The Duty of Integrity and Fair Dealing Under Section 41

Two provisions in the Virtual Assets Act, 2026 use the language of honesty and fair dealing, and it is easy to read them as one rule. They are not. Section 41 sets a general standard for how a licensee runs its whole business. Section 24(3) sets a narrower, fiduciary standard for how a licensee handles a customer’s assets specifically. Both matter, and conflating them leads to compliance frameworks that cover one and miss the other.

This piece works through what section 41 actually says, how it differs from the fiduciary duty, and what an operator should build to evidence compliance with it.

What does section 41 actually require?

Section 41(1) states the core rule in one sentence:

“A Licensee shall conduct its business honestly, fairly and professionally and in accordance with the best interests of its customers and in a manner that upholds the integrity of the market.”

That single sentence carries four separate standards, not one: honesty, fairness, professionalism, and market integrity. A licensee could satisfy one and fail another — a firm might deal honestly with an individual customer while its pricing model damages market integrity more broadly, or vice versa. Section 41 requires all four simultaneously, and section 41(2) adds that the Authority “may prescribe, by Regulations, detailed requirements relating to market conduct, including standards of fair dealing, professional behaviour, and customer treatment.” The detail — what counts as fair dealing in a specific transaction type — is left to Regulations that have not yet been issued.

Is this the same duty as the fiduciary duty over customer assets?

No, and the difference matters for how a compliance programme is built. Section 24(3), in Chapter 4 on prudential requirements and custody, states separately:

“Licensee owes a fiduciary duty to its customers and shall at all times act honestly, fairly, and in the best interests of its customers when dealing with Customer Assets.”

Section 24(3) is scoped to customer assets — the virtual assets and fiat balances a licensee holds, safeguards or controls on a customer’s behalf. Section 41 is scoped to the licensee’s business as a whole: how it markets, how it prices, how it treats a customer who is not currently holding assets with the firm, and how its conduct affects the wider market. A firm could breach section 41 through misleading marketing without ever touching a customer’s assets, and a fiduciary breach under section 24 does not require any market conduct failure at all. In practice, these are two duties that overlap where custody and dealing intersect, and diverge everywhere else.

	Section 24(3) fiduciary duty	Section 41 duty of integrity
Scope	Handling of Customer Assets specifically	The licensee’s business conduct generally
Chapter	Chapter 4 — Prudential, Safeguarding and Custody	Chapter 7 — Market Conduct, Consumer Protection
Triggered by	Holding, safeguarding or controlling customer virtual assets or fiat	Any dealing with a customer, or conduct affecting the market
Detail source	Section 26 custody standards, section 24(4) consent rules	Regulations to be prescribed under section 41(2)

What counts as “the best interests of customers” in practice?

The Act does not define the phrase, and no Regulations under section 41(2) had been issued at the time of writing. What the surrounding chapter does establish is a set of related obligations that give the standard some shape by context:

• Section 44 requires a licensee to identify, manage and disclose conflicts of interest, and not place its own interests above a customer’s.
• Section 45 requires internal complaint-handling procedures, giving customers a route to raise where the standard has not been met.
• Section 42 requires issuers to make risk disclosures and ongoing material disclosures, feeding customers the information a fair dealing standard assumes they have.

Read together, “best interests” in this Act is not a vague aspiration sitting on its own — it is the organising principle that sections 42, 44 and 45 give operational form to. Our reading is that a licensee demonstrating compliance with those adjacent, more specific sections is also building the evidentiary record for section 41 compliance. That is an inference from how the chapter is structured, not a statement the Act makes explicitly.

Can PVARA add more detailed conduct rules later?

Yes — section 41(2) is an open rule-making power, not a closed list. It allows the Authority to prescribe, by Regulations, “detailed requirements relating to market conduct, including standards of fair dealing, professional behaviour, and customer treatment.” Nothing in the text limits what those Regulations might eventually cover, and nothing requires PVARA to issue them on any fixed timetable.

For a firm building its compliance framework now, the practical implication is to design for change. A conduct policy written narrowly around the bare text of section 41(1) will need revising the moment PVARA issues its first market conduct Regulations. A conduct policy built around the four standards — honesty, fairness, professionalism, market integrity — with room to plug in prescribed detail as it arrives, will not.

How does the duty of integrity interact with licensing and enforcement?

Section 41 is not self-enforcing in isolation — it sits inside the Act’s general contravention and sanctions machinery. Section 23(1)(a) allows PVARA to vary, suspend or revoke a licence where “the Licensee has contravened any provisions of this Act,” which includes section 41. Section 59(1) sets out the administrative sanctions available for any contravention of the Act or its Regulations: a written reprimand or public censure, a directive to cease or remedy, a financial penalty of up to the amount prescribed by the Rules, suspension or revocation of the licence, or disqualification of an individual from holding a position of responsibility at a licensee. Section 59(4) separately caps a fine for contravention of the Act’s provisions generally at twenty-five million rupees.

None of these sanctions is written specifically for a section 41 breach; they apply to any contravention of the Act. That is worth knowing precisely because it means a fair-dealing failure is treated with the same enforcement toolkit as a capital or custody breach, not a softer one.

What should a licensee build to evidence section 41 compliance?

Four practical steps, none of which requires waiting for the Regulations under section 41(2):

• Write a conduct policy that names all four standards separately — honesty, fairness, professionalism, market integrity — rather than treating “fair dealing” as a single catch-all.
• Link the conduct policy explicitly to the section 24(3) fiduciary duty, so a single incident affecting both customer assets and general conduct is not handled by two disconnected teams.
• Route conflicts of interest and complaints through the section 44 and section 45 mechanisms, since PVARA will likely read those disclosures as the practical evidence of section 41 compliance.
• Keep the policy modular, so that when PVARA issues market conduct Regulations under section 41(2), the firm is amending one document rather than rebuilding a framework.

A firm’s ongoing compliance obligations under section 22 already require it to maintain compliance systems “in accordance with applicable legal and regulatory requirements” — section 41 is one of the requirements those systems have to cover, alongside capital, custody and AML.

Related reading

• PVARA Exchange License: Capital, Rules & Obligations 2026
• PVARA Transfer & Settlement License: Crypto Payments 2026
• PVARA Licensing Process: NOC to Full Licence, Step by Step

About this analysis

This analysis was prepared by the CoinConnect research desk from the Virtual Assets Act, 2026 as passed by the National Assembly, read as published. Where practice is not yet settled or guidance has not been issued, that is stated in the text above.

Regulatory positions change and specific requirements should be verified against the current position published by the relevant authority before you act on them. This is information and analysis, not legal advice, and it does not create an advisory relationship. Take professional advice on your own circumstances.