by other laws, unless where regulated otherwise by this Law;
2) Virtual currency shall mean a type of digital asset which is not issued by the central bank and having the value which is not guaranteed by the central bank or any other public authority, which is not necessarily attached to a legal tender and does not have the legal status of money or a currency, but which is accepted by the natural or legal persons as a means of exchange and can be bought, sold, exchanged, transferred and stored electronically;
3) Digital token shall mean a type of digital assets and shall designate any right to intangible property representing, in the digital form, one or more other property rights, which may also include the right of the digital token user to benefit from certain services;
4) Supervisory authority shall mean the National Bank of Serbia and the Commission, in accordance with the competences laid down by this Law;
5) Digital assets service provider shall mean the legal person providing one or more digital assets services as laid down in Article 3 of this Law;
6) Advisory service provider shall mean the person exclusively providing advisory services related to digital assets;
7) Crypto ATM shall mean an automated teller machine enabling purchasing and selling of digital assets for money or exchange of digital assets for other digital assets;
8) Portfolio of digital assets shall mean a set of digital assets in which a person invests his means;
9) White paper shall mean the document that is published on the occasion of issuing of digital assets in compliance with this Law, comprising information on the issuer of digital assets, information on the digital assets and the risks associated with the digital assets and enabling the investors to make informed investment decision;
10) Subsequent white paper shall mean a document published following the issuance of digital assets for which no white paper has been issued, comprising information on the issuer of the digital assets, information on the digital assets and on the risks associated with the digital assets and enabling the investors to make informed investment decision;
11) Digital assets trading platform shall mean a multilateral system organizing trading in digital assets, which is operated by the platform organizer and which enables and facilitates bringing together the third parties’ buying and/or selling interests in digital assets and/or exchange of digital assets for other digital assets, in compliance with its non-discretionary rules and in the manner that is conductive to conclusion of a contract;
12) Management member shall mean the director, executive director, a member of the executive board and a member of the supervisory board of a legal person, depending on the management structure of such person, as well as the legal representative of a general partnership and limited partnership, i.e. a third person to which the management authority has been transferred in a general partnership and limited partnership;
13) Issuer shall mean a domestic or foreign natural person, a sole trader or a legal person which has issued digital assets;
14) Digital assets OTC market shall mean a market for trading in digital assets where transactions are carried out directly between the seller and the buyer of the digital assets without the mandatory participation of the digital assets service provider and outside of the platforms for trading in digital assets;
15) Financial institutions under surveillance of the National Bank of Serbia shall mean the banks, insurance companies, reinsurance companies, insurance brokerage companies, insurance agency companies and insurance agents, financial leasing providers, voluntary pension funds’ management companies, payment institutions and electronic money institutions, in compliance with the special laws governing the operations of these institutions;
16) Persons related to financial institutions under the surveillance of the National Bank of Serbia shall have the meaning laid down by the special laws governing the operations of these institutions;
17) Payment services provider shall mean a bank, a payment institution, an electronic money institution and a public postal operator having their seat in the Republic, in compliance with the law governing payment services;
18) Qualified holding shall exist when a person has:
(1) A direct or indirect right or possibility to exercise at least 10% of the voting rights in a legal person, i.e. direct or indirect ownership of at least 10% of the capital of such legal person, or
(2) A possibility to effectively exert significant influence on the management of another legal person;
19) Controlling holding shall exist when a person has:
(1) A direct or indirect right or possibility to achieve at least 50% of the voting rights in a legal person, i.e. direct or indirect ownership of at least 50% of the capital of such legal person, or
(2) A possibility to elect and/or to dismiss at least one half of the management members of such legal person, or
(3) A possibility to effectively exert dominant influence on the management of another legal person;
20) Group of companies shall mean a group which comprises of a parent company, its subsidiaries and the legal persons in the capital of which such parent company and/or its subsidiaries have a share, as well as the companies which are related by common management;
21) Parent company of a legal person shall mean the company which has the controlling interest in such legal person;
22) Subsidiary of a legal person shall mean the company in which such legal person has the controlling interest;
23) Companies related by common management shall mean the companies which are not related by the relationship of a parent company and a subsidiary or by a share in the capital within the meaning of item 20) of this paragraph and they shall include:
(1) Companies managed on a unified basis in compliance with the contract concluded between such companies or based on the provisions of the articles of association or memoranda of association of such companies, or
(2) Companies in which the same persons make up the majority of the management members;
24) Close link shall designate the relationship between two or more legal and/or natural persons where:
(1) One of them, directly or indirectly, through participation in a subsidiary, has the right or possibility to achieve at least 20% of the voting rights in the legal person, i.e. ownership of at least 20% of the capital in the legal person,
(2) One of them has the controlling interest in another legal person,
(3) These persons are permanently linked to the same third person based on the controlling interest;
25) Money shall mean cash, scriptural money and electronic money;
26) Cash shall mean banknotes and coins;
27) Electronic money shall have the meaning laid down by the law governing electronic money;
28) Financial instrument shall have the meaning laid down by the law governing the capital market;
29) Market operator shall have the meaning laid down by the law governing the capital market;
30) Broker-dealer company shall have the meaning laid down by the law governing the capital market;
31) Retail trade shall have the meaning laid down by the law governing trade;
32) Consumer shall have the meaning laid down by the law governing trade;
33) Advertising shall have the meaning laid down by the law governing advertising, unless where regulated otherwise by this Law;
34) Transaction involving digital assets shall designate buying, selling, accepting or transferring of digital assets or exchanging digital assets for other digital assets;
35) Digital assets user shall designate a natural person, a sole trader or a legal person which is using or has used a digital assets service or has addressed a digital assets service provider in order to use such service;
36) Digital assets holder shall mean the user of digital assets and the person which has acquired digital assets irrespective of the business relationship established with the digital assets service provider or a transaction effectuated through such provider (e.g. the person that has acquired digital assets through participation in provision of the service of computer validation of transactions in information systems relating to specific digital assets);
37) Digital assets address shall designate the unique designation (identifier in English) of the virtual location which comprises data on specific digital assets;
38) Stable digital assets shall mean the digital assets issued with the aim of minimising the volatility of value of such assets, and the value of which is linked to the value of the legal tender or one or more property rights which have low volatility of value (e.g. pegging to the official exchange rate of the Dinar or a relatively stable exchange rate of a foreign currency);
39) Smart contract shall mean a computer program or a protocol, based on the distributed database technology or the similar technologies, which, in their entirety or in a part thereof, automatically executes, controls or documents the legally relevant events and actions in compliance with the already concluded contract, where such contract can be concluded electronically through such program or protocol;
40) Business day shall mean the day, i.e. a part of the day during which the digital assets service provider participating in carrying out of a transaction involving digital assets is open for business so that he enables execution of such transaction for the digital assets user.
Types of Digital Assets Services
Article 3
The digital assets services shall include:
1) Receipt, transmission and execution of orders related to purchase and sale of digital assets on behalf of third persons;
2) Purchase and sale services of digital assets for cash and/or scriptural money and/or electronic money;
3) Exchange services of digital assets for other digital assets;
4) Custody and administration of digital assets on behalf of users of digital assets and the related services;
5) Services relating to issuing, offering and selling of digital assets, on a firm commitment basis (underwriting) or without such commitment (agent services);
6) Maintenance of a register of security rights on digital assets;
7) Digital assets acceptance/transfer services;
8) Management of digital assets portfolio;
9) Organization of a digital assets trading platform.
Custody and administration of digital assets on behalf of the digital assets users and the related services shall include control of the means by which the digital assets are accessed (for example, the cryptographic keys), as well as the services related thereto (for example, administration of collaterals).
Management of digital assets portfolio (hereinafter referred to as: portfolio management) shall mean managing of individual portfolios of digital assets based on the mandate from the special contract concluded with the user of digital assets.
Underwriting shall mean the service related to offering and sale of digital assets on a firm commitment basis for the underwriter of the issue to purchase such assets.
Agent services shall mean the services related to offering and sale of digital assets with no commitment on the part of the agent of the issue to purchase such assets.
Digital assets acceptance/transfer service shall mean the service provided by a digital assets service provider to a trader within the meaning of the law regulating trade, by accepting from the consumer the adequate value of the digital assets, which shall correspond to the price of goods sold and/or services provided to such consumer, exchanging it for an adequate amount of the legal tender and transferring such amount to the relevant account of the trader.
The services referred to in paragraph 1, items 2) and 3) of this Article can also be provided by means of a cryptomat.
Activities of Digital Assets Service Providers
Article 4
A digital assets service provider shall be authorized to provide such services upon obtaining the licence from the supervisory authority for provision of digital assets services.
In addition to the digital assets services, a digital assets service provider may carry out only the activities and services which are directly related to the digital assets services.
By way of exception to paragraph 2 of this Article, the legal persons holding the licence granted by the Commission for pursuit of the activity of a broker-dealer company or a market operator in compliance with the law regulating capital market may provide digital assets services in compliance with this Law upon obtaining the licence from the supervisory authority for provision of digital assets services.
Digital Assets Advisory Services
Article 5
Digital assets advisory services (hereinafter referred to as: advisory services) shall include investment advice, provision of investment recommendations, advice relating to capital structure, business strategy, issuing of digital assets and similar issues, as well as other advisory services related to digital assets.
Investment advice shall mean provision of a personal recommendation to a digital assets user in respect of one or several transactions involving digital assets.
Investment recommendation shall mean research or other information intended for the public in which an investment strategy related to digital assets is explicitly or tacitly recommended or proposed.
Exclusions from the Scope of Application of this Law
Article 6
Provisions of this Law shall not apply to digital assets transactions if such transactions are effectuated exclusively within a limited network of persons which are accepting such digital assets (e.g. the use of digital assets for certain products or services, as a form of loyalty or reward, without the possibility of selling or transferring thereof).
Acquiring of digital assets through participation in the provision of computer validation service for transactions in information systems in relation to specific digital assets (the so-called mining of digital assets) shall be permitted, and provisions of this Law shall not apply to the acquirers, during such acquisition.
Holders of digital assets acquired in the manner referred to in paragraph 2 of this Article may freely dispose of such assets, either by using the services of the digital assets service providers, in which case provisions of this Law relating to digital assets users shall apply to such holders, or by carrying out transactions in the OTC market.
Provisions of this Law shall not apply to issuing of electronic money and provision of electronic money services, and instead provisions of the law regulating provision of payment services and issuing of electronic money shall apply.
The supervisory authority may regulate in more detail the conditions and method of applying of the exclusion from application of this Law referred to in paragraph 1 of this Article.
Digital Assets with Characteristics of Financial Instruments
Article 7
The law regulating capital market shall apply to issuing of digital assets which have all the characteristics of a financial instrument, as well as to the secondary trading and provision of services related to such digital assets, unless where prescribed otherwise by this Law.
By way of exception to paragraph 1 of this Article, the law regulating capital market shall not apply to issuing of digital assets which have all the characteristics of a financial instrument or to the secondary trading and provision of services related to such digital assets, if all the following conditions are fulfilled:
1) Digital assets have no characteristics of shares;
2) Digital assets are not fungible for shares;
3) Total value of the digital assets issued over a period of 12 months by a single issuer does not exceed the amount of EUR 3,000,000 in Dinar counter value at the official middle exchange rate of the Dinar against the Euro as determined by the National Bank of Serbia on the date of the issue, i.e. during the primary sale.
The Principle of Technological Neutrality
Article 8
Provisions of this Law shall apply to all digital assets irrespective of the technology on which such digital assets are based, including the stable digital assets.
Provisions of this Law shall apply to provision of all the digital assets services referred to in Article 3 of this Law irrespective of the technology on which provision of such services is based.
The Principle of Efficiency, Cost-Effectiveness and Digitalisation of Procedure
Article 9
A legal or natural person initiating an administrative procedure in compliance with the provisions of this Law (e.g. filing an application for approval of publication of a white paper, an application for issuing of a licence to provide digital assets services, etc.) shall file the relevant application through a special web portal operated by the Republic of Serbia Government service competent for the design, harmonisation, development and functioning of the electronic administration system, and shall enclose with that application the complete documentation laid down by this Law and regulations passed on the basis of this Law whereby proving the fulfilment of conditions for approval of such application.
The documentation referred to in paragraph 1 of this Article shall be filed in one copy, and the National Bank of Serbia and the Commission shall decide on the application within their respective scopes of competences within the prescribed time limit.
An issuer of digital assets and a company that provides, i.e. that intends to provide digital assets services that fall under the competence of both the National Bank of Serbia and the Commission, shall file all data, applications, notices and other documentation to be submitted both to the National Bank of Serbia and the Commission - through the web portal referred to in paragraph 1 of this Article, as a single copy. The time limits for deciding on the application submitted through the web portal referred to in paragraph 1 of this Article shall start to run on the day a duly completed application is received on that portal.
All documentation that is to be submitted to the supervisory authority in compliance with this Law can also be submitted in electronic form in compliance with the law regulating electronic document, electronic identification and trust services in electronic business.
The National Bank of Serbia and the Commission shall ex officio exchange among themselves the data and documents at their disposal, which are required for the decision-making in compliance with this Law, and they may also exchange them via already established electronic channels within the electronic administration system (the so-called Government Service Bus in compliance with the law regulating electronic administration), and other methods used for delivery of electronic documents among public authorities in compliance with the law regulating the electronic document, electronic identification and trust services in electronic business.
Article 10
The National Bank of Serbia shall be competent for the matters under this Law concerning the decision-making in administrative procedures, passing of secondary legislation, supervision of performance of tasks and exercising of other rights and obligations of the supervisory authority in the part relating to virtual currency as a type of a digital asset.
The Commission shall be competent for the matters under this Law concerning the decision-making in administrative procedures, passing of secondary legislation, supervision of the performance of tasks and the exercising of other rights and obligations of the supervisory authority in the part relating to digital tokens as a type of a digital asset, as well as in the part relating to digital assets that have the characteristics of financial instruments.
Concerning the digital assets having the characteristics of both a virtual currency and a digital token, paragraphs 1 and 2 of this Article shall apply mutatis mutandis to decision-making in administrative procedures, passing of secondary legislation, supervision of the performance of tasks and exercise of other rights and obligations of the supervisory authority.
The National Bank of Serbia and the Commission shall cooperate in performance of their respective competences under this Law.
The National Bank of Serbia shall prepare and provide opinions on application of this Law and regulations passed on the basis of this Law in the part relating to virtual currencies as a type of digital assets, with the exception of the application of Article 14 of this Law, and the Commission shall prepare and issue opinions on the application of this Law and the regulations passed on the basis of this Law in the part relating to digital tokens as a type of digital assets, as well as in the part relating to digital assets that have the characteristics of financial instruments.
Article 11
Based on the competences laid down by this Law, the supervisory authority shall decide on the rights, obligations and legal interests of persons in the procedure laid down by this Law.
Provisions of the law regulating general administrative procedure shall apply mutatis mutandis to the procedure referred to in paragraph 1 of this Article, unless where regulated otherwise by this Law.
The supervisory authority may take additional activities in the procedure referred to in paragraph 1 of this Article in order to verify the accuracy of data and documentation submitted by the persons referred to in that paragraph.
The supervisory authority shall pass a decision on an administrative matter that is the subject matter of the procedure referred to in paragraph 1 of this Article.
If the supervisory authority fails to decide on the applicant’s application in the procedure laid down by this Law within the prescribed time limit (the so-called administrative silence), it shall be considered that such application has been adopted on the day following the expiry of the time period for decision-making.
The decision referred to in paragraph 4 of this Article shall be final. Administrative dispute may be conducted against the decision referred to in paragraph 4 of this Article, but the action against that decision may not prevent or defer its enforcement.
In an administrative dispute initiated against the decision referred to in paragraph 4 of this Article, the court may not resolve the administrative matter where the competence of the supervisory authority for deciding thereon is laid down by this Law.
Payments related to Digital Assets
Article 12
All the payments, collections and transfers in Dinars relating to transactions involving digital assets shall be effectuated in accordance with the regulations governing payment services.
All the payments, collections and transfers in foreign currencies relating to transactions involving digital assets shall be effectuated in accordance with the regulations governing foreign exchange operations.
The National Bank of Serbia may regulate in more detail the payments, transfers and collections in foreign currencies referred to in paragraph 2 of this Article.
Prohibition of Owning Digital Assets and Providing Digital Assets Services
Article 13
The financial institutions supervised by the National Bank of Serbia may neither own digital assets or instruments related to digital assets, nor the stakes in the capital of these institutions may be in digital assets.
The financial institutions supervised by the National Bank of Serbia may not be providers or users of digital assets services.
By way of exception to paragraph 2 of this Article, banks may provide the service referred to in Article 3, paragraph 1, item 4) of this Law in the part relating to keeping of cryptographic keys only.
The financial institutions supervised by the National Bank of Serbia and the persons related to these financial institutions may not be the founders, or have a direct or indirect holding in a legal person that provides digital assets services, and these institutions and these persons may not participate in management or be members of the bodies of such legal person or its representatives either, or be the persons that are directly managing the activities of provision of digital assets services in that legal person.
By way of exception to paragraph 4 of this Article, the financial institutions supervised by the National Bank of Serbia may hold ownership stakes in a broker-dealer company and a market operator providing digital assets services, except where prohibited by the law regulating the business operations of the financial institution concerned.
The financial institutions supervised by the National Bank of Serbia may not accept digital assets as collaterals.
By way of exception to paragraph 1 of this Article, the National Bank of Serbia may prescribe conditions under which and the method in which the financial institutions supervised by the National Bank of Serbia may invest in digital tokens that have the characteristics of a financial instrument or that are used exclusively for the investment purpose.
Business Operations of Legal Persons and Sole Traders relating to Digital Assets
Article 14
Virtual currencies may not be used as a stake in companies, and may instead be converted (exchanged) for money and paid into a company as a contribution in money.
The non-monetary contributions into a company may be in digital tokens that are not related to provision of services or execution of work.
By way of exception to paragraph 2 of this Article, the non-monetary contributions into a general partnership and a limited partnership may be also in digital tokens related to provision of services or execution of work.
The list of the digital tokens referred to in paragraph 2 of this Article shall be established by the Commission.
