-
ESMA’s response to proposed MiCA RTS Amendments, highlighting policy goals and legal limitations.
-
Crypto service providers were advised to conduct cyber security audits and reputational checks.
-
The EU wants to reduce the settlement of securities to T+1. This will require significant market investments.
The European Securities and Markets Authority has responded to the European Commission’s proposal for changes to the Markets in Crypto-Assets Regulation Markets in Crypto-Assets Regulation Regulatory Technical Standards. ESMA emphasized certain legal issues raised in the Commission’s proposal and reiterated the policy goals of the original proposal.
The response covers the RTS in two main areas. The first part specifies that financial institutions must include information when they notify their intention to offer crypto-assets services. The second part focuses on the applications that crypto-asset services providers (CASPs), in order to be authorized, must submit. These standards are designed to ensure that crypto-asset service provider enter the European market is thoroughly evaluated to strengthen the market, and to protect investors.
ESMA’s recommendations
ESMA recommended to the European Commission that it make further amendments the MiCA regulation. They suggested that CASPs and financial institutions applying for certification be required to disclose the results from external cybersecurity audits.
ESMA also proposed that management members be evaluated for their reputations, especially in relation to financial services law, anti-money laundering and fraud, and that these checks be expanded to include professional liability and fraud.
These proposed amendments were in response to ESMA’s final report on draft RTS released on March 25, 2020. The Commission informed ESMA that it intended to adopt two standards with changes in September and asked ESMA for a new RTS based upon those adjustments.
Also read: Decoding MiCAR – A Comprehensive Guide to EU’s New Crypto Asset Rules
ESMA has now sent a response to the European Commission, European Parliament, as well as the European Council. The Commission has three months to provide feedback on the proposed RTS.
Parallel to this, the European Union works to reduce the settlement cycle of securities from two days (T+2) down to one day (T+1). ESMA is tackling the challenges, such as harmonization, system modernization and other major investments, that are involved. ESMA has also worked with the European Central Bank in order to coordinate the transition.
This site is for entertainment only. Click here to read more