The provisions of the law regulating enforcement and security interest shall apply mutatis mutandis to the procedure of enforced settlement of digital assets claims by judgement creditors.
A company doing business in the Republic with the capacity of a judgement debtor within the meaning of the law regulating enforcement and security interest shall cooperate with the competent authorities in an enforcement procedure in accordance with that law, as well as provide notices and deliver all data required for settlement of claims against digital assets, including the means by which digital assets are accessed (e.g. the cryptographic keys).
Paragraph 6 of this Article shall apply mutatis mutandis to other legal persons and sole traders doing business in the Republic.
The holders of digital assets shall have the status of known creditors, within the meaning of the law regulating companies, in case of liquidation of a company that has liabilities based on such digital assets.
Article 15
The Republic of Serbia, the National Bank of Serbia, the Commission and other competent bodies and government authorities shall not guarantee for the value of digital assets and shall not be held responsible for any damage or loss suffered by the users and other holders of digital assets and/or providers of digital assets services and/or any third persons in relation to the effectuating of digital assets transactions.
Prior to establishing business relations with the users of digital assets or prior to effectuating digital assets transactions, providers of digital assets services shall inform the digital assets users of the risks of effectuating digital assets transactions, including the risk of partial or complete loss of money, and/or other assets, as well as that the regulations governing deposit insurance or investor protection and regulations governing protection of financial service users do not apply to digital assets transactions.
Initial Offering of Digital Assets
Article 16
Provisions of this Chapter shall apply to initial offering of digital assets issued in the Republic.
Issuing of digital assets in the Republic, irrespective of whether the relevant white paper has been produced or approved for it, is allowed.
Advertising of initial offering of digital assets issued in the Republic shall be permitted only in accordance with the provisions of this Chapter.
Advertising of the Initial Offering of Digital Assets for which no White Paper is Approved
Article 17
Initial offering of digital assets for which a white paper has not been approved may not be advertised in the Republic, except where provided so by an act of the supervisory authority.
By way of exception to paragraph 1 of this Article, the issuer may advertise the initial offering of digital assets without an approved white paper in the following cases:
1) Initial offering is addressed to fewer than 20 natural and/or legal persons;
2) Total number of digital tokens to be issued does not exceed 20;
3) Initial offering is addressed to buyers/investors that are buying/investing in digital assets worth no less than EUR 50,000 in Dinar counter value calculated by using the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia on the date of purchase/investment, per buyer/investor;
4) Total value of digital assets issued by a single issuer over a period of 12 months does is less EUR 100,000 in Dinar counter value calculated by using the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia.
Publishing of a white paper that has not been approved in compliance with this Law shall be permitted on condition that it is clearly indicated at the publishing and during the initial offering of digital assets to which the white paper pertains that the white paper concerned has not been approved.
Advertising of the Initial Offering of Digital Assets for which a White Paper is Approved
Article 18
An issuer shall ensure that any type of advertising relating to the initial offering of digital assets for which a white paper has been approved is in compliance with the provisions of this Article.
Advertising, within the meaning of this Article, shall pertain to the advertisement:
1) Relating to a specific initial offering of digital assets;
2) The aim of which is promotion of purchase of the digital assets, i.e. investment in such assets.
The text of the advertisement shall contain a clear notice that it is an advertisement. Information contained in the advertisement must not be inaccurate or misleading and must be consistent with the information from the white paper, if the white paper has already been published, i.e. with the information that must be stated in the white paper, if the white paper is to be published.
When advertising, the issuer shall indicate whether the white paper has been or will be published, specifying where and how investors can obtain it.
Even if not used for advertising purposes, any information relating to the initial offering, communicated orally or in writing, must be consistent with the information contained in the white paper.
If the issuer discloses important information orally or in writing to one or more selected buyers/investors, such information shall be included in the white paper or in its supplement if the white paper has already been approved.
The supervisory authority shall supervise the activities of the issuer related to advertising, and all types of advertisements must be published on the web site of the issuer no later than on the same date on which that advertisement is published.
Article 19
Prior to the issuing of digital assets, the issuer may draw up a white paper containing all necessary data which, having regard to the special characteristics of the issuer and the digital assets offered, enable the investors to make an investment decision and to assess the risks associated with investment in digital assets, and which meets all other conditions prescribed for the white paper in compliance with this Law.
Information stated in the white paper must be concise, clearly articulated and comprehensible and its layout must be conducive to easy analysis.
Data stated in the white paper must be accurate, complete, clear and not misleading.
The white paper referred to in paragraph 1 of this Article shall be approved by the supervisory authority (hereinafter referred to as: approval of white paper publishing).
If the issuer fails to act in accordance with paragraph 1 of this Article or if the publishing of the white paper is not approved in compliance with paragraph 4 of this Article, Article 17 of this Law shall apply to the advertising of the initial offering of digital assets.
Contents of the White Paper
Article 20
The issuer shall ensure that the white paper comprises all information on the issuer and the initial offering that enable the buyers/investors to make an informed decision relating to the purchase of/investment in digital assets and to understand the risks associated with the initial offering and the digital assets offered.
The white paper shall mandatorily comprise the following data and information:
1) Data about the issuer, including the main participants in the design and development of the digital asset;
2) A detailed description of the reasons behind the initial offering and the intended use of the funds raised by the initial offering;
3) Data about the digital asset offered, including a detailed description of the rights and obligations arising from the digital asset, data about secondary trading in digital assets, as well as data about the quantity (number of units) of the digital asset offered, i.e. about the method of determining the quantity of the digital assets offered;
4) A detailed description of the terms of the initial offering, including a detailed description of all the specific terms of the initial offering applicable to different categories of acquirers, in particular in respect of the digital assets acquired by the issuer and the persons related to the issuer, and the success threshold (if any);
5) A description of the risks associated with the issuer, digital assets, initial offering of the digital assets and implementation of project related to that digital asset;
6) A detailed description of the technical procedures based on which the digital assets is issued;
7) A detailed description of the procedures and of the technology applied to safeguard the money and the digital assets raised by the initial offering;
8) A description of the procedures that ensure compliance with the obligations relating to prevention of money laundering and financing of terrorism;
9) Applicable regulations and court jurisdiction;
10) Statements of the responsible persons.
The white paper shall mandatorily comprise a warning about the risks that are typical for the purchase of/investment in digital assets that are subject to the initial offering.
The supervisory authority shall prescribe the contents and additional elements of the white paper in more details.
Responsibility for the Contents of the White Paper
Article 21
The issuer and the responsible person with the issuer, i.e. the representative of the issuer, shall be held liable if the white paper contains incorrect, inaccurate or misleading data, i.e. significant omissions.
In addition to the issuer, the liability for the data referred to in paragraph 1 of this Article shall be borne by:
1) The independent auditors of the issuer (the audit firm, independent auditor and/or licensed certified auditor), solely in connection with the information from the financial statements that have been included in the white paper and covered by their audit report;
2) Another person who takes over the responsibility for the accuracy and completeness of information in the part of the white paper he has assumed responsibility for, solely in connection with that information.
The white paper must contain all information about the persons responsible for the accuracy and completeness of information contained in the white paper. Name, surname and title in the legal person shall be indicated for natural persons and business name, i.e. company name and head office shall be indicated for legal persons.
The white paper must also contain a statement by each person responsible for the accuracy and completeness of information in the white paper, stating that information in the white paper is, to the best of their knowledge, consistent with facts, and that no facts that might affect the accuracy and completeness of the white paper have been omitted.
The supervisory authority shall not be held liable for the accuracy and completeness of information indicated in any part of the white paper whose publishing has been approved.
Submission of Application for White Paper Publication Approval
Article 22
The application for a white paper publishing approval shall be submitted to the supervisory authority by the issuer or an authorised person on behalf of the issuer.
The applicant shall provide the following documentation enclosed with the application referred to in paragraph 1 of this Article:
1) A draft of the white paper drawn up in compliance with the provisions of this Law;
2) The decision of the issuer on the issuing of digital assets;
3) Memorandum of association and articles of association of the issuer;
4) Financial statements of the issuer for the last business year with the auditor’s report, if the issuer has been the obligor of audit in the last year;
5) Relevant documentation attesting to the assertions in the white paper;
6) Proof of payment of the fee to the supervisory authority;
7) Other documentation laid down by the supervisory authority’s regulation.
If the application referred to in paragraph 1 of this Article is submitted by a natural person, the documentation referred to in paragraph 2, items 2) through 4) of this Article shall not be enclosed.
The contents of the documentation that is to be submitted with the application for white paper publication approval and the publication approval procedure for that white paper shall be prescribed in more detail by the supervisory authority.
White Paper Publication Approval
Article 23
The supervisory authority shall approve publication of a white paper by means of a decision.
In the white paper publication approval procedure, the supervisory authority shall check whether the white paper complies with the conditions referred to in Articles 19 through 21 of this Law.
Approval of a white paper publication shall not mean that the supervisory authority has approved appropriateness of the issuing of digital assets or that it has confirmed the financial and technical information disclosed.
The supervisory authority shall pass a decision on white paper publication approval within 30 days from the date of receipt of a duly completed application and deliver it to the applicant.
If the white paper draft does not meet the conditions referred to in this Law or if adequate documentation has not been filed with the application referred to in Article 22, paragraph 1 of this Law or if other conditions have not been fulfilled in order to approve the publication of that white paper, i.e. if any modifications or additional information are needed, the supervisory authority shall notify the applicant thereof within 15 days from the date of receipt of the application and request correction and/or supplement to the documentation i.e. fulfilling of other conditions for the white paper publication approval and set a time limit for the applicant’s actions.
Rejecting of Application for White Paper Publishing Approval
Article 24
The supervisory authority shall reject an application for a white paper publishing approval by means of a decision for one of the following reasons:
1) The application is filed by an unauthorised person;
2) The application is incomplete or incomprehensible and the applicant failed to remedy the application within the time limit left to him;
3) The mandatory fees prescribed by the supervisory authority’s fee list have not been paid;
4) Other conditions for conducting of the procedure have not been fulfilled.
Denying an Application for White Paper Publishing Approval
Article 25
The supervisory authority shall deny an application for a white paper publishing approval by means of a decision for one of the following reasons:
1) The white paper or information, i.e. documentation filed with the application for a white paper publishing approval do not meet the conditions prescribed by this Law or the acts passed in compliance with this Law, and the applicant has failed to remedy that within the time limit left to him;
2) The white paper contains incorrect, inaccurate or misleading information or significant omissions resulting in incorrect, inaccurate or misleading informing of investors, and the applicant has failed to remedy this within the time limit left to him;
3) The applicant is an issuer against which the supervisory authority has imposed one of supervisory measures due to non-compliance with the provisions of the law regulating the capital market, law regulating investment funds, law regulating alternative investment funds, law regulating prevention of money laundering and the financing of terrorism, laws regulating the operations of financial institutions or this Law, and the issuer has failed to comply with the measure imposed;
4) Data in the white paper are not in line with the issuer’s decision on the issuing of digital assets or such data are not in line with other data that needs to be supplied with the application;
5) The decision of the issuer’s competent body on the issuing of digital assets is null and void or rescinded;
6) The preliminary bankruptcy procedure has been initiated against the issuer;
7) The bankruptcy procedure has been initiated against the issue;
8) Liquidation or enforced liquidation has been initiated against the issuer.
The supervisory authority may deny an application for a white paper publishing approval for one of the following reasons:
1) A preliminary procedure for establishing the eligibility for opening a bankruptcy procedure in accordance with pre-packaged reorganisation plan has been initiated against the issuer;
2) The issuer is implementing reorganisation in accordance with the reorganisation plan, i.e. in accordance with the pre-packaged reorganisation plan.
Article 26
If in the period from the date of white paper publication approval until the closing of the initial offering of digital assets a new material fact arise, i.e. if the existence of a material error or imprecision is determined in relation to information from the white that may affect the decision on the purchase of/investment in digital assets, the issuer shall promptly draw up a supplement to the white paper and deliver to the supervisory authority an application for the approval of its publishing.
The issuer shall expeditiously inform the investors on his web site of the submission of a supplement to the white paper to the supervisory authority, as well as to publish the supplement to the white paper immediately upon the approval of its publishing.
Provisions of Articles 19 through 25 of this Law shall apply mutatis mutandis to the decision making of the supervisory authority on the application for the approval of the white paper supplement publishing, and the supervisory authority shall decide on such application within seven days from the date of receipt of a duly completed application for publication approval of such supplement.
The supervisory authority shall publish the supplement to the white paper by applying mutatis mutandis the Article 27, paragraphs 7 and 8 of this Law.
The buyers/investors who have committed to purchase or subscribe for the digital assets prior to the publication of the white paper supplement shall have the right to withdraw from the purchase or subscription of such digital assets within the time limit set in that supplement, which may not be less than two business days from the date of publishing of such supplement.
Publishing of the White Paper upon Approval
Article 27
Upon obtaining the approval for white paper publishing, the issuer shall publish the white paper within a reasonable time limit, but no later than the beginning of the initial offering of the digital assets.
The issuer shall publish the white paper on his web site in Serbian language.
If the white paper is published in more than one language, the Serbian version shall be considered prevailing in case of any differences among different versions of the white paper, except in the case of white paper publishing by an issuer who is a foreign legal person in which case the prevailing version shall be the version in the language determined by the issuer in the white paper.
The white paper that is to be published must be identical to the white paper whose publishing has been approved by the supervisory authority and must not be altered following that approval, except in the cases referred to in Article 26 of this Law.
The white paper shall be published in a separate, specifically dedicated section of the issuer’s web site, which is easily accessible from the website homepage. It must be prepared in such a manner that it is downloadable, printable and in searchable electronic format that cannot be altered.
Access to the white paper shall not be subject to any registration, statements on acceptance of a liability disclaimer or payment of any fee.
The supervisory authority shall publish on its web site all the white papers whose publishing has been approved or a list of such white papers, including hyperlinks to the relevant web site sections referred to in paragraph 2 of this Article. The published list referred to in this paragraph, including the hyperlinks, shall be regularly updated.
All the white papers whose publishing has been approved shall remain publicly available in electronic form for a minimum of ten years upon their publication on the web site referred to in paragraph 2 of this Article.
Subscription and Payment of Digital Assets
Article 28
Where the publishing of the white paper for the initial offering of digital assets has been approved, the time limit for the beginning of subscription and payment of digital assets shall commence within 30 days following the date of receipt/passing of the decision on the white paper publishing approval, at the latest.
Payment of digital assets shall be effectuated in money, in digital assets, and/or in services of the acquirer of such assets (e.g. the transfer of issued digital assets to the persons who are "miners" of those digital assets).
The subscription and payment of digital assets, as well as the transfer of digital assets to lawful holders shall be made in accordance with the characteristics of the technology used to issue the digital assets.
The payment of digital assets in money shall be effectuated in accordance with the law regulating payment services.
Following a successfully completed initial offering of digital assets, the issuer shall promptly notify the supervisory authority thereof.
The supervisory authority may regulate in more detail the procedure for subscription and payment of digital assets.
Report on Outcome of Initial Offering
Article 29
Where the publishing of a white paper for the initial offering of digital assets has been approved, the issuer shall publish a report on the outcome of that initial offering on its web site within three business days at the latest from the date of closing of the initial offering.
The report referred to in paragraph 1 of this Article must contain data on the quantity (number of units) of digital assets purchased, paid-in money, i.e. digital assets, as well as information on whether the initial offering has been successful or not.
The report referred to in paragraph 1 of this Article shall be published in the same manner as the white paper.
The supervisory authority shall prescribe the form and the contents of data that the report referred to in paragraph 1 of this Article should comprise.
Following a successful closing of the initial offering of the digital assets for which publishing of a white paper has been approved, the issuer shall inform the investors on his web site about the secondary trading in digital assets.
III SECONDARY TRADING IN DIGITAL ASSETS
Article 30
The tasks of operating a digital assets trading platform may be performed only by a digital assets service provider licensed to provide the service referred to in Article 3, paragraph 1, item 9) of this Law.
The tasks performed by the platform operator shall be as follows:
1) Bringing together or facilitating of bringing together of different third-party buying, selling, and/or exchange interests in digital assets, on the digital assets trading platform, all in accordance with non-discretionary rules of that platform and in such a manner that results in conclusion of a contract concerning digital assets included in trading;
2) Keeping and disclosure of information on demand, supply, quotation and market prices of digital assets, as well as other information of significance for digital assets trading, both before and after the performed transaction;
3) Establishing and implementation, in compliance with the acts and approval of the supervisory authority, of:
(1) The conditions for acquiring of the status of digital assets user and conclusion of a contract with such a user,
(2) The conditions for admission of digital assets to the digital assets trading platform, exclusion from trading and temporary suspension of trading in some or all types of digital assets,
(3) The conditions for purchase, sale and exchange of digital assets that has been admitted to trading on the digital assets trading platform,
(4) Market supervision of trading in digital assets admitted to the digital assets trading platform in order to prevent and detect non-compliance with the rules concerning the platform, provisions of this Law and acts of the supervisory authority, and in particular non-compliance with the provisions of Chapter IV of this Law,
(5) Procedures for initiating disciplinary proceedings against the digital assets users who behave contrary to the provisions of this Law, acts of the supervisory authority and bylaws of the platform operator,
(6) Procedures for resolution of disputes between the digital assets users, in connection with the transactions in digital assets admitted to trading on the digital assets trading platform;
4) Performance of other tasks relating to the digital assets trading platform in compliance with this Law and the acts of the supervisory authority.
In addition to the tasks referred to in paragraph 2 of this Article, a platform operator may also provide all other digital assets services referred to in Article 3, paragraph 1 of this Law, except the service referred to in item 8) of that paragraph. The platform operator may not provide the investment advisory services referred to in Article 5 of this Law either.
Secondary Trading in Digital Assets
Article 31
Secondary trading in digital assets that are issued in the Republic and in respect of which the white paper is approved in accordance with this Law, as well as the digital assets that are issued abroad and in respect of which the white paper is approved in accordance with this Law shall be permitted.
The provision of digital assets services referred to in paragraph 1 of this Article, as well as the advertising and admission thereof to trading on the digital assets trading platform shall be permitted.
Secondary trading in digital assets that are issued in the Republic and in respect of which the white paper is not approved in accordance with this Law, as well as the digital assets that are issued abroad and in respect of which the white paper is not approved in accordance with this Law shall be permitted.
The provision of digital assets services referred to in paragraph 3 of this Article, as well as the admission thereof to trading on the digital assets trading platform shall be permitted.
Advertising relating to the digital assets referred to in paragraph 3 of this Article shall be permitted only in accordance with the act of the supervisory authority, except in the following cases:
1) A subsequent white paper is approved for such digital assets;
2) The white paper, i.e. a document corresponding to the white paper, is approved for such digital assets in a European Union Member State;
3) It is a case of a digital asset which is to a significant extent traded on the global market through the licensed, i.e. registered platforms in compliance with the European Union regulations governing prevention of money laundering and financing of terrorism, i.e. in compliance with other relevant regulations governing prevention of money laundering and financing of terrorism.
The National Bank of Serbia shall be notified of the admission of the virtual currencies referred to in paragraph 5, item 3) of this Article to trading on a digital assets trading platform by the operator of that platform within 30 days at the latest prior to the admission to trading thereof.
Provisions of this Law regulating white paper publishing approval shall apply mutatis mutandis to the subsequent white paper publication approval referred to in this Article.
The supervisory authority shall regulate in more detail the contents and the method of approval of the subsequent white paper publication referred to in this Article.
Article 32
The companies holding licences of the supervisory authority for the provision of digital assets services, as well as all other legal persons, sole traders and natural persons may trade via the digital assets trading platform in the Republic.
Article 33
The platform operator shall publish the current prices and the volume of supply and demand for digital assets at the prices published via the trading system for the digital assets admitted to trading and such data shall be regularly and continuously provided for public inspection during the usual trading hours, as much as possible in real time.
Article 34
The platform operator shall disclose the price, volume and the time of execution of a transaction in digital assets admitted to trading. Information on all the transactions of that type shall be published on a reasonable commercial basis and as much as possible in real time.
Temporary Suspension of Trading and Exclusion of Digital Assets from Trading
Article 35
The platform operator may temporarily suspend trading in digital assets admitted to trading if it assesses that to be necessary to protect investors or with a view to eliminating risks to smooth or stable trading in digital assets. In such a case, the platform operator shall notify the supervisory authority of the temporary suspension of such trading without delay.
The supervisory authority may order the platform operator to temporarily or permanently suspend trading in specific digital assets if such trading is not performed in compliance with this Law or where that is necessary in order to preserve financial stability.
The platform operator may temporarily suspend trading in specific digital assets or exclude the digital assets from trading if such trading is no longer in compliance with the rules of the platform operator.
The decision on temporary suspension shall be published on the web sites of the platform operator on which such digital assets have been included in trading and of the supervisory authority.
Article 36
The OTC trading in digital assets shall be permitted in the Republic, and the contracting parties shall not be obliged to use the services of any digital assets service provider for the conclusion and implementation of transactions through the OTC trading.
Article 37
The use of smart contracts in secondary trading in digital assets shall be permitted.
If a provider of digital assets services provides services that involve the use of smart contracts, he shall acquire the consent from the digital assets user for the use of smart contracts.
Article 38
The supervisory authority shall apply the prohibitions and the requirements referred to in this Chapter to the activities carried out in the Republic which are related to the digital assets admitted to trading on the digital assets trading platform, i.e. in respect of which the publishing of the white paper or the subsequent white paper has been approved.
Article 39
Insider information shall mean information about specific facts that are not publicly disclosed and are related directly or indirectly to one or more issuers or to one or more types of digital assets, which would, if publicly disclosed, be likely to have a significant impact on the price of such digital assets.
A significant impact on the price of digital assets shall exist if a reasonable investor is likely to take into consideration such information as a part of the basis for making investment decisions.
The information referred to in paragraph 1 of this Article shall mean information about specific facts if they indicate to a number of circumstances which exist or can be reasonably expected to come into existence, or to an event which took place or may be reasonably expected to take place, if they are specific enough to enable making conclusions about the potential influence of such number of circumstances or events on the price of digital assets.
For the persons responsible for carrying out orders in relation to digital assets, insider information shall also mean information about specific facts obtained from a digital assets user in relation to future orders of that user, relating directly or indirectly to one or more issuers or to one or more types of digital assets, which would, if publicly disclosed, be likely to have a significant effect on the price of such digital assets.
Prohibited Abuse of Insider Information
Article 40
No person in possession of insider information shall be allowed to use such information directly or indirectly when acquiring, disposing of or in attempted acquisition or disposal for own account or for the account of a third person of the digital assets to which such information is related.
Provisions of paragraph 1 of this Article shall apply to the person who has come into possession of insider information through:
1) Membership in issuer’s management;
2) A stake in issuer’s capital;
3) Access to information obtained in the regular course of employment duties, profession or other duties;
4) Criminal offences perpetrated by the person.
If the person referred to in paragraph 2 of this Article is a legal person, the prohibition referred to in that paragraph shall additionally relate to the natural persons participating in decision making on effectuating of the transaction for the account of a specific legal person.
Provisions of this Article shall not apply to the transactions effectuated when executing of a due obligation of acquiring or disposal of digital assets, if such an obligation is a result of a contract concluded before the person came into possession of insider information.
Exchange of Insider Information
Article 41
No person referred to in Article 40 of this Law shall be permitted to:
1) Disclose and make available insider information to any other person, except where such information is disclosed and made available in regular business operation, profession or duty;
2) Recommend or induce another person to acquire or dispose of, based on inside information, the digital assets to which such information relates.
Other Persons Subject to Prohibition of Abuse of Insider Information
Article 42
Provisions of Articles 40 and 41 of this Law shall additionally apply to other persons in possession of insider information, who know or should have known that the information is insider information.
Mechanisms and Procedures for Prevention of Abuse of Inside Information
Article 43
The sheer fact that a legal person possesses or possessed insider information does not imply that such person has used that information in trading, i.e. that it traded based on inside information, if such legal person has introduced, implemented and maintained appropriate and effective internal mechanisms and procedures that are preventing abuse of insider information.
The internal mechanisms and procedures preventing abuse of insider information shall be such that they ensure that not a single natural person who, in the name of the legal person, has made a decision on acquisition or disposal of digital assets to which information relates, or any other natural person who could have influenced such a decision, possessed insider information, i.e. that no natural person has encouraged, recommended or otherwise influenced the natural person who, in the name of a legal person, has made the decision on acquisition or disposal of digital assets to which such information related.
Publishing of Insider Information that directly relate to the Issuer
Article 44
The issuer shall without delay inform the public of the insider information directly relating to such issuer.
The issuer shall not be allowed to inform the public of information referred to in this Article in a misleading manner.
The issuer shall inform the public in a manner that is enabling fast access to information and the possibility of complete, accurate and timely assessment of such information.
The issuer shall publish on his web site all inside information that he is obliged to publicly disclose and shall make such information available for five year at the minimum from the date of disclosure.
The supervisory authority shall prescribe which facts should be taken into consideration when making the decision on publishing of insider information.
Change in Insider Information directly relating to the Issuer
Article 45
Each material change in respect of the information referred to in Article 44 of this Law that has already been published must be promptly disclosed by the issuer immediately after the change takes place, in the same manner in which the original information has been published.
Delayed Public Disclosure of Insider Information
Article 46
The issuer may, on his own responsibility, delay the public disclosure of information referred to in Article 44 of this Law in order not to violate his own legitimate interests, on condition that such delay would not mislead the public and the issuer can ensure confidentiality of such information.
The issuer referred to in paragraph 1 of this Article shall without any delay notify the supervisory authority of his decision to delay the public disclosure of insider information.
The supervisory authority shall prescribe in more detail the circumstances that may be indicative of the existence of legitimate interest referred to in paragraph 1 of this Article, as well as the measures and solutions that the issuer shall be obliged to implement in order to ensure confidentiality of insider information.
Disclosure of Insider Information in the Regular Business Operation, Profession and Duties
Article 47
If the issuer or a person acting on behalf of him or for his account, discloses insider information to a third party in the regular course of his business operation, profession or duties, he shall publicly disclose such information in its entirety, at the same time in case of intentional disclosure and without any delay in case of inadvertent disclosure, unless where the person receiving such information is obliged to keep such information as confidential.
Article 48
Market sounding shall include communicating of information to one or more potential investors prior to the transaction, in order to gauge the interest of potential investors in a possible transaction and the conditions thereof, such as the potential scope or price, by:
1) An issuer;
2) A seller of digital assets in the secondary market in such quantity or value that the transaction is distinct from ordinary trading and includes the method of sale that is based on prior interest assessment by the potential investor;
3) A third party acting on behalf or for the account of the persons referred to in items 1) and 2) of this paragraph.
The market participant communicating information in compliance with paragraph 1 of this Article shall consider whether he shall include the publishing of insider information in market sounding, and shall compile thereon and update written records which he shall submit to the supervisory authority upon request.
This obligation shall apply to each publishing of information during market sounding.
Disclosure of insider information shall not constitute market abuse if the person disclosing information before the disclosure:
1) Obtains the consent of the person participating in market sounding to receive insider information;
2) Notifies the person participating in market sounding that he is prohibited from using or attempting to use such information, in such a manner that he acquires or disposes of the digital assets to which such information relates, for his own account or for the account of a third party, directly or indirectly;
3) Notifies the person participating in market sounding that he is prohibited from using or attempting to use such information, in such a manner that he withdraws or modifies the order that has already been issued and connected to the digital assets to which such information relates;
4) Notifies the person participating in market sounding that he is obliged to keep the obtained information as confidential.
The disclosing person shall compile and keep records of all information given to the persons participating in market sounding, the identity of potential investors to whom information has been disclosed, as well as of the legal and natural persons acting on behalf of the potential investors, and the date and time of each disclosure.
When the information disclosed in the course of a market sounding ceases to be insider information according to the assessment of the disclosing person, that person shall notify the person referred to in paragraph 4 of this Article thereof as soon as possible, and shall deliver the records thereof to the supervisory authority.
Notwithstanding the provisions of this Article, the person participating in market sounding shall assess on his own whether he possesses insider information, as well as when he shall cease to possess it.
The disclosing person shall keep the records referred to in this Article for a period of five years at the minimum from the date of disclosure of such information.
The supervisory authority may prescribe in more detail the conditions and the method of market sounding and records keeping within the meaning of this Article.
Article 49
Market manipulations shall include:
1) Transactions and orders for digital assets trading:
(1) Whereby false or misleading signals or information on supply, demand or the price of digital assets are given or will likely to be given,
(2) Whereby a person i.e. persons acting in collaboration maintain the price of one or more digital assets at an abnormal or artificial level, unless where the person participating in the transaction or issuing the order proves that he has legitimate reasons for that and that these transactions and orders comply with the accepted practices on that market;
2) Transactions or orders for digital assets trading in which fictitious actions or any other form of deception and fraud are used;
3) Dissemination of information through the media, including the internet, or by any other means, which transmits i.e. might transmit false news that can be misleading about digital assets, including the dissemination of rumours and false and misleading news, by the person who knew or ought to have known that such information is false or misleading;
4) Transmitting false or misleading information or providing false or misleading inputs in relation to a benchmark when the person transmitting the information or providing the input knew or should have known that they were false or misleading, or any other action manipulating the calculation of the benchmark.
The dissemination of information referred to in paragraph 1, item 3) of this Article by the journalists performing their professional duty shall be assessed by taking into account the rules governing their profession, unless such persons derive, directly or indirectly, benefits or advantages from the dissemination of such information.
The actions and behaviour considered to be market manipulation, which are arising from the provisions of paragraph 1 of this Article, shall in particular include the following:
1) The activities of one or more persons that are acting in collaboration in order to secure a dominant position over the supply or demand of digital assets, which results in fixing, directly or indirectly, of the purchase or sale prices, or creation of other unfair trading conditions;
2) Purchase or sale of the digital assets at the beginning or towards the end of the trading day, which has or could have a misleading effect on investors that are making decisions on the basis of the prices published, including the opening or closing prices;
3) Taking advantage of occasional or regular access to traditional or electronic media by voicing an opinion about digital assets or indirectly about the issuer, specifically by having previously taken a position in such digital assets and profiting subsequently from the impact of the opinion voiced on the price of digital assets by that person, without having simultaneously publicly disclosed the existence of the conflict of interest in a proper and efficient manner.
The supervisory authority shall regulate in more detail the actions that can be considered to be market manipulations and the obligations of the supervisory authorities and providers of digital assets services with the aim of preventing and detecting such manipulations.
Prohibition of Market Manipulation
Article 50
The market manipulations referred to in Article 49 shall be prohibited.
The persons participating in market manipulations shall be held jointly and severally liable for any damage incurred as a consequence of a market manipulation.
The operator of the digital assets trading platform shall prescribe and implement the procedures and measures aimed at detecting and preventing manipulations on that platform, as well as to fully assist the supervisory authority in examining such manipulations and implementing supervisory measures.
Article 51
Providers of digital assets services shall, based on data available to them, notify the supervisory authority of the cases for which they have reasonable grounds to suspect to be market abuse.
V PROVIDERS OF DIGITAL ASSETS SERVICES
1. The Legal Form, Capital and Licence to Provide Services
Legal Form of Digital Assets Service Providers
Article 52
A digital assets service provider must have the legal form of a company within the meaning of the law regulating companies.
Application of the Law Regulating Companies
Article 53
Provisions of the law regulating companies shall apply to the digital assets service providers unless where they are contrary to this Law.
Minimum Capital
Article 54
The minimum capital of the company submitting an application for licensing for the provision of digital assets services may not be less than:
1) EUR 20,000 in Dinar counter value at the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia - where the company intends to provide the digital assets services referred to in Article 3, paragraph 1, items 1) through 6) of this Law;
2) EUR 50,000 in Dinar counter value at the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia - where the company intends to provide the digital assets services referred to in Article 3, paragraph 1, items 7) and 8) of this Law;
3) EUR 125,000 in Dinar counter value at the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia - where the company intends to provide the digital assets services referred to in Article 3, paragraph 1, item 9) of this Law.
By way of exception to paragraph 1, item 3) of this Article, where the company intends to operate a platform for trading in digital tokens of a single issuer, the minimum capital of that company may not be less than EUR 20,000 in Dinar counter value at the official middle exchange rate of the Dinar against the Euro determined by the National Bank of Serbia.
The minimum capital referred to in this Article may be monetary and non-monetary (e.g. in software), where at least one half of the minimum capital must be subscribed and paid in money.
A digital assets service provider shall ensure that his capital is always maintained at a level not smaller than the minimum capital amount referred to in paragraphs 1 and 2 of this Article.
The supervisory authority shall prescribe the method of calculating the capital referred to in paragraph 4 of this Article.
In case that the capital of the digital assets service provider falls below the amount of capital referred to in paragraph 4 of this Article, the supervisory authority shall order such a digital assets service provider to remove the irregularities within a specified period, i.e. impose some of the supervisory measures prescribed by the provisions of this Law.
The supervisory authority may determine that the capital requirement amount for a digital assets service provider shall be calculated by applying one of the following methods:
1) The method of total value of digital assets transactions, i.e. of total value of digital assets kept and administered by that digital asset service provider;
2) The fixed costs method.
The method referred to in paragraph 7 of this Article that shall be universally applied to all digital assets service providers, the calculation method for the capital and the capital requirement in compliance with this method, as well as the method and the time limits for reporting on the capital and the capital requirement shall be regulated in more detail by the regulation of the supervisory authority.
Providers of Advisory Services
Article 55
A provider of advisory services shall not be obliged to acquire a licence from the supervisory authority for provision of these services.
A provider of advisory services may provide the digital assets services upon having obtained the licence from the supervisory authority for the provision of such services in compliance with this Law.
The provider of advisory services shall have the legal form of a company or of a sole trader or to be registered as a natural person who is pursuing a free profession as a business in compliance with specific regulations.
If a provider of advisory services operates without a licence of the supervisory authority, he shall communicate that to each one of his users, as well as to display such information on his web site.
The digital assets service providers may also provide advisory services.
Licensing Application
Article 56
A company intending to provide digital assets services shall submit a licensing application for provision of digital assets services to the supervisory authority.
The following shall be enclosed with the application referred to in paragraph 1 of this Article:
1) The decision on entry in the register of business entities;
2) The list of services referred to in Article 3, paragraph 1 of this Law that the applicant intends to provide;
3) The general acts of the applicant;
4) The program of activities regulating in more detail the method and the conditions of provision of digital assets services;
5) The business plan with the revenue and expenditure projection for the period of the initial three years of operation, based on which it can be concluded that the applicant will be capable of ensuring fulfillment of relevant organisational, personnel, technical and other conditions for continuous, stable and sound operation, including the number and type of the expected digital asset users, as well as the expected volume and amount of digital assets transactions, notably for each type of digital assets service that he intends to provide;
6) A description of the planned measures for the protection of monetary funds of the digital assets users in compliance with Article 78 of this Law;
7) A description of the management system and of the system of internal controls in compliance with Article 92 of this Law;
8) A description of internal control measures that are established in order to fulfil the obligations laid down by the regulations governing prevention of money laundering and financing of terrorism;
9) A description of planned measures of employee training relating to effectuating digital assets transactions;
10) A description of the organisational structure, including information on the planned outsourcing of individual operational tasks relating to the provision of digital assets services;
11) A description of the planned measures to manage the security of the information and communications system;
12) Data on persons who are members of the applicant’s management and persons that will directly manage the activities of the provision of digital assets services (hereinafter referred to as: the manager of the digital assets service provider), inclusive of data and proof of good business reputation of these persons in compliance with Article 60 of this Law;
13) Data on persons with qualifying holding in the applicant, the amount of their holding, as well as proof of eligibility of these persons in compliance with Article 65 of this Law;
14) Data on the external auditor that is auditing the applicant’s financial statements in the year in which the application is submitted, where the applicant is subject to the mandatory audit of financial statements in compliance with law;
15) Data on the persons closely related to the applicant and the descriptions of these relations;
16) Proof of possession of the minimum capital referred to in Article 54 of this Law;
17) Proof that the applicant has not been convicted by means of a final judgement of a criminal offence, as well as that it is not subject to any criminal proceeding within the meaning of the law regulating liability of legal persons for criminal offences, as well as that it has not been convicted by means of a final judgement of an economic offence which makes it unfit for provision of digital assets services within the meaning of the law regulating economic offences;
18) Proof of fee payment in compliance with the fee list of the supervisory authority.
By way of exception from paragraphs 1 and 2 of this Article, the bank that is intending to provide the service referred to in Article 3, paragraph 1, item 4) of this Law in the part relating to keeping of cryptographic keys shall, 30 days prior to the beginning, i.e. termination of the provision of that services at the latest, notify the National Bank of Serbia of the intention to begin or to terminate providing such service, as well as to deliver to it enclosed with the notification of the intention to begin providing that service the documentation referred to in paragraph 2, items 4) through 11) and item 18) of this Article. The time limit referred to in this paragraph shall be calculated from the date of delivery of the duly completed documentation referred to in that paragraph.
Data on the persons referred to in paragraph 2, items 12) through 15) of this Article shall in particular be considered to be:
1) For the natural persons:
(1) The name and surname of the natural person,
(2) The address of domicile i.e. residence of the natural person (place, street and number), and the name of the country for the natural person without the citizenship of the Republic,
(3) The unique citizen’s identification number, i.e. another equivalent identifier for the natural person without the citizenship of the Republic (e.g., the passport number or a records number determined by the competent state authority);
2) For the legal persons:
(1) The business name or the shortened business name of the legal person,
(2) The address of the head office of the legal person (place, street and number), enclosed with the name of the country for the legal person that has no head office in the Republic,
(3) Registration number of the legal person, i.e. another relevant identifier of the legal person without the head office in the Republic (e.g. the records number determined by the competent state authority),
(4) The tax identification number of the legal person.
In addition to the data referred to in paragraph 4 of this Article, information on persons shall also include other data and documents comprising information on persons that need to be submitted in compliance with paragraph 2, items 12) through 15) of this Article (e.g., information and proof of good business reputation of these persons). The supervisory authority shall prescribe in more detail the conditions for and the method of licensing for provision of digital assets services, and may also prescribe additional documentation that is to be delivered with the application for such licensing.
Decision Making on Licensing
Article 57
The supervisory authority shall decide on a licensing application for provision of digital assets services within 60 days from the date of receipt of the duly completed application.
If the application referred to in paragraph 1 of this Article is not duly completed, the supervisory authority shall, within 20 days from the date of receipt of that application, notify the applicant of how to complete that application, in which case the time limit referred to in paragraph 1 of this Article shall run from the date of submission of a duly completed application in compliance with the notification referred to in this paragraph.
The supervisory authority shall pass a decision on granting the licence when it determines that all the conditions are fulfilled in compliance with this Law.
In the decision on granting licence for the provision of digital assets services, the supervisory authority shall indicate the services referred to in Article 3, paragraph 1 of this Law that the digital assets service provider is authorized to provide.
The supervisory authority shall reject the application referred to in paragraph 1 of this Article when it establishes that:
1) One or more conditions for obtaining the licence referred to in this Law and the regulations passed on the basis of this Law are not fulfilled;
2) The applicant’s management members and the manager of the digital assets service provider do not have a good business reputation in compliance with this Law;
3) Due to close relations between the applicant and other persons, the exercise of supervision over the digital assets service provider in accordance with this Law would be made impossible or significantly hindered;
4) The applicant’s ownership structure is such that the efficient supervision of the applicant would be made impossible;
5) The internal control measures established in order to fulfil the obligations laid down by the regulations governing prevention of money laundering and financing of terrorism are not adequate;
6) The application contains incorrect, misleading data or necessary data have been omitted, so that the assertions in the application cannot be verified.
If the supervisory authority rejects the application referred to in paragraph 1 of this Article, the relevant applicant may not submit a new licensing application for the provision of digital assets services within one year from the date of passing of the decision of the supervisory authority.
Supplement to the Licence for Service Provider
Article 58
If the provider of digital assets services intends to additionally provide the services referred to in Article 3, paragraph 1 of this Law which are not determined in the decision on licence granting to that provider of digital assets services, he shall submit to the supervisory authority an application for a licence supplement.
Provisions of Articles 56 and 57 of this Law shall apply mutatis mutandis to the decision making procedure on the application referred to in paragraph 1 of this Article.
Change of Circumstances Following the Granting of a License to a Digital Assets Service Provider
Article 59
A digital assets service provider shall notify the supervisory authority without delay of any changes of facts or circumstances based on which the licensing decision referred to in Article 57 of this Law has been granted to that service provider, as well as to at the same time deliver to that authority the modified documentation and data laid down in Article 56 of this Law.
In the notification referred to in paragraph 1 of this Article, the digital assets service provider shall describe in more detail the nature and the scope of the occurred changes.
Management of Digital Assets Service Providers
Article 60
A management member and a manager of the digital assets service provider must have a good business reputation.
The following may not be a management member or the manager of the digital assets service provider:
1) A person convicted by a final judgment of criminal offences against economy, property, legal transactions, public order and official duty or judiciary, or of the criminal offences of money laundering or terrorism financing or of similar or comparable criminal offences in accordance with regulations of a foreign state, and/or of another criminal and/or punishable offence making this person unfit to perform this function;
2) A person whose associate is convicted by means of a final judgment of the criminal offences referred to in item 1) of this paragraph;
3) A person against whom a final protective measure of a ban on pursuit of a business activity has been imposed, which makes him unfit to perform this function;
4) A person who on the date of revocation of the legal person’s business licence, i.e. on the date of introduction of receivership or initiation of the bankruptcy or enforced liquidation procedure in the legal person has been authorised to act as an agent and to represent that legal person or has been a member of the management of that legal person, other than the receiver, unless where more than two years has passed from the initiation of the bankruptcy or enforced liquidation procedure.
The provider of digital assets services shall acquire consent from the supervisory authority for the election of the management member and the manager of that service provider in compliance with Article 61 of this Law, as well as to notify the supervisory authority of the dismissal i.e. resignation of the management member or manager of that service provider on the date following the date of such dismissal, i.e. resignation at the latest.
The management member of the provider of digital assets services referred to in this Article shall mean the director, executive director, an executive board member as well as the legal representative of the general partnership and limited partnership within the meaning of the law regulating companies, i.e. a third person to whom the management authority in the general partnership or limited partnership has been assigned.
The management member and the manager of the provider of digital assets services may not be the members of the board of a service provider with supervisory functions in that service provider.
The supervisory authority shall prescribe the more detailed mandatory conditions to be fulfilled by the management member and the manager of the digital assets service provider, as well as the proofs to be delivered with the application for consent granting i.e. the notice referred to in paragraph 3 of this Article.
Granting Consent to the Election of the Management Member and Manager of the Digital Asset Service Provider
Article 61
The supervisory authority shall pass a decision on granting consent to the election of the proposed management members and the manager of the digital assets service provider based on proofs that the conditions prescribed by this Law and the regulations passed on the basis of this Law have been fulfilled and when it has assessed that the proposed management members and the manager of that service provider have a good business reputation.
The decision referred to in paragraph 1 of this Article shall be passed by the supervisory authority within 30 days from the date of receipt of the duly completed application for consent granting referred to in that paragraph.
If the application for consent granting referred to in paragraph 1 of this Article is not duly completed, the supervisory authority shall, within 15 days from the date of receipt of such application, notify the applicant of how to complete that application, in which case the time limit referred to in paragraph 2 of this Article shall begin to run from the date on which a duly completed application is submitted in compliance with the notice referred to in this paragraph.
The supervisory authority shall also grant consent, by means of the decision on granting a licence for provision of digital assets services, to the election of the management member and manager of the provider of digital assets services.
Revocation of the Consent to Election of a Management Member and Manager of the Provider of Digital Assets Services
Article 62
The supervisory authority shall revoke the consent to the election of a management member and manager of the provider of digital assets services where:
1) That person within six months from the date of passing of the decision on consent granting does not take office;
2) It determines that the management member or manager does not fulfil the conditions under which the consent has been granted;
3) It determines that the consent has been granted based on false, incorrect or misleading data, i.e. in some other irregular manner;
4) It determines that the management member or manager is in conflict of interests and therefore cannot fulfil his obligations and duties;
5) It determines that the management member or manager has breached the ban on trading or effectuating transactions, i.e. issuing trading orders based on market abuse;
6) It determines that the management member or manager has committed a grave breach, i.e. has repeatedly breached the provisions of this Law or other laws, in particular where this has jeopardised the liquidity or maintenance of capital of the digital assets service provider or where it is about a repeated violation of regulations, two times in three years;
7) It determines that the management member or manager has been deprived of legal capacity by means of a final decision;
8) It determines that the management member or manager has not ensured implementation, or has not implemented the measures ordered by the supervisory authority, or has not enabled the supervisory authority to smoothly carry out supervision.
The supervisory authority may revoke the consent to the election of the management member or manager of the digital assets service provider if:
1) The management member or the manager has not ensured adequate organisational, personnel and technical conditions in compliance with this Law;
2) In other cases where it determines that the management member or manager has breached this Law or the acts of the supervisory authority.
The management member, i.e. manager shall cease to perform all the functions in the digital assets service provider from the date of serving of the decision on revocation of the consent to the election of the management member, i.e. manager of the digital assets service provider.
The management of the digital assets service provider shall, within 30 days from the date of serving of the decision referred to in paragraph 3 of this Article at the latest, submit to the supervisory authority an application for granting consent to the appointment of a new management member, i.e. manager.
Personnel, Organisational and Technical Capacity
Article 63
At the time of granting of the licence and during operation, a digital assets service provider shall keep the conditions of personnel, organisational and technical capacity prescribed by the act of the supervisory authority fulfilled, including also the possessing of the data processing system and maintaining continuity and regularity in the provision of services and performance of activities.
A digital assets service provider shall establish adequate rules and procedures which shall ensure that the business operation of the company, its management and the manager, as well as of the employees, is compliant with the provisions of this Law and the acts of the supervisory authority.
A company pursuing the business activity of a platform operator shall, at the time of granting the licence and during operation:
1) Possess the systems for clear detection and correction of the potential negative consequences for the functioning of the digital assets trading platform and the participants in trading, which arise from the conflict of interests between the platform operator and its owners on the one hand, and stable functioning of the platform, on the other hand, particularly where such conflicts of interests can be detrimental to the functions performed by the platform operator in accordance with the provisions of this Law and the acts of the supervisory authority;
2) Be adequately equipped in order to manage the risks to which it is exposed, implement adequate measures and systems for identification of all the significant risks to its operation, and adopt effective measures with the aim of mitigating these risks;
3) Possess the procedures for stable management of the technical functioning of its systems, including establishing of effective systems in cases of unforeseen circumstances, all with the aim of countering the risks of system stoppage;
4) Have transparent and binding rules and procedures whereby fair and regular trading shall be enabled and objective criteria for efficient execution of orders shall be established;
5) Possess effective procedures facilitating efficient and timely conclusion of the transactions that are executed within these systems;
6) Have at its disposal sufficient financial means to facilitate regular functioning of the digital assets trading platform, given the nature and the volume of transactions concluded on the platform, as well as the scope and the degree of risks to which it is exposed.
The supervisory authority shall prescribe in more detail the conditions concerning the personnel and organizational capacity, as well as the technical and informational capacity of the digital assets service provider, in particular by taking into account the concrete market circumstances, significant risks, potential conflicts of interests, financial resources and the necessary professional and technical and informational capacity.
General Acts of the Provider of Digital Assets Services
Article 64
The general acts of the provider of digital assets services shall be the articles of association, i.e. the memorandum of association and the operating rules of the company.
The supervisory authority shall provide prior consent to the general acts of the providers of digital assets services referred to in paragraph 1 of this Article, as well as to the amendments and/or supplements to these general acts.
Person with Qualifying Holding in the Providers of Digital Assets Services
Article 65
A person with qualifying holding in a digital assets service provider shall at all times comply with the following eligibility criteria for the purpose of ensuring stable and safe management of such service provider:
1) To have good business reputation;
2) That the associate of the person with qualifying holding in the digital assets service provider has good business reputation;
3) That the management members of the legal person with qualifying holding in the provider of digital assets services and the persons closely related to that legal person have good business reputation;
4) That the financial standing of the person with qualifying holding in the provider of digital assets services is adequate;
5) That conducting of supervision of the digital assets service provider in accordance with this Law is not made impossible or significantly hindered due to the close connections of the person with qualifying holding with other persons;
6) That the corporate group to which the legal person with qualifying holding belongs is transparent and that it is possible to fully determine the ownership of all persons with direct or indirect ownership in that legal person, as well as each direct or indirect ownership of that legal person in other legal persons;
7) That the business and other activities of the person with qualifying holding are not connected with money laundering or financing of terrorism, that they do not jeopardise the stability and safety of operation of the digital assets service provider, as well as that they do not prevent or significantly hinder the exercise of supervision of the digital assets service provider;
8) That it is possible to determine the source of funds for acquiring of the qualifying holding.
The supervisory authority shall prescribe in more detail the eligibility conditions that the persons with qualifying holding in a provider of digital assets services must fulfil.
In addition to the conditions referred to in paragraph 1 of this Article, the supervisory authority may also prescribe other eligibility conditions that the person with qualifying holdings in a provider of digital assets services must fulfil.
Prior Consent to Acquisition, i.e. Increase of Qualifying Holding
Article 66
A person intending to acquire qualifying holding in a provider of digital assets services or increase it so as to gain 20% to 30%, more than 30% to 50% or more than 50% of the voting rights or capital in such service provider, i.e. so that it becomes its parent company - shall acquire a prior consent from the supervisory authority for such acquisition, i.e. increase.
The supervisory authority shall decide on the application for granting consent referred to in paragraph 1 of this Article within 30 days from the date of receipt of a duly completed application.
If the application for consent granting referred to in paragraph 1 of this Article is not duly completed, the supervisory authority shall, within 15 days from the date of receipt of that application, notify the applicant of how to complete that application, in which case the time limit referred to in paragraph 2 of this Article shall run from the date of submission of a duly completed application in compliance with the notification referred to in this paragraph.
By means of the decision granting consent referred to in paragraph 1 of this Article, the supervisory authority shall determine that the person referred to in that paragraph is obliged to acquire, and/or increase the qualifying holding in the provider of digital assets services within one year from the date of delivery of that decision at the latest.
The consent referred to in paragraph 1 of this Article shall cease to be valid if the person referred to in that paragraph fails to acquire i.e. increase the qualifying holding in the provider of digital assets services within the time limit referred to in paragraph 4 of this Article, and if he acquires within that time limit i.e. increases that holding, but not on the level for which that consent has been granted, such consent shall further on be valid only for the level of the acquired i.e. increased qualifying holding in that provider of digital assets services.
The applicant referred to in paragraph 2 of this Article must comply with the eligibility conditions referred to in Article 65 of this Law.
Article 68 of this Law shall apply mutatis mutandis to the decision making procedure on the application for granting consent referred to in paragraph 2 of this Article.
The supervisory authority shall prescribe the proofs, documentation and data that the person referred to in paragraph 1 of this Article is obliged to submit with the application referred to in paragraph 2 of this Article.
Joint Action during Acquisition, i.e. Increase of Qualifying Holding
Article 67
It shall be considered that, for the purpose of acquiring i.e. increasing of the qualifying holding in a provider of digital assets services, the following persons act as a single acquirer:
1) The legal person and persons participating in direction or management of that legal person or another legal person closely related to that legal person;
2) The legal person and the persons directly appointed and dismissed by the management body of that legal person or of another legal person with which that legal person is closely related;
3) The legal person and the representatives and liquidators of that legal person or of another legal person with which that legal person is closely related;
4) The natural persons considered to be the related persons within the meaning of the law governing companies;
5) The legal persons in which the persons referred to in item 4) of this paragraph participate in directing or managing or have a controlling holding in them;
6) The legal persons - members of the same corporate group;
7) The persons participating in direction or management of the same legal person;
8) The persons with controlling holding in the same legal person;
9) The person enabling another person to secure the means for acquisition, i.e. increase of the qualifying holding in the provider of digital assets services and that other person;
10) The principal and the proxy;
11) Two or more legal or natural persons not related as referred to in items 1) through 10) of this paragraph, which are related in such a manner that there is a possibility that due to deterioration or improvement of the financial standing of one person, the financial standing of the other person or more of them deteriorates or improves, and the supervisory authority, based on documentation and data it has at its disposal, assesses that there is a possibility of transfer of loss, gain or creditworthiness.
For the purpose of acquisition, i.e. increase of qualifying holding in a provider of digital assets services, a person shall act as a single acquirer with another person even where there is no relation between them referred to in paragraph 1 of this Article, but each one of these persons acts as a single acquirer with the same third party, in one of the manners laid down in that paragraph.
Associates and Business Reputation
Article 68
A legal person intending to provide digital assets services shall, when submitting the application referred to in Article 56 of this Law, as well as upon request of the supervisory authority, provide the list of associates of the persons acquiring a qualifying holding, management member and the manager of the provider of digital assets services, as well as the beneficial owner of the provider of digital assets services within the meaning of the law governing prevention of money laundering and financing of terrorism, with proof of non-conviction of the associates, for the purpose of assessing their business reputation.
Within the meaning of this Law, an associate shall be considered to be:
1) Any natural person who is a management member or another responsible person in a legal person whose beneficial owner is a person that has, i.e. that acquires a qualifying holding in the provider of digital assets services or in which this person is a management member or is holding some other managing position;
2) Any natural person who is a beneficial owner of the legal person in which the person referred to in item 1) of this paragraph is a management member or is holding another managing position;
3) Any natural person who together with the person referred to in item 1) of this paragraph holds beneficial ownership of the same legal person.
Provisions of paragraph 2 of this Article shall apply mutatis mutandis to the associate of the management member and manager of the provider of digital assets services, as well as to the beneficial owner of the provider of digital assets services within the meaning of the law governing prevention of money laundering and financing of terrorism.
Proof of associate’s non-conviction referred to in paragraph 1 of this Article shall be considered to be the proof that the associate is not a person who is finally convicted of the criminal and/or other punishable offenses referred to in Article 60, paragraph 2, item 1) of this Law.
Where due to duly justified reasons proof of associate’s non-conviction referred to in paragraph 1 of this Article cannot be procured, the applicant referred to in that paragraph may also provide a statement made under material and criminal liability that his associates have not been convicted. The supervisory authority may, at any given moment, request from that applicant to provide proof of non-conviction of these persons or request such proof directly from the competent authority.
Broker-dealer Companies and Market Operators in Accordance with the Law Regulating Capital Market
Article 69
When submitting applications for a licence to provide digital assets services, the broker- dealer company and the market operator holding the licence of the Commission in compliance with the law governing capital market shall submit an application for granting of that licence, with which they shall provide the documentation referred to in Article 56, paragraph 2 of this Law, other than the documentation referred to in that paragraph that the broker-dealer company i.e. market operator has already submitted to the supervisory authority in compliance with the law governing capital market and which does not change due to the submission of application for granting licence to provide digital assets services (e.g. decision on entry in the register of business entities, data on management members, data on persons with a qualifying holding, proof of possession of minimum capital, etc.).
The documentation referred to in Article 56, paragraph 2, item 12) of this Law shall be submitted by the broker-dealer company and the market operator referred to in paragraph 1 of this Article only if the persons that will directly manage the tasks of provision of digital assets services are not at the same time the management members.
The broker-dealer company and the market operator referred to in paragraph 1 of this Article shall provide the technical, personnel and organisational separation of performance of activities for which they hold licence in compliance with the law that regulates capital market from the performance of activities for which they hold a licence in compliance with this Law.
The broker-dealer company and the market operator referred to in paragraph 1 of this Article shall perform the activities for which they hold a licence in compliance with this Law in such a manner as neither to jeopardize the stability and safety of the part of their business related to performance of activities for which they hold a licence in compliance with the law regulating capital market, nor not to impede supervision in compliance with that law.
The supervisory authority may prescribe additional conditions to be met by a broker-dealer company and a market operator that hold a licence in compliance with the law governing capital market for the purpose of obtaining the licence for provision of digital assets services.
Change of Business Name and Seat
Article 70
Prior to submitting an application for entry of a change of business name and seat in the register of business entities, a digital assets service provider shall notify the supervisory authority of the change it is making.
Status Changes
Article 71
Prior to submitting an application for entry of a status change in the register of business entities, a digital assets service provider participating in the status change shall obtain the consent from the supervisory authority for such status change.
The digital assets service provider which, following a completed status change, continues to exist and provide digital assets services shall provide to the supervisory authority, together with the application for granting of consent referred to in paragraph 1 of this Article:
1) The decision on status change;
2) The amendments to the general acts;
3) The documentation referred to in Article 56, paragraph 2 of this Law which is to be amended due to the status change;
4) Proof of fee paid in compliance with the supervisory authority’s fee list.
The supervisory authority may request that the provider of digital assets services referred to in paragraph 2 of this Article provides other data and documents as well.
Where as a result of a status change the assets and liabilities of the digital assets service provider are transferred to another provider of digital assets services (hereinafter referred to as: the acquiring company), paragraphs 2 and 3 of this Article shall apply to the submission of application by the acquiring company for granting the consent referred to in paragraph 1 of this Article.
Where as a result of status change a new company is incorporated or the assets and liabilities are transferred to an existing company which is not licensed to provide digital assets services in accordance with this Law, provisions of this Law relating to the granting of licence for provision of digital assets services shall apply.
The supervisory authority shall decide on the application for granting the consent referred to in paragraph 1 of this Article within 60 days from the date of receipt of a duly completed application.
If the application for granting consent referred to in paragraph 1 of this Article is incomplete, the supervisory authority shall, within 20 days from the date of receipt of such application, notify the applicant of how to complete that application, in which case the time limit referred to in paragraph 6 of this Article shall begin to run on the date on which the duly completed application is submitted in compliance with the notification referred to in this paragraph.
Register of Digital Assets Service Providers
Article 72
The supervisory authorities shall keep the registers of digital assets service providers.
In the registers referred to in paragraph 1 of this Article, data shall be entered on:
1) The digital assets service providers licensed by the supervisory authority to provide digital assets services;
2) Branch offices of digital assets service providers in foreign states, i.e. digital assets service providers providing these services directly in a foreign state based on the consent of the supervisory authority.
The registers referred to in paragraph 1 of this Article shall be kept in electronic form, and the data from these registers shall be published on the web sites of the supervisory authorities, as well as on the portal referred to in Article 9, paragraph 1 of this Law, and shall be regularly updated.
The supervisory authority shall prescribe the more detailed conditions, contents and method of keeping of the registers referred to in paragraph 1 of this Article, as well as the method of deletion of data from such registers.
Termination of Validity of the Licence to Provide Digital Assets Services
Article 73
The validity of the licence to provide digital assets services shall terminate in the following cases:
1) When the supervisory authority passes a decision on revocation of such licence;
2) When the digital assets service provider is deleted from the register of business entities due to a status change;
3) When a bankruptcy or enforced liquidation procedure is initiated against the digital assets service provider.
2. Obligations of Digital Assets Service Providers
Application of the Law Regulating Prevention of Money Laundering and Financing of Terrorism
Article 74
Provisions of regulations governing the prevention of money laundering and financing of terrorism, of regulations governing restriction of disposal of assets for the purpose of preventing terrorism and proliferation of weapons of mass destruction and the provisions of this Law regulating special obligations of digital assets service providers relating to prevention of money laundering and financing of terrorism shall apply to such providers.
Digital assets i.e. virtual assets shall be considered to be assets, proceeds or another adequate value within the meaning of the regulations governing prevention of money laundering and financing of terrorism and regulations governing restriction of disposal of assets for the purpose of preventing terrorism and proliferation of weapons of mass destruction.
Actions and Measures Taken by the Digital Assets Services Provider
Article 75
A digital assets service provider shall take actions and measures to prevent and detect money laundering and financing of terrorism prescribed by the law governing prevention of money laundering and financing of terrorism.
A digital assets service provider shall establish business relations with each user of digital assets and to determine and check the identity of users of digital assets in accordance with the law governing prevention of money laundering and financing of terrorism, except in cases laid down by that law.
Principles of Safe and Sound Business Operations of Digital Assets Service Provider
Article 76
When providing services to the users of digital assets, a digital asset service provider shall place the interests of these users before his own interests and shall act fairly, honestly and professionally, in accordance with the best interests of the users, adhering to the principles laid out in the provisions of this Law.
All information, including marketing communications, addressed by a digital assets service provider to his users or potential users must be true, clear and may not be misleading for such users, and the marketing material must be designated as such.
In order for the digital assets users to be able to understand the nature of and the risks associated with the services provided by a digital assets service provider, as well as the risks associated with investing in digital assets, the digital assets service provider shall provide adequate information to such users or potential users in the manner understandable to an average user of digital assets who is a natural person, and in particular:
1) The basic information on the status of the digital assets service provider and the services provided by him;
2) Information on digital assets and the proposed investment strategies, including adequate guidance on and warnings of the risk of investing in such digital assets, i.e. associated with these strategies;
3) Information on the risks of effectuating digital assets transactions, including the risk of partial or total loss of monetary means, i.e. other property, as well as on the matter that regulations governing deposit insurance or investor protection, or the regulations governing protection of users of financial services do not apply to the digital assets transactions;
4) Information on the places of execution of orders;
5) Information on costs and charges.
The information referred to in paragraph 3 of this Article can be provided in a standardized form.
When providing portfolio management services, a digital assets service provider shall collect the necessary information regarding the knowledge and experience of the digital assets user or potential digital assets user in the investment field, the financial situation and investment objectives of the user of significance for a specific type of digital asset or service, in order that the digital assets service provider is able to recommend to the user or potential user the digital asset service i.e. digital asset that is suitable for him.
Procedures and Mechanisms for Protection of Digital Assets Users’ Rights
Article 77
When holding a digital asset of a user, the digital assets service provider shall set up adequate procedures and mechanisms for protection of user’s rights in order to prevent the use of the user’s digital assets on behalf of the digital assets service provider, other than subject to such user’s explicit consent.
A digital asset service provider may not:
1) Pledge or dispose of user’s digital assets without such user’s prior written authorization;
2) Execute user’s orders in a manner that is not in compliance with this Law or acts of the supervisory authority, i.e. acts of the platform operator;
3) Buy, sell or borrow for his own account the same digital asset that is the subject of the user’s order, prior to acting upon the user’s order;
4) Charge fees or other charges from the digital assets that he holds in custody and administers;
5) Encourage users to make frequent transactions for the sole purpose of charging fees.
Protection of Monetary Means of Digital Assets Users
Article 78
A digital assets service provider that is holding monetary means, i.e. digital assets of a user shall comply with the following requirements in order to protect the rights of his users:
1) Keeping of records and accounts in a manner that enables it at any time and without delay to distinguish the assets held for one user from the assets held for another user, as well as from his own assets, and to provide accurate data on such assets;
2) Precise and accurate maintenance of records, accounts and own correspondence relating to the users’ digital assets and monetary means in the accounts that he manages in compliance with Article 80 of this Law;
3) Regular reconciling of his own internal accounts with the records and users’ accounts that he manages in compliance with Article 80 of this Law;
4) Setting up of adequate measures in order to reduce the risk of loss or diminution of the users’ assets i.e. of the rights in connection with those assets, which may arise as a consequence of misuse of these assets, fraud, poor management, inadequate record-keeping or negligence.
The digital assets service provider shall protect the monetary means received from the digital assets user or his provider of payment services in connection with the execution of a digital assets transaction, in accordance with the provisions of this Article.
The digital assets service provider shall keep the monetary means referred to in paragraph 2 of this Article in an account with a bank separately from his own means, in accordance with Article 80 of this Law.
The digital assets held in custody and administered by the digital assets service provider for the account of the user, including the means in the procedure of transfer, is neither owned by the digital assets service provider, nor is the part of its property, and may not be used for payment of such company’s liabilities to creditors or be the subject of enforced collection or enforcement against that digital assets service provider, and shall not be included in the bankruptcy or liquidation estate of such service provider.
The supervisory authority shall prescribe in more detail the contents and the form of the records that are to be maintained by a digital assets service provider that is holding the monetary means, i.e. digital assets of the users in compliance with this Law.
Transfer of Monetary Means for the Purpose of Executing Digital Assets Transactions
Article 79
The digital assets service provider referred to in Article 3, paragraph 1, items 2), 3) and 7) of this Law may receive the monetary means of the digital assets users solely for the purpose of executing transactions involving digital assets.
The digital assets service provider referred to in Article 3, paragraph 1, items 2), 3) and 7) of this Law shall transfer the monetary means referred to in paragraph 1 of this Article to the recipient of these means no later than on the business day following the day of receipt of these monetary means.
By way of exception to paragraph 2 of this Article, in the case of a transfer of monetary means in accordance with the regulations governing foreign exchange operations, the digital assets service provider referred to in Article 3, paragraph 1, items 2) and 3) of this Law shall initiate the transfer of such monetary means to the recipient of those means within the time limit referred to in paragraph 2 of this Article, where it is not possible to execute such transfer within that time limit despite the reasonable measures it has taken.
If it fails to transfer the monetary means referred to in paragraph 1 of this Article to the recipient of these means within the time limit referred to in paragraph 2 of this Article, i.e. if it fails to act within that time limit in compliance with paragraph 3 of this Article, the digital assets service provider referred to in Article 3, paragraph 1, items 2), 3) and 7) of this Law shall return such monetary means to the sender of these means.
By way of exception to paragraph 2 of this Article, subject to explicit consent of the digital assets user, the digital assets service provider referred to in Article 3, paragraph 1, items 2), 3) and 7) of this Law may transfer the monetary means referred to in paragraph 1 of this Article to the recipient of these means within three business days from the date of receipt of these monetary means, where it shall provide an adequate record of that consent which it shall keep in accordance with Article 84 of this Law. In that case as well, if it fails to transfer these monetary means to their recipient within the time limit referred to in this paragraph, the digital assets service provider shall return the received monetary means to the sender.
The received monetary means referred to in paragraph 1 of this Article shall neither be considered as deposit within the meaning of the law regulating banks, nor as electronic money.
Money Accounts
Article 80
A digital assets service provider holding a licence for provision of digital assets services referred to in Article 3, paragraph 1, items 1), 8) or 9) may open a money account for a user of digital assets with a bank, which shall be separate from the money account of the digital assets service provider, and no specific consent or authorisation of the user shall be required for opening of the money account.
By way of exception to paragraph 1 of this Article, the digital assets service provider holding a licence for provision of digital assets services referred to in Article 3, paragraph 1, item 4) of this Law may, for the sole purpose of receiving payments related to digital assets and transferring these means to the user of digital assets, open a money account of the user of digital assets with a bank, which shall be separate from the money account of the digital assets service provider, and no specific consent or authorisation of the user shall be required for opening of the money account.
The digital assets service provider referred to in paragraph 1 of this Article may use one or more accounts for monetary means of the user of digital assets and shall continuously keep accurate records of the means of each user which are kept on the pool account.
The means in the money account of the user of digital assets may be used by the digital assets service provider referred to in paragraph 1 of this Article only for payments for liabilities relating to the services which he is licensed to provide by the supervisory authority.
The means in the money account of the user of digital assets, including the money in the procedure of transit, are not owned by and do not belong to the property of the digital assets service provider referred to in paragraph 1 of this Article, may not be used for the payment of such company’s liabilities to the creditors or be the subject of enforced collection or enforcement executed against that digital assets service provider, and are not included in the bankruptcy or liquidation estate of that service provider.
Execution of User’s Orders
Article 81
The digital assets service provider shall set up measures and systems for prompt, honest and efficient execution of the orders of a digital asset user in relation to the orders of other users of digital assets or that digital assets service provider.
The measures and systems referred to in paragraph 1 of this Article must enable execution of users’ orders in accordance with the time of receipt of the orders by the digital assets service provider.
The digital assets service provider shall maintain the book of orders in electronic form in which the users’ orders for the purchase or sale of digital assets, as well as the cancellations of these orders shall be recorded, in such a manner that the time of receipt of the orders is noted and that prevents any subsequent alteration of the order that has not been authorised by the user or of the time of receipt of the order.
The digital assets service provider may receive the orders of the users of digital assets in its business premises or by any means of telecommunication or other electronic means, if that is envisaged in the contract with that user, and in that case, the digital assets service provider shall employ adequate safeguard mechanisms, such as recording devices, to ensure the accuracy and integrity of the orders in the records.
The digital assets service provider shall refuse the execution of an order if it has grounds to reasonably suspect that the execution of such order would be in contravention of the provisions of this Law or the law governing prevention of money laundering and financing of terrorism, or that it would result in committing an act punishable by law as a criminal offence, economic offence or a misdemeanour.
In the case referred to in paragraph 5 of this Article, the digital assets service provider shall without delay notify the supervisory authority.
Contract with Digital Assets User
Article 82
The digital assets service provider shall conclude a contract with the user of digital assets setting out the rights and obligations of the contracting parties, as well as other conditions on which the digital assets service provider provides services, where the rights and obligations of the contracting parties may also be regulated by reference to the general terms of business of that service provider and legal and other documents which are easily available to the user.
The contract referred to in paragraph 1 of this Article shall mandatorily include the statement of the user that he is informed of the business rules of the digital assets service provider.
The digital assets service provider shall enable its users to inspect the amendments to its general acts no later than seven days prior to the beginning of application of these amendments.
The contract referred to in paragraph 1 shall be concluded in writing, including conclusion of contract on a durable data medium by using the means of distance communication (internet, electronic mail, etc.).
Handling of Complaints
Article 83
The digital assets service provider shall set up appropriate procedures for adequate resolution of complaints of the users of digital assets, based on which the users can submit their complaints in a simple manner and without additional costs. Information on the complaint submission procedure shall be published on the web site of the digital assets service provider.
The digital assets service provider shall respond to users’ complaints within a reasonable time limit which may not exceed 15 days from the date of receipt of the complaint.
The digital assets service provider shall keep the documentation on all the complaints and measures taken in response to them, in compliance with Article 84 of this Law.
The supervisory authority may regulate handling of users’ complaints by the digital assets service providers in more detail.
Obligation to Keep Records and Reporting by the Digital Assets Service Provider
Article 84
The digital assets service provider shall maintain in electronic form and to keep for ten years at the minimum data relating to all the digital assets transactions that it has executed, whether for own account or on behalf of and for the account of the user of digital assets, and where the transactions are executed behalf of and for the account of the user, these records shall include all the data relating to the identity of that user, as well as the data prescribed by the law regulating prevention of money laundering and financing of terrorism.
The digital assets service provider shall enable the supervisory authority to inspect the data referred to in paragraph 1 of this Article.
Data on Business Entities Holding Virtual Currencies
Article 85
The providers of virtual currency services shall provide to the National Bank of Serbia the following data on legal persons and sole traders that are users of virtual currencies:
1) The business name or the short business name of the user of virtual currencies;
2) The address of the seat of the user of virtual currencies, and for a user which is a foreign legal person - the name of the state as well;
3) The registration number of the user of virtual currencies i.e. other equivalent identifier for a user of virtual currencies which is a foreign legal person (e.g. the records number determined by the competent state authority);
4) The tax identification number of the user of virtual currencies;
5) The date of establishing and terminating of the business relationship with the user of virtual currencies, as well as the date of another change connected to that business relationship;
6) The type of virtual currency service that is the subject matter of the business relationship referred to in item 5) of this paragraph;
7) The address of the virtual currencies that is used i.e. has been used by the user of virtual currencies to execute the virtual currency transaction, and if he uses several addresses, all the addresses of the virtual currencies;
8) Other data prescribed by the National Bank of Serbia.
The providers of virtual currency services shall be liable for the accuracy and completeness of data referred to in paragraph 1 of this Article.
The holders of virtual currencies - the legal persons and sole traders with the seat in the Republic that have not used the virtual currency services of the provider of virtual currency services shall submit to the National Bank of Serbia the reports comprising data referred to in paragraph 1, items 1) through 4), 7) and 8) of this Article and shall be liable for the accuracy and completeness of these data.
The National Bank of Serbia shall maintain the records of data on the holders of virtual currencies referred to in paragraphs 1 and 3 of this Article in electronic form.
The National Bank of Serbia shall be responsible for identicalness of data referred to in paragraphs 1 and 3 of this Article to the data in the records referred to in paragraph 4 of this Article.
The data in the records referred to in paragraph 4 of this Article shall not be publicly available and they shall be subject to application of the provisions of Article 87 of this Law.
The National Bank of Serbia shall prescribe in more detail the conditions and the method of keeping of the records referred to in paragraph 4 of this Article, the method and the time limits for provision of data to be kept in these records, as well as the method of inspection of these data.
Duties and Responsibility of Digital Assets Service Provider, Management Members, Manager and Employees
Article 86
The digital assets service providers, the management members, managers, procurators and the persons employed with or hired on any other grounds by the digital assets service provider shall:
1) Act conscientiously and honestly while performing their activity, i.e. jobs, within their duties, in line with the rules of the profession;
2) Act in the best interest of the digital assets users, i.e. participants in trading, as well as to protect the integrity of the digital assets market;
3) Set up processes and efficiently use the resources required for regular performance of activity;
4) Take all the reasonable measures in order to avoid conflicts of interest, and where such conflicts cannot be avoided, make sure that the digital assets users, i.e. participants in trading are treated fairly;
5) Comply with the provisions of this Law and the regulations passed on the basis of this Law, so as to work in the interest of digital asset users i.e. participants in trading, as well as of the integrity of the digital assets market.
Business Secret
Article 87
A business secret shall be considered to be data obtained by a digital assets service provider in the course of its operation relating to the user of such services, including his personal data, as well as data on the digital assets transaction, other than those which have been made publicly available.
The digital assets service provider, members of its bodies and the persons employed or hired by him, as well as other persons which due to the nature of their work have access to the data referred to in paragraph 1 of this Article (hereinafter: person under confidentiality obligation) may not disclose or communicate such data to third parties, or provide them with access to such information.
The obligation of business secrecy referred to in paragraph 1 of this Article shall continue for the persons under such confidentiality obligation even upon the termination of the status based on which they have obtained access to data that are subject to this secret.
By way of exception to paragraph 2 of this Article, the person under the obligation of business secrecy may communicate or provide to the third persons the data referred to in paragraph 1 of this Article, i.e. provide access to such information:
1) Subject to a prior written consent provided by the person to whom these data relate to;
2) Where requested so by the supervisory authority or another regulatory body in the Republic for the needs of supervision or conducting activities referred to in this or another law;
3) Based on a decision or request of a court of relevant jurisdiction;
4) For the needs of the Ministry in charge of domestic affairs, the authority competent for combating organised crime and the authority competent for prevention of money laundering, in compliance with regulations;
5) Tor the needs of the tax administration;
6) In connection with a property proceeding, based on the request of the guardian of property or consular missions of the foreign states, upon submission of written documents evidencing the legitimate interest of those persons;
7) Upon request of a foreign regulatory body, in accordance with the law;
8) In connection with the enforcement procedure or placing of collateral on the assets of the user of digital assets, based on the request of a court, bailiff or another competent authority in that procedure;
9) Where prescribed so in other cases by this or another law.
The digital assets service provider shall have the right to communicate, i.e. provide the data referred to in paragraph 1 of this Article to an examining magistrate, public prosecutor and courts, i.e. other authorities with public powers - solely for the purpose of protecting his rights, in accordance with the law.
The persons to which the data referred to in paragraph 1 of this Article have been made available in compliance with paragraphs 4 and 5 of this Article may use such data solely for the purpose for which they have been obtained and may not communicate them further or provide them to any third person or provide these persons with access to such data, except in the cases laid down by the law.
Provisions of paragraph 6 of this Article shall also apply to the persons which are employed or hired, i.e. which have been employed or hired by the persons to which the data referred to in paragraph 1 of this Article have been made available in compliance with paragraphs 4 and 5 of this Article, as well as to other persons to whom such data have been made available due to the nature of their jobs.
Protection of Personal Data
Article 88
When collecting and processing personal data referred to in Article 87, paragraph 1 of this Law, the providers of digital assets services shall act in accordance with the law regulating protection of personal data.
Business Ledgers and Financial Statements
Article 89
The digital assets service provider shall perform the keeping of ledgers, recognition and valuation of property and liabilities, revenues and expenses, compilation, presentation, submission and disclosure of information from the financial statements, as well as internal audit, in accordance with the laws regulating accounting and audit, unless where prescribed otherwise by this Law.
The digital assets service provider providing virtual currency services shall record the business transactions concerning virtual currency services separately from the services in connection with other digital assets and from all the other activities that he performs.
Audit of Financial Statements
Article 90
The digital assets service provider shall provide the audit of its financial statements audited, if obliged to do so in accordance with the law governing audit.
By way of exception to paragraph 1 of this Article, where the total value of the digital assets transactions exceeds RSD 220,000,000 annually, the digital assets service provider shall provide the audit of its financial statements.
The external auditor performing the audit of financial statements of a digital assets service provider referred to in paragraphs 1 and 2 of this Article shall notify the supervisory authority without delay of:
1) Any fact that could constitute an infringement of the law or regulation that has been or is being committed by the digital assets service provider;
2) A change of material significance in the financial result disclosed in unaudited annual financial statements of a digital assets service provider;
3) Any circumstance which could result in a significant material loss for the digital assets service provider or could jeopardise the continuity of its business operations;
4) The qualifications contained in the external auditor’s opinion on the financial statements of a digital assets service provider.
The external auditor shall also notify the supervisory authority of the facts and circumstances referred to in paragraph 3 of this Article if he becomes aware of them while auditing the financial statements of a legal person closely related to a digital assets service provider.
The notification referred to in paragraphs 3 and 4 of this Article shall not be considered to be a breach of data secrecy and the external auditor may not be held liable for that.
Submission of Financial Statements to the Supervisory Authority
Article 91
The digital assets service provider shall submit individual financial statements for the previous year, together with the external auditor’s report if it is due to have its financial statements audited in accordance with Article 90 of this Law - to the supervisory authority, within 30 days from the date of submission of the financial statements in accordance with the law governing accounting at the latest.
If it is obliged to compile consolidated financial statements, the digital assets service provider shall also submit the consolidated financial statements for the previous business year, together with the external auditor’s report, to the supervisory authority, within 30 days from the date of submission of the consolidated financial statements in accordance with the law governing accounting at the latest.
Management System and Internal Controls’ System
Article 92
The digital assets service provider shall set up, maintain and improve reliable, efficient and comprehensive systems of management and internal controls that shall ensure responsible and reliable governance over that provider of digital assets services.
The system of management and the system of internal controls referred to in paragraph 1 of this Article shall in particular cover:
1) The organisational structure with precisely and clearly determined, transparent and consistent divisions and separations of tasks, inclusive of the duties and responsibilities relating to the provision of digital assets services;
2) The effective and efficient procedures for identification, measuring and monitoring of the risks to which the digital assets service provider is exposed or could be exposed, in particular of the risk of money laundering and financing of terrorism, as well as for managing these risks, i.e. reporting on these risks;
3) Adequate accounting procedures and procedures for assessing compliance with regulations governing prevention of money laundering and financing of terrorism, as well as other procedures.
The supervisory authority may prescribe in more detail the method and the conditions for setting up, maintaining and improving of the systems referred to in paragraph 1 of this Article.
Outsourcing of Operational Tasks of the Digital Assets Service Provider to a Third Party
Article 93
A provider of digital assets services may outsource performance of individual operational tasks related to provision of digital assets services to a third party.
The digital assets service provider intending to outsource the performance of individual operational tasks related to provision of digital assets services to a third party shall previously notify the supervisory authority thereof, no later than 30 days prior to the intended outsourcing.
The digital assets service provider shall be held liable for lawful business operation of the person to which he has outsourced individual operational tasks.
The tasks of the digital assets service provider may not be outsourced to a third party if such outsourcing would impair the quality of the internal controls of that provider or would significantly jeopardise the lawfulness of operations of that provider, its financial position or stability.
The digital assets service provider shall enable, within his capability, supervision by the supervisory authority of the person to which he has outsourced the performance of individual operational tasks, as well as to enable it to inspect the ledgers and other documentation and data created in relation to performance of these tasks, which are at the disposal of that person.
Provision of Digital Assets Services in a Foreign State
Article 94
The digital assets service provider may provide digital assets services in a foreign state either through a branch office or directly, in accordance with the regulations of that state and the provisions of this Article.
For the purpose of establishing a branch office in a foreign country or direct provision of digital assets services in a foreign state, the digital assets service provider shall submit an application to the supervisory authority for granting consent thereto.
Enclosed with the application referred to in paragraph 2 of this Article, the digital assets service provider shall also submit the following data and documentation:
1) Name and address of the branch office, if it establishes a branch office in a foreign state;
2) A description of the organisational structure of the branch office, if it establishes a branch office in a foreign state;
3) The business plan of the branch office, i.e. the plan of direct provision of digital assets services in a foreign state for the first three business years with the description of the digital assets services that it intends to provide in the foreign state, inclusive of the number and type of expected users of digital assets, as well as the anticipated volume and amount of digital assets transactions, for each type of digital assets services which it intends to provide in the foreign state;
4) Data on the persons that will manage the operations of the branch office i.e. the direct provision of digital assets services in the foreign state, inclusive of data and proofs of the good business reputation of these persons in compliance with Article 60 of this Law;
5) Proof that the regulations of the foreign country in which it establishes a branch office, i.e. directly provides the digital assets services, are harmonised with international standards in the field of prevention of money laundering and financing of terrorism, in particular in the part relating to digital assets and the obligations of digital assets service providers;
6) Proof that there are no obstacles for the supervisory authority to conduct supervision of the operations of the branch office in the foreign state in which the branch office is to be established, i.e. of the direct provision of digital assets services in the given foreign state.
The supervisory authority shall decide on the application referred to in paragraph 2 of this Article within 60 days from the date of receipt of a duly completed application.
If the application referred to in paragraph 2 of this Article is not duly completed, within 10 days from receiving such application the supervisory authority shall notify the digital asset service provider of how to complete such application, in which case the time limit referred to in paragraph 4 of this Article shall run from the date of submission of the duly completed application in accordance with the notification referred to in this paragraph.
The supervisory authority shall prescribe in more detail the conditions and the method of granting and revoking of the consent referred to in paragraph 2 of this Article.
Operations in Compliance with the Prescribed Requirements
Article 95
The digital assets service provider shall operate at all times in compliance with the organisational, personnel, technical and other requirements laid down by this Law and other regulations.
Provision of Services related to Financial Leverage
Article 96
The digital assets service provider holding the licence for provision of the digital assets services referred to in Article 3, paragraph 1, items 1), 8) or 9) of this Law may lend monetary means or digital assets to its users solely for the purpose of financial leverage for trading in digital assets, in accordance with a contract with such user.
The digital assets service provider may lend the monetary means and the digital assets referred to in paragraph 1 of this Article using his assets only, and not the assets of the users.
The supervisory authority may prescribe the conditions and restrictions relating to provision of services related to financial leverage.
The financial leverage shall mean any method by which a user of digital assets may increase exposure to digital assets intended for trading, either through borrowing of monetary means or digital assets, or by taking positions in financial assets or derivatives with inherent financial leverage, or in some other manner from a digital asset service provider.
The digital assets service provider holding the licence for provision of the digital assets services referred to in Article 3, paragraph 1, item 1) of this Law that is intending to lend monetary means and digital assets referred to in paragraph 1 of this Article to its users, shall previously increase its minimum capital up to the amount referred to in Article 54, paragraph 1, item 2) of this Law and provide proof thereof to the supervisory authority, as well as to maintain such capital amount in accordance with Article 54 of this Law.
Acceptance/Transfer of Digital Assets
Article 97
Acceptance of digital assets in exchange for the goods sold and/or services provided in retail trade can only be done through a provider of digital assets services that is holding a licence for provision of digital assets service referred to in Article 3, paragraph 1, item 7) of this Law.
The provider of the digital assets service referred to in paragraph 1 of this Article shall accept from the consumer an adequate value of the digital assets, which shall correspond to the price of goods sold and/or services provided to such consumer, exchange it for the adequate amount of the legal tender and transfer that amount to the relevant account of the trader.
Acceptance and/or transfer of digital assets directly from the consumer to the trader shall be forbidden.
VI PLEDGE AND FIDUCIARY RIGHTS ON DIGITAL ASSETS
Article 98
Based on a digital assets pledge agreement, the pledgor shall commit to the creditor (hereinafter referred to as: the pledgee) to provide him a security interest for his claim against the pledgor or a third party by establishing the creditor’s right of pledge on digital assets of the pledgor in compliance with this Law.
The digital assets pledge agreement shall in particular contain:
1) The date of conclusion of that agreement;
2) Data on the creditor, pledgor and debtor, where the debtor and the pledgor are not the same person, and specifically:
(1) Name and surname, i.e. business name or company name of these persons,
(2) The address of domicile, i.e. seat of these persons,
(3) The company registration number and the tax identification number, where existing, of these persons;
3) The type and quantity of digital assets subjected to a pledge right;
4) Data on the claim that is to be collateralized;
5) The method of establishing of the pledge.
The digital assets pledge agreement can be a separate agreement or an integral part of the framework or another agreement between the creditor and the debtor.
The pledge agreement, within the meaning of this Article, can also be executed by using a smart contract.
The digital assets pledge agreement shall be concluded in paper or electronic form, i.e. on a durable medium which enables the storage and reproduction of genuine data in an unaltered form.
The supervisory authority may prescribe additional elements that a digital assets pledge agreement must include, as well as the special rules regulating performance of a digital assets pledge agreement by using a smart contract.
Acquiring of a Right of Pledge
Article 99
A right of pledge shall be acquired by means of entering into the pledge register maintained by the digital assets service provider licensed by the supervisory authority to maintain the register of pledges on digital assets, as well as to keep and administer digital assets for the benefit of the user and to provide the related services.
The condition for registration of a right of pledge on digital assets in the pledge register shall be that the digital asset which is subjected to a right of pledge has previously been entrusted for custody and administration to the digital assets service provider licensed to keep a register of pledges on digital assets.
The digital assets service provider which maintains the register of pledges on digital assets in which the right of pledge is to be registered shall simultaneously with the registration of the right of pledge prevent any further disposal of the pledged digital asset, and in addition ensure that disposal of the pledged digital asset shall be impossible until the settlement of the secured claim i.e. deletion of the right of pledge.
By way of exception to paragraph 3 of this Article, the digital assets pledge agreement may lay down that the disposal of the pledged digital asset will be allowed. In such a case, the pledged digital asset shall be kept by the digital assets service provider which maintains the pledge register in which the right of pledge on such digital asset is registered, namely until the settlement of the collateralized claim, i.e. deletion of right of pledge on such digital asset, in compliance with the pledge agreement on the digital asset in question.
If the pledgor has pledged the digital asset on which he does not have ownership right or if the pledge is not valid due to some other reasons, registration in the pledge register shall not have legal effect.
Registration of the right of pledge in the pledge register may be requested by the creditor or the pledgor.
Where the registration is requested by the creditor, explicit statement by the pledgor confirming his consent to registration of the right of pledge in the pledge register by the creditor shall be required.
Legal Effect of Right of Pledge
Article 100
The creditor whose right of pledge has been registered in the pledge register can make collection from the value of the subject matter of the pledge before other creditors, if his claim is not settled in its entirety.
Article 101
A monetary claim in domestic or foreign currency may be secured by a right of pledge in compliance with law, as well as a non-financial claim expressed in digital assets.
A specified amount of the principal claim, the accrued interest and the costs associated with the collection of the claim are to be secured by a right of pledge.
In addition, future claims, as well as the conditional ones may be secured by a right of pledge.
Article 102
In case of a bankruptcy procedure over the pledgor’s assets, the rules of the law regulating bankruptcy shall apply to settlement from the value of the subject matter of the right of pledge, except where prescribed otherwise by this Law.
Article 103
The pledgee, within the meaning of the law regulating bankruptcy, shall be a secured creditor that has acquired the right of pledge in accordance with this Law.
Indicating the Authorized Person
Article 104
By means of a digital assets pledge agreement or by a separate power of attorney, the pledgee or a number of them may authorise a third party to take legal actions for the purpose of protection and settlement of the secured claim (hereinafter referred to as: the authorized person).
In relation to the pledger, the authorized person shall have the rights of a pledgee.
The authorized person must have a special power of attorney for any waiver of the right of pledge.
In the course of registration of the right of pledge in the pledge register, data on the authorized person shall be entered instead of the data on the pledgee.
Where there are a number of pledgees, they may, in the manner referred to in paragraph 1 of this Article, designate one of them to perform the tasks of the authorized person.
Article 105
A pledgor, within the meaning of this Law, shall be a person holding the ownership right on digital assets or the capacity of a holder of digital assets of which he may freely dispose.
The pledgor may be the debtor or a third person.
The Right to Use the Pledged Digital Assets
Article 106
The pledgor shall have the right to use the pledged digital asset in compliance with its regular intended purpose, as well as to, if the digital asset that is the subject matter of the right of pledge yields fruits, collect such fruits.
It can be determined in the digital assets pledge agreement that the pledgee shall have the rights referred to in paragraph 1 of this Article.
The right to use the pledged digital assets can be widened or limited by means of the digital assets pledge agreement.
Article 107
The pledger may pledge the digital asset on which a right of pledge has already been established, unless where determined otherwise by the digital assets pledge agreement.
Special Contractual Provisions on Settlement of Claims
Article 108
The digital assets pledge agreement may lay down that, upon maturity of the claim, the pledgee has the right to keep the digital assets for himself at the market price, providing that the pledged digital asset has a market price
The pledgee and the pledger may agree that the pledgee will be allowed to keep the subject matter of the security interest for himself at a certain price, upon maturity of the claim.
Article 109
The pledgee shall be entitled to settle his claim from the price achieved through the sale of the subject matter of the right of pledge before the other creditors of the pledgor, unless where determined otherwise by this Law.
If the same subject matter of the right of pledge, in compliance with this Law, is pledged to a larger number of creditors, the order of settling of their claims from the value of such object shall be determined according to the time (day, hour and minute) of receipt of the application for registration of the right of pledge in the pledge register.
Determining of the order of priority for securing the claims based on public revenues or other claims of the Republic, Autonomous Province and local self-government unit shall be performed in the manner envisaged in paragraph 2 of this Article.
Article 110
Upon maturity, the pledgee shall acquire the right to settle his principal claim, interest and the costs related to the collection of the claim from the value of the subject matter of the right of pledge.
The pledgee shall pay any surplus value exceeding the amount of the claim obtained after the settlement from the subject matter of the right of pledge to the pledgor on the following business day, otherwise he shall pay to the pledgor the prescribed default interest for the period from the date of settlement to the date of payment of the surplus value.
Article 111
The pledgor shall cooperate with the pledgee in the procedure of settlement of pledgee’s claim from the subject matter of the right of pledge.
The pledgor shall provide notifications to the pledgee in order to perform the settlement.
The obligations of the pledgor referred to in paragraphs 1 and 2 of this Article shall also be the obligations of the debtor, where they are not the same person.
If he breaches any of the obligations referred to in this Article, the pledgor, i.e. the debtor, where they are not the same person, shall compensate the damage suffered by the pledgee.
Article 112
The pledgor shall suffer the settlement of the pledgee’s claims from the value of the subject matter of the right of pledge.
Until the settlement is completed, the pledgor shall refrain from any actions which could reduce the value of the subject matter of the right of pledge.
In addition, the pledgor shall take other actions that are necessary for the pledgee to settle his claim.
If he breaches any of the obligations referred to in this Article, the pledgor shall compensate the damage suffered by the pledgee.
Out-of-court Sale of the Subject Matter of the Right of Pledge
Article 113
The pledgee may initiate out-of-court sale of the subject matter of the right of pledge upon maturity of the secured claim.
The pledgee shall be authorized, based on the certificate from the digital assets pledge register, to conclude a contract on sale of the digital assets on behalf and for the account of the pledgor in the settlement procedure.
The debtor may validly settle the debt at any given moment prior to the sale of the pledged digital assets.
Within the time limit referred to in paragraph 3 of this Article, the pledgor may, although not obligated to, fulfil the obligation of the debtor.
The out-of-court sale of the subject matter of the right of pledge, within the meaning of this Law, shall include the public auction sale.
Acquiring of Ownership Right in an Out-of-court Public Sale and in other Types of Sale
Article 114
A bona fide purchaser of an object of the right of pledge at an out-of-court public sale shall acquire the right of ownership of that object without any encumbrance.
The right of ownership acquired by a bona fide purchaser may not be contested due to any omissions in the sale procedure.
Provisions of paragraphs 1 and 2 of this Article shall also apply to other types of out-of-court sales in settlement procedure, if a person has bought the subject matter of the right of pledge at a market price or at a price at which a reasonable and prudent person would sell it, safeguarding the interests of the debtor and the pledgor.
Settlement from the Subject Matter of the Right of Pledge after Period of Limitations
Article 115
A pledgee may be settled from the value of the pledged digital asset even after his claim has become time-barred.
Cessation of the Right of Pledge
Article 116
If a pledgee’s claim ceases through the payment of debt or otherwise, the right of pledge shall cease and shall be deleted from the digital assets pledge register at the request of the pledgee, debtor or pledgor, where they are not the same person.
The right of pledge shall cease and shall be deleted from the digital assets pledge register if the digital asset ceases to exist.
The right of pledge shall cease based on public auction and other sale of the pledged digital asset, executed for the purpose of settlement of the pledgee’s claim.
Deletion of the right of pledge the digital assets pledge register may also be requested when the pledgee waives the right of pledge in writing, when the capacity of a pledgee and that of a debtor merge into one person, as well as when the pledgee acquires the property right of ownership on the pledged digital asset.
If the debtor or the pledgor, where they are not the same person, requests deletion of the right of pledge, he shall submit to the digital assets pledge register a written statement of the pledgee that he consents to the deletion, a court decision or another relevant document to the effect that the right of pledge has ceased.
Digital Assets Pledge Register
Article 117
The digital assets pledge register shall be a register maintained by a digital assets service provider that is licensed for that by the supervisory authority, and in which the pledge rights on digital assets are entered in accordance with this Law.
The supervisory authority shall publish on its web site the list of all the digital assets service providers which maintain the digital assets pledge register referred to in paragraph 1 of this Article.
The digital assets pledge register shall be available to all the persons irrespective of the place and territory from which they are accessing that register. All persons may contact any digital assets service provider which maintains a digital assets pledge register for the purpose of searching.
Data from the digital assets pledge register shall be public and available free of any charges on the web site of the digital assets service provider which maintains the digital assets pledge register.
The digital assets pledge register must be kept up-to-date.
Entry of data in the digital assets pledge register shall not be a proof of existence of ownership or other rights of the pledgor with respect to the pledged digital asset, or of validity of the secured claim or pledge.
Several digital assets service providers which maintain a digital assets pledge register may conclude an agreement on establishing of a joint digital assets pledge register.
Article 118
A digital assets pledge register shall comprise:
1) Data on the pledgor and the debtor, where they are not the same person, as well as data on the pledgee or authorized person;
2) Data identifying in more detail the digital asset that is the subject matter of the right of pledge;
3) Data on the amount of the secured claim, i.e. data on the maximum amount of future or conditional claims;
4) Data on the existence of a dispute relating to the right of pledge or the subject matter of the pledge.
If a party to the right of pledge is a domestic natural person, the data referred to in paragraph 1, item 1) of this Article shall pertain to the name, surname, unique citizen’s identification number and the place of domicile of that person, and if a party to the right of pledge is a foreign natural person, the data referred to in paragraph 1, item 1) of this Article shall pertain to the name, surname, passport number and passport country of issue.
If a party to the right of pledge is a domestic legal person, the data referred to in paragraph 1, item 1) of this Article shall pertain to the business name and registration number, and if a party to the right of pledge is a foreign legal person, the data referred to in paragraph 1, item 1) of this Article shall pertain to the business name, the designation of that legal person in the foreign register of business entities, the name of that register and the name of the state in which its seat is located.
Any changes to the data referred to in paragraph 1 of this Article shall also be entered in the digital assets pledge register.
Amendments and supplements relating to the material elements of an entered right of pledge shall have the character of a new entry.
The digital assets service provider which maintains the digital assets pledge register shall keep records on time (day, hour and minute) of receipt of applications for entry of the right of pledge in the pledge register.
Article 119
Notes of disputes instituted by a lawsuit to delete the right of pledge or of other disputes relating to the right of pledge shall be entered in the pledge register.
A final court decision or a settlement whereby the dispute in question has been resolved shall be enclosed in order that a note of dispute be deleted.
The supervisory authority may also prescribe other cases in which a note of a dispute shall be deleted.
Storing of Documents from the Digital Assets Pledge Register
Article 120
A digital assets service provider shall store the documents based on which data were entered in the digital assets pledge register, i.e. based on which a right of pledge has been deleted, for a period of five years from the cessation date of the right of pledge.
The documentation referred to in paragraph 1 of this Article in paper form shall be transferred to electronic form and stored in compliance with the regulations governing storing of electronic documents.
Article 121
A fiduciary agreement on digital assets shall obligate a fiduciary debtor (hereinafter referred to as: fiduciary debtor) to a fiduciary creditor (hereinafter referred to as: fiduciary) to transfer the ownership of digital assets to him, for the purpose of securing a claim, and the fiduciary shall be obliged to, in accordance with such agreement, return the received or equivalent means of collateral to the fiduciary debtor upon satisfaction of the secured claim, i.e. concurrently with that satisfaction.
Unless where agreed otherwise, the fiduciary shall have the right to use the digital assets which are the subject matter of the fiduciary agreement referred to in paragraph 1 of this Article and to dispose of them, including the right to sell them.
A fiduciary debtor may also be a third party providing collateral for someone else’s debt.
A fiduciary agreement on digital assets can be concluded for purposes other than to secure the claim in accordance with paragraph 1 of this Article, in which case, the other purpose must be defined in the fiduciary agreement on digital assets.
The supervisory authority shall regulate in more detail the fiducia on digital assets and prescribe more detailed conditions and mandatory contents of the fiduciary agreement on digital assets.
Where prescribed by the operating rules of a digital assets service provider, and if laid down in the fiduciary agreement on digital assets, provisions of this Law relating to the right of pledge on digital assets can be applied mutatis mutandis to fiducia on digital assets.
Position of a Fiduciary Debtor in Bankruptcy
Article 122
Where a fiduciary agreement is concluded for the purpose of securing a claim in accordance with Article 121, paragraph 1 of this Law, the fiduciary debtor shall, within the meaning of the law regulating bankruptcy procedure, have the status of a creditor with the right to separate settlement.
Where a fiduciary agreement is concluded for any purpose other than to secure a claim, in accordance with Article 121, paragraph 4 of this Law, the fiduciary debtor shall, within the meaning of the law regulating bankruptcy procedure, have the status of a creditor with the right to exempt assets from the insolvency estate.
Article 123
The supervisory authority shall supervise the operation of digital assets service providers, digital asset issuers, as well as persons who are or used to be holders of digital assets, in accordance with its competences laid down by this Law and other laws.
The supervisory authority shall supervise every segment of the operation of digital asset issuers and holders of digital assets referred to in paragraph 1 of this Article having indirect and/or direct connections with digital assets, as well as every segment of the operation of digital assets service providers, and may independently impose measures within the scope of its competence in accordance with this Law and other laws against such issuers, holders of digital assets i.e. digital assets service providers.
The subject matter of supervision shall be to verify the compliance of the operations of digital assets service providers, issuers and persons who are or used to be holders of digital assets (hereinafter: the supervised entity) with this Law and the regulations passed based on this Law.
The subject matter of supervision shall also be to verify compliance of operations of the digital assets service providers and issuers with the law and other regulations governing prevention of money laundering and financing of terrorism, with the law governing restriction of disposal of assets for the purpose of preventing terrorism and proliferation of weapons of mass destruction, with the regulations governing foreign exchange operations, regulations governing accounting, regulations governing information system management and with other relevant regulations.
The supervisory authority may lay down by means of a regulation the obligation of the digital assets service providers to pay a fee for conducting supervision referred to in this Article, as well as the method of calculation, payment deadlines and other matters related to this fee.
Method of Conducting Supervision
Article 124
The supervisory authority shall conduct supervision:
1) Indirectly - by collecting and analysing reports and other documentation and data which shall be submitted by the supervised entity to the supervisory authority in accordance with this Law, as well as other documentation, i.e. other data about the supervised entity’s operations that the supervisory authority has at its disposal;
2) Directly - by inspecting the business ledgers and other documentation and data of the supervised entity.
In the course of supervision, the supervisory authority may also, in the manner laid down in paragraph 1 of this Article, conduct supervision of a person to whom the supervised entity has outsourced the performance of individual operational tasks in accordance with this Law, as well as of other persons having property, management or business relations with the supervised entity.
The persons with which the supervision referred to in this Article is conducted shall enable the authorized persons of the supervisory authority the unhindered performance of supervision and to cooperate with them.
It shall be considered - upon serving of the decisions, minutes and other acts, as well as notices, requests and other papers of the supervisory authority related to the supervision to the supervised entity that they are also served on the management members and managers of the supervised entity and proving otherwise shall not be permitted.
The supervisory authority shall prescribe in more detail the conditions and the method of conducting supervision in accordance with its statutory competences, and may also prescribe the obligation of the supervised entities to provide conditions for receipt of decisions, records and other acts, notices, requests and papers of the supervisory authority, in the form of electronic documents.
Data and Documentation that are to be delivered to the Supervisory Authority
Article 125
For the purpose of conducting supervision of its operations, the supervised entity and the persons referred to in Article 124, paragraph 2 of this Law shall submit, at the request of the supervisory authority, all requested data and documentation within the time limit set out in that request.
Where data and documentation referred to in paragraph 1 of this Article are drawn up in a language other than Serbian, the supervisory authority may request that the supervised entity, i.e. the persons referred to in that paragraph, provide translations of those data and documentation into Serbian at their own cost.
The supervisory authority shall collect, process and analyse data relating to provision of digital assets services provided to it for statistical purposes and for the purpose of conducting supervision by the providers of these services.
The supervisory authority shall prescribe in more detail the contents, time limits and method of provision of data referred to in paragraph 3 of this Article.
Confidentiality of Data in Supervision
Article 126
Data which in any manner become known to the employees of the supervisory authority and authorised and other hired persons referred to in Article 128 of this Law, and which pertain to the supervision of the operations of the supervised entity, as well as the documents containing such data, including the measures referred to in Article 132, paragraph 1, items 1) through 3) of this Law - shall be designated and protected as confidential data, with the designation of the confidentiality level "CONFIDENTIAL" or "INTERNAL", in accordance with the law governing data confidentiality.
The persons referred to in paragraph 1 of this Article shall keep the data and documents referred to in that paragraph as confidential, i.e. they may not make them available to third parties, except in the cases prescribed by the law.
The obligation of confidentiality of data shall not cease for the persons referred to in paragraph 1 of this Article upon the termination of employment, i.e. engagement with the supervisory authority, or following the termination of another capacity based on which those persons have gained access to the data referred to in that paragraph.
By way of exception to paragraph 2 of this Article, the data and documents referred to in paragraph 1 of this Article may be made available by the supervisory authority to domestic and foreign supervisory authorities, on condition that these authorities use them solely for the purposes for which they have been obtained.
Publishing data referred to in paragraph 1 of this Article expressed in aggregate form, so that based on them the identity of the supervised entity i.e. of the natural or legal person cannot be determined - shall not be considered to be a breach of confidentiality obligation.
Cooperation of the Supervisory Authority with other Competent Authorities
Article 127
The supervisory authority and other competent authorities in the Republic shall cooperate and exchange data for the purpose of conducting and improving supervision, decision-making in administrative procedures and performance of other tasks laid down by this Law.
The National Bank of Serbia and the Commission shall regulate in more detail by means of an agreement the method of cooperation and exchange of data for the purpose of conducting and improving supervision, decision-making in administrative procedures and performance of other tasks laid down by this Law.
The supervisory authority shall have the right to request, at any given moment, from the competent authority that keeps the criminal conviction records the details of criminal records of the persons, their associates, as well as of the beneficial owner of that person within the meaning of the law regulating prevention of money laundering and financing of terrorism, to which the applications and notifications to be submitted to the supervisory authority in compliance with this Law pertain, i.e. whose business reputation is of significance for acting and decision-making upon those applications i.e. notifications.
The supervisory authority shall cooperate with the competent authorities of foreign countries and, for the purposes referred to in paragraph 1 of this Article, may exchange data with them relating to supervision of the supervised entities and unauthorized provision of digital assets services, in compliance with the provisions of this Law, and may also conclude an agreement with these authorities.
Article 128
The supervised entity shall enable the supervisory authority to conduct direct supervision of the business operations i.e. performance of individual tasks in its seat, branch offices, and other organisational parts.
The supervision referred to in paragraph 1 of this Article shall be performed by the employees with the supervisory authority in compliance with a special decision i.e. order passed by that authority.
The decision i.e. order referred to in paragraph 2 of this Article shall specify the supervised entity where the supervision shall take place and the subject matter of supervision.
The supervised entity shall provide to the employees of the supervisory authority referred to in paragraph 2 of this Article (hereinafter referred to as: the authorized persons) for inspection the business ledgers, documentation and data requested by these persons in written i.e. electronic form, as well as to enable them access to all resources of the information system, including the equipment, data bases and computer programs used by it.
The authorised persons shall conduct direct supervision on business days, during the regular working hours of the supervised entity, and where necessary due to the scope or nature of such supervision, the supervised entity shall enable the authorised persons to conduct such supervision even on non-working days, i.e. outside the working hours.
In the course of direct supervision, the authorized persons may:
1) Access all premises of the supervised entity;
2) Request to be provided with a separate room to perform the tasks of direct supervision;
3) Request to be provided with data, i.e. copies of the documents relating to the subject matter of the direct supervision, as well as to be enabled to access the resources of the information system;
4) Communicate directly with the management members, managers and responsible employees of the supervised entity in order to obtain the necessary explanations.
Where it processes data or keeps the business ledgers and other documentation in electronic form, the supervised entity shall provide the necessary technical support to the authorized persons during inspection of such data i.e. of business ledgers and documentation.
The supervised entity shall appoint a representative that will provide the necessary assistance to the authorized persons for unobstructed conducting of direct supervision.
The supervisory authority may hire other persons that will be present during the direct supervision in order to provide the appropriate expert support to the authorized persons in the course of such supervision.
Provisions of this Article shall apply mutatis mutandis also in the case where the supervisory authority conducts direct supervision at a person outsourced by the supervised entity to perform individual operational tasks, as well as at other persons having proprietary, management and business relations with the supervised entity.
Article 129
The authorised persons shall draw up minutes about the completed supervision (hereinafter referred to as: supervision minutes).
The supervisory authority shall serve the supervision minutes on the supervised entity, to which it may submit objections within 15 business days from the date of serving of those minutes.
The supervisory authority shall not consider any objections referred to in paragraph 2 of this Article relating to the factual changes that occurred in the period following the completion of the supervision.
A supplement to the supervision minutes shall be drawn up where it is determined by means of a verification of the allegations stated in the objections referred to in paragraph 2 of this Article that the facts of the case are materially different from the facts presented in the minutes.
The supplement to the supervision minutes shall be served on the supervised entity within 15 business days from the date of submission of objections to those minutes.
If it determines that the objections of the supervised entity on the supervision minutes are unfounded, i.e. that they do not have material impact on the determined facts of the case, the supervisory authority shall draw up an official note on that and serve it on the supervised entity.
Decision on Discontinuation of Procedure
Article 130
The supervisory authority shall pass a decision on discontinuation of the supervision procedure completed with a supervised entity if no irregularities or deficiencies in the operations of the supervised entity have been established in the supervision minutes or if the supervised entity, in the objections submitted within the time limit prescribed by this Law, has successfully contested all findings from the supervision minutes.
The decision referred to in paragraph 1 of this Article shall be served on the supervised entity.
Check and Prohibition of Unauthorized Provision of Digital Assets Services
Article 131
Where it is suspected that a legal person, a sole trader or a natural person not licensed by the supervisory authority to provide digital assets services in compliance with this Law engages in provision of digital assets services, the supervisory authority may conduct direct and indirect checks of whether such person provides digital assets services contrary to the provisions of this Law.
Provisions of Articles 123 through 130 of this Law shall apply mutatis mutandis to the check referred to in paragraph 1 of this Article.
If the person referred to in paragraph 1 of this Article fails to provide all the requested data and documentation at the request of the supervisory authority within the time limit set in that request or if it fails to enable the supervisory authority to perform the direct supervision or does not cooperate with the authorized persons, the supervisory authority may impose a fine against that person ranging from:
1) RSD 100,000 to RSD 500,000 for the legal persons and RSD 30,000 to RSD 100,000 for the responsible persons of the legal person;
2) RSD 30,000 to RSD 100,000 for the natural persons.
Where it is determined by means of the check referred to in paragraph 1 of this Article that the person referred to in that paragraph engages in unauthorized provision of digital assets services, the supervisory authority shall pass a decision on prohibition of performance of these activities and deliver it to the competent authorities.
By means of the decision referred to in paragraph 4 of this Article, the supervisory authority shall simultaneously impose a fine against the person referred to in that paragraph, ranging from:
1) RSD 100,000 to RSD 5,000,000 i.e. up to 20% of the total revenue earned in the previous business year if that amount exceeds RSD 5,000,000 for legal persons and RSD 30,000 to RSD 1,000,000 for the responsible persons with the legal person;
2) RSD 30,000 to RSD 2,000,000 for natural persons.
Where the supervisory authority determines by means of a subsequent check that the company i.e. the sole trader against which the prohibition referred to in paragraph 4 of this Article is imposed have not discontinued the unauthorized provision of the services referred to in that paragraph, such unauthorized provision of digital assets services shall constitute an incurable reason for initiating the enforced liquidation procedure, i.e. deletion of the sole trader from the register of business entities by operation of law, in accordance with the law governing the legal position of companies.
In the case referred to in paragraph 6 of this Article, the supervisory authority shall pass a decision on unauthorized provision of digital assets services and deliver it to the authority competent for keeping of the register of business entities in order to initiate the enforced liquidation procedure, i.e. deletion of the company and sole trader from the register.
The supervisory authority shall impose, by means of the decision referred to in paragraph 7 of this Article the measure of freezing of all the accounts of the company and sole trader until the enforced liquidation procedure is initiated, i.e. the deletion of the sole trader from the register.
Provisions of Article 136 of this Law shall apply mutatis mutandis to the imposition of the fines referred to in paragraphs 3 and 5 of this Article.
The total revenue referred to in paragraph 5 of this Article shall have the meaning laid down by the law regulating protection of competition.
Taking of Measures in Supervision Procedure
Article 132
If deficiencies or irregularities in the operations of the supervised entity are identified in the course of the supervision procedure, i.e. if it is determined that such entity has acted in contravention of this Law or regulations passed based on this Law, the supervisory authority shall take one of the following measures with respect to that entity:
1) Send a recommendation;
2) Send a written warning;
3) Issue orders and measures for removal of identified irregularities;
4) Pass a decision on revocation of the licence to provide the digital assets services.
The measures referred to in paragraph 1 of this Article shall be taken by the supervisory authority based on the fact of the case established in the supervision minutes, in compliance with Article 129 of this Law.
Supervisory authority shall pass a decision on taking the measure referred to in paragraph 1, item 3) of this Article.
When it establishes whether and to what extent the supervised entity has complied with the measures referred to in paragraph 1, items 1) through 3) of this Article, the supervisory authority shall either discontinue the supervision procedure or take a new measure with respect to that entity.
Article 133
Where minor irregularities and deficiencies are established in the supervision procedure in the operations of the supervised entity, which do not pose a significant risk in its operations, the supervisory authority shall send a relevant recommendation to that entity.
The recommendation shall include the time limit for removal of irregularities i.e. deficiencies referred to in paragraph 1 of this Article, as well as the time limit within which the supervised entity shall provide the report on removed irregularities i.e. deficiencies inclusive of the relevant proof thereof to the supervisory authority.
Article 134
Where it establishes irregularities in the supervision procedure which do not have a significant and direct impact on the operations of the supervised entity, but might pose a significant risk to operations if they are not removed, or if the supervised entity has failed to act in compliance with the recommendation, the supervisory authority shall send a written warning to the supervised entity.
The written notice shall include the time limit for removal of irregularities referred to in paragraph 1 of this Article, as well as the time limit within which the supervised entity shall provide to the supervisory authority a report on the removed irregularities, inclusive of the relevant proof thereof.
Orders and Measures for Removal of Identified Irregularities
Article 135
If it establishes in the supervision procedure that the supervised entity has failed to comply with this Law or with the regulations passed based on this Law, i.e. with the written warning, the supervisory authority shall pass a decision issuing orders and measures against the supervised entity for removal of the identified irregularities, within a time limit which may not be longer than 60 days from the date of receipt of that decision.
By means of the decision referred to in paragraph 1 of this Article, the supervised entity shall be ordered to implement one or several of the following activities:
1) To bring its operations in line with this Law and the regulations passed based on this Law;
2) To temporarily suspend provision of individual digital assets services;
3) To take adequate measures to protect the users of digital assets, in compliance with this Law;
4) To dismiss management members i.e. managers of the supervision entity, if they no longer comply with the conditions prescribed by this Law, i.e. if they act contrary to the provisions of this Law;
5) To undertake i.e. suspend other activities.
The decision referred to in paragraph 1 of this Article shall include a time limit within which the supervised entity shall provide a report on the removed irregularities to the supervisory authority, inclusive of adequate proof thereof.
Article 136
Where it establishes in the supervision procedure that the supervised entity has failed to comply with this Law or the regulations passed based on this Law, and in particular where the same type of violations have been committed in a certain period by taking advantage of the same situation or a lasting relationship with digital assets users, the supervisory authority may, by means of the decision referred to in Article 135 of this Law, impose a fine against such entity, as well as against a management member and the manager of that entity.
The fine referred to in paragraph 1 of this Article imposed against the supervised entity may not be smaller than RSD 100,000 or larger than RSD 5,000,000, and the fine referred to in that paragraph imposed against a management member and the manager of the supervised entity may not be smaller than RSD 30,000 or larger than RSD 1,000,000.
Where 10% of the total revenue of the supervised entity earned in the previous year exceeds RSD 5,000,000, the fine referred to in paragraph 2 of this Article imposed against the supervised entity may be even higher than RSD 5,000,000 but may not exceed 10% of the total revenue of the supervised entity earned in the previous year.
The fines referred to in this Article may also be imposed against a natural person who, at the time of imposition of the fine, no longer has the capacity of the management member or of the manager of the supervised entity, for the omissions to act i.e. for the breaches referred to in paragraph 1 of this Article committed when these persons performed these functions in the supervised entity.
When imposing the fines referred to in this Article, the supervisory authority shall act by taking into account the criteria referred to in Article 138 of this Law.
When imposing the fine against the management member and the manager of the supervised entity, the supervisory authority shall, in addition to the criteria referred to in Article 138 of this Law, also assess the level of responsibility of that person by taking into account the division of responsibilities for the tasks within the scope of that body laid down by the law and internal acts of the supervised entity, as well as the powers and responsibilities in management of the supervised entity.
Where a fine is imposed in the course of the supervision, the decision referred to in paragraph 1 of this Article shall be passed without any prior statement of the supervised entity, i.e. of a management member and the manager of the entity about the facts and circumstances of relevance for passing of the decision on imposition of this fine, unless where it concerns a person whose function in the supervised entity has ceased.
The supervised entity shall serve the supervision minutes and the decision on imposition of fine on the person who performed the function of a management member and manager of the supervised entity in the period to which the supervision minutes pertain. Upon expiry of 30 days from the date of serving on the supervised entity, it shall be considered that the supervision minutes and the decision on imposition of fine have been served on these persons.
The decision on imposition of a fine shall be enforceable upon serving on the person referred to in paragraph 1 of this Article.
If the management member and the manager of the supervised entity, including the persons who performed these functions in the supervised entity, fail to pay the fine within the time limit set out in the decision on imposition of fine, the supervised entity shall pay this fine within eight days from the expiry of the time limit set out in that decision.
The fines referred to in this Article shall be paid into the account of the supervisory authority.
The supervised entity shall provide to the supervisory authority proof of payment of the fines referred to in this Article into the account of the supervisory authority within the time limit set out in the decision on imposition of fine at the latest i.e. within eight days from the expiry of that time limit if the supervised entity pays the fine instead of the persons referred to in paragraph 10 of this Article in accordance with that paragraph.
If the liability based on the fine referred to in this Article is not paid within the time limit set out in the decision on imposition of fine, the supervisory authority shall be entitled to calculate default interest on the amount thus owed.
The enforceable decisions on imposition of the fine referred to in this Article shall constitute grounds for enforced collection from the account of the supervised entity in compliance with the law regulating payment operations.
The total revenue referred to in paragraph 3 of this Article shall have the meaning laid down by the law regulating protection of competition.
Revocation of Licence to Provide Digital Assets Services
Article 137
The supervisory authority shall pass a decision on revocation of the licence to provide digital assets services in the following cases:
1) If it establishes that the digital assets service provider has not commenced providing these services within six months from the date of passing of the decision on granting the licence to provide digital assets services or that it has not provided these services for a period longer than six months;
2) If the digital assets service provider notifies the supervisory authority in writing that it no longer intends to provide these services or that it intends to conduct the liquidation procedure;
3) If it identifies graver infringements of the regulations governing prevention of money laundering and financing of terrorism;
4) If the digital assets service provider does not enable it to conduct supervision of its operations.
The supervisory authority may pass the decision on revocation of the licence to provide digital assets services in the following cases:
1) If it determines that the digital assets service provider no longer fulfils the conditions referred to in Article 56 of this Law;
2) If it determines that the decision on granting licence to provide digital assets services has been passed on the basis of false information;
3) If it determines that the activities of the digital assets service provider are associated with money laundering or financing of terrorism;
4) If it determines that the digital assets service provider has not complied with the orders and measures referred to in Article 135 of this Law on time;
5) If it determines that the digital assets service provider does not maintain the minimum capital in compliance with the provisions of this Law;
6) If it determines that the digital assets service provider has committed a graver infringement of the provisions of this Law or of the regulations passed based on this Law.
The digital assets service provider shall provide the notice referred to in paragraph 1, item 2) of this Article to the supervisory authority no later than 30 days prior to the date of termination of provision of digital assets services i.e. to the date of initiation of the liquidation procedure, as well as to provide, at the request of the supervisory authority, the documentation set out in that request and proof that it has sufficient funds to settle all of its liabilities relating to provision of digital assets services. The time limit referred to in this paragraph shall run from the date of provision of the duly completed documentation referred to in that paragraph.
The notice of revocation of the licence to provide digital assets services shall be published on the web site of the supervisory authority.
Supervisory Authority’s Discretionary Right
Article 138
The supervisory authority shall decide on the measure that it takes in respect of the supervised entity based on the discretionary assessment of:
1) The gravity of the identified irregularities;
2) The demonstrated readiness and capability of the management members and the managers of the supervised entity to remove the identified irregularities;
3) Other relevant circumstances under which the irregularity has been committed.
When assessing the gravity of the identified irregularities, the following shall in particular be assessed:
1) The supervised entity’s level of exposure to individual types of risks;
2) The impact of the committed irregularity on the supervised entity’s future operations i.e. performance of activities;
3) The number of identified irregularities and their interdependence;
4) The duration and frequency of the committed irregularities;
5) The lawfulness of the supervised entity’s operations i.e. performance of activities.
When assessing the demonstrated readiness and capability of the management members and managers of the supervised entity to remove the identified irregularities, the following shall in particular be assessed:
1) The capability of these persons to identify, measure, monitor, assess and manage the risks in the supervised entity;
2) The efficiency in removal of the previously identified irregularities, and in particular in implementing the measures referred to in Article 135 of this Law;
3) The awareness of persons with a qualifying holding and of the management of the supervised entity of the difficulties in the operations i.e. performance of activities of that entity;
4) The level of cooperation with the authorized persons in the course of supervision.
Publishing of Imposed Measures and Sanctions
Article 139
The supervisory authority may publicly, on its web site and/or in some other appropriate manner, inform the public of the imposed measures and/or sanctions in relation to the infringements of the provisions of this Law, once that the supervised entity has been notified of that measure and/or sanction.
The method of publishing of data referred to in paragraph 1 of this Article may be regulated in more detail by a regulation of the supervisory authority.
Article 140
One who uses insider information, with the intention of acquiring proceeds for themselves or for another person, or cause damage to other persons:
1) Directly or indirectly while acquiring, disposing of and attempted acquiring or disposal for own account or for the account of another holder of digital assets to which such information relates, or
2) For disclosing and making available insider information to any other person, or
3) For recommending or inducing another person, based on insider information, to acquire or dispose of digital assets to which such inside information relates,
Shall be sanctioned with a fine or imprisonment for up to one year.
If the offence referred to in paragraph 1 of this Article resulted in the acquisition of proceeds or incurring of damage to other persons in the amount exceeding one million and five hundred thousand dinars, the perpetrator shall be sanctioned by imprisonment for up to three years and a fine.
If the offence referred to in paragraph 1 is committed by a person who has come into possession of insider information by virtue of membership in the management or supervisory bodies of the issuer, stake in the capital of the issuer, access to information obtained in the normal exercise of employment, pursuit of profession or other duties, i.e. by way of criminal offences that he has committed, the perpetrator shall be sanctioned by a fine or imprisonment of up to three years.
If the offence referred to in paragraph 3 of this Article resulted in the acquisition of proceeds or incurring damage to other persons in the amount exceeding one million and five hundred thousand dinars, the perpetrator shall be sanctioned by imprisonment of six months to five years and a fine.
Any attempt at committing the offences referred to in paragraph 1 of this Article shall be sanctioned.
Article 141
One who engages in market manipulation on the basis of which gains proceeds for himself or for another person, or incurs damage to other persons by:
1) Concluding a transaction or issuing orders to trade which give, or are likely to give, false information as to the supply of, demand for or the price of digital assets or by which the person, i.e. persons acting in collaboration, maintain the price of one or more digital assets at an abnormal level, or
2) Concluding transactions or issuing orders to trade which employ fictitious actions or any other form of deception or fraud, or
3) Disseminating information through the media, including the internet, or by any other means disseminating false news or news which might be misleading about digital assets, knowing or ought to have been knowing that the information was false or misleading,
Shall be sanctioned by imprisonment of six months to five years and a fine.
If the offence referred to in paragraph 1 of this Article has caused a significant disruption on the digital assets market, the perpetrator shall be sanctioned by imprisonment of three to eight years.
Any attempt at committing the offence referred to in paragraph 1 of this Article shall be sanctioned.
Measures and Sanctions against a Financial Institution supervised by the National Bank of Serbia
Article 142
The National Bank of Serbia shall impose measures and sanctions against a financial institution supervised by the National Bank of Serbia in compliance with the provisions of special laws regulating operations of these institutions if it establishes that such financial institution has violated the provisions of this Law.
Fine against a Legal Person, Sole Trader and Natural Person
Article 143
The National Bank of Serbia shall, by means of a decision, impose a fine of RSD 50,000 to RSD 5,000,000 against a legal person that as a person related to a financial institution supervised by the National Bank of Serbia acts contrary to Article 13, paragraphs 4 and 5 of this Law (Article 13, paragraphs 4 and 5).
For the actions referred to in paragraph 1 of this Article, the National Bank of Serbia shall also impose a fine, by means of a decision, of RSD 50,000 to RSD 1,000,000 against the responsible person in the legal person.
For the actions referred to in paragraph 1 of this Article, the National Bank of Serbia shall impose a fine, by means of a decision, of RSD 50,000 to RSD 2,000,000 against a sole trader.
For the actions referred to in paragraph 1 of this Article, the National Bank of Serbia shall impose, by means of a decision, a fine of RSD 30,000 to RSD 1,000,000 against a natural person.
The supervisory authority shall impose a fine, by means of a decision, of RSD 50,000 to RSD 5,000,000 against a legal person which:
1) Advertises an initial offering of digital assets for which no white paper has been approved, contrary to Article 17 of this Law (Article 17);
2) Advertises digital assets for which no white paper has been approved contrary to Article 31, paragraph 5 of this Law (Article 31, paragraph 5);
3) Without prior consent from the supervisory authority acquires a qualified holding in a provider of digital assets services or increases such holding so that it acquires from 20% to 30%, more than 30% to 50% or more than 50% of the voting rights or capital in such provider, i.e. thus becoming its parent company (Article 66).
For the actions referred to in paragraph 5 of this Article, the supervisory authority shall also impose a fine, by means of a decision, of RSD 50,000 to RSD 1,000,000 against the responsible person in the legal person.
For the actions referred to in paragraph 5 of this Article, the supervisory authority shall impose a fine, by means of a decision, of RSD 50,000 to RSD 2,000,000 against a sole trader.
For the actions referred to in paragraph 5 of this Article, the supervisory authority shall impose a fine, by means of a decision, of RSD 30,000 to RSD 1,000,000 against a natural person.
Fine Imposed against an External Auditor
Article 144
The supervisory authority shall impose a fine, by means of a decision, of RSD 100,000 to RSD 5,000,000 against an external auditor performing the audit of the financial statements of a digital assets service provider referred to in Article 90, paragraphs 1 and 2 of this Law, if it fails to notify the supervisory authority without delay of the facts and data referred to in paragraph 3 of that Article.
For the action referred to in paragraph 1 of this Article, the supervisory authority shall also impose a fine, by means of a decision, of RSD 50,000 to RSD 1,000,000 against the responsible person in the external auditor.
IX TRANSITIONAL AND FINAL PROVISIONS
Article 145
The persons providing digital assets services shall bring their business operations and their general acts in line with the provisions of this Law and the secondary legislation passed on the basis of this Law, and to submit adequate applications for licensing to the supervisory authority, within six months from the date of entry into force of this Law.
Entry into Force and Beginning of Application
Article 146
This Law shall enter into force on the eighth day from the date of its publication in the "Official Herald of the Republic of Serbia", while it shall be applied upon expiry of six months from the date of its entry into force.