Entry into force of MiCAR
On 29 June 2023, the amended Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets (“MiCAR”), entered into force, establishing a harmonised framework for the offer to the public and admission to trading on a trading platform:
- of asset-referenced tokens (“ART”);
- of e-money tokens (“EMT”), and
- other crypto-assets,
as well as requirements for crypto-asset service providers (“CASP”).
MiCAR is part of the Digital Finance Package published by the European Commission on 24 September 2020 which includes the Pilot Regime for market infrastructures based on distributed ledger technology (Regulation (EU) 2022/858) and DORA (Regulation (EU) 2022/2554.
Titles III and IV of MiCAR which relate to the authorisation and supervision of ARTs and EMTs are applicable since 30 June 2024.
The rest of the provisions of MiCAR (in particular those setting out the requirements for CASPs) will apply from 30 December 2024.
Entry into force of Delegated Regulations under MiCAR
The following Delegated Regulations supplementing MiCAR were published in the Official Journal on 30 May 2024 and entered into force on 19 June 2024 – in advance of the application of the MiCAR provisions on ARTs and EMTs:
- Delegated Regulation (EU) 2024/1503 supplementing MiCAR by specifying the fees charged by the EBA to issuers of significant ARTs and issuers of significant EMTs;
- Delegated Regulation (EU) 2024/1504 supplementing MiCAR by specifying the procedural rules for the exercise of the power to impose fines or periodic penalty payments by the EBA on issuers of significant ARTs and issuers of significant EMTs;
- Delegated Regulation (EU) 2024/1506 supplementing MiCAR by specifying certain criteria for classifying ARTs and EMTs as significant; and
- Delegated Regulation (EU) 2024/1507 supplementing MiCAR by specifying the criteria and factors to be taken into account by ESMA, the EBA and competent authorities in relation to their intervention powers.
Final draft Guidelines and Technical Standards of the EBA
On 7 May 2024, the EBA published a press release announcing three sets of final draft regulatory technical standards (RTS) and one set of final draft implementing technical standards (ITS) relating to MiCAR’s provisions on ARTs:
- draft RTS on information for assessment of a proposed acquisition of qualifying holdings in issuers of ARTs under Article 42(4) MiCAR;
- draft RTS on the procedure for the approval of white papers of ARTs issued by credit institutions under article 17(8) MiCA; and
- draft RTS and ITS on information for authorisation as issuers of ARTs under article 18(6) and (7) MiCA.
On 13 June 2024, the EBA published a press release announcing a package of technical standards and guidelines under the MiCA Regulation on prudential matters, namely own funds, liquidity requirements, and recovery plans:
- guidelines on recovery plans under Articles 46 and 55 of Regulation (EU) 2023/1114;
- draft RTS to specify the minimum contents of the liquidity management policy and procedures under Article 45(7)(b) of Regulation (EU) 2023/1114;
- draft RTS to specify the highly liquid financial instruments with minimal market risk, credit risk and concentration risk under Article 38(5) of Regulation (EU) 2023/1114;
- draft RTS to further specify the liquidity requirements of the reserve of assets under Article 36(4) of Regulation (EU) 2023/1114;
- draft RTS to specify the procedure and timeframe to adjust the own funds requirements for issuers of significant asset-referenced tokens or of e-money tokens subject to such requirements;
- draft RTS on adjustment of own funds requirements and stress testing of issuers of asset-referenced tokens and of e-money tokens subject to such requirements.
On 19 June 2024, the EBA published a further press release announcing a package of technical standards and guidelines under MiCAR on the topics of reporting, liquidity stress testing and supervisory colleges thereby completing the delivery of EBA technical standards under MiCAR:
- draft RTS on the methodology to estimate the number and value of transactions associated to uses of asset-referenced tokens as a means of exchange under Article 22(6) of Regulation (EU) No 2023/1114 (MiCAR) and of e-money tokens denominated in a currency that is not an official currency of a Member State under Article 58(3) of that Regulation;
- draft ITS on the reporting on asset-referenced tokens under Article 22(7) of Regulation (EU) No 2023/1114 (MiCAR) and on e-money tokens denominated in a currency that is not an official currency of a Member State pursuant to Article 58(3) of that Regulation;
- guidelines establishing the common reference parameters of the stress test scenarios for the liquidity stress tests referred in Article 45(4) Regulation (EU) 2023/1114;
- draft RTS on supervisory colleges under Article 119(8) of Regulation (EU) No 2023/1114 (MiCAR).
The draft RTS and ITS listed above will be submitted to the Commission for endorsement following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union.
The guidelines listed above will be translated into the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.
ESMA Q&A and Technical Standards
On 25 May 2024, ESMA published a new Q&A in respect of the publication of information by CASPs providing the service of exchange of crypto-assets for funds or other crypto-assets.
Final reports of ESMA on Technical Standards
Following a series of consultations by ESMA (in close cooperation with EBA, EIOPA, and the ECB) for purposes of delivering level 2 and level 3 measures under MiCAR, ESMA has published final reports containing draft technical standards specifying certain requirements of MiCAR:
- On 25 March 2024 – first package final report
- On 3 July 2024 – second package final report
A third package final report is still awaited noting that the consultation for same closed on 25 June 2024.
On 24 March 2024, ESMA published its final report on draft technical standards specifying requirements for cooperation, exchange of information, and notification between competent authorities, European Supervisory Authorities (ESAs), and third countries under MiCAR.
On 31 May 2024, European Securities and Markets Authority (ESMA) published the final report on draft technical standards specifying certain requirements in relation to conflicts of interest for CASPs under the MiCA Regulation.
ESMA and EBA – Joint Guidelines
On 27 June 2024, both ESMA and EBA have released joint guidelines on the suitability of members of the management body, and on the assessment of shareholders and members with qualifying holdings for issuers ARTs and CASPs, under MiCAR.
Operationalisation of MiCAR in Luxembourg
On 21 May 2024, Draft Law No. 8387 (the “Draft Law”) has been submitted to the Luxembourg Parliament (Chambre des Députés). The Draft Law seeks to operationalise MiCAR by designating the CSSF to oversee the regulation’s application, by providing the CSSF with the required supervisory and investigative powers and by establishing an appropriate sanctions framework.
Furthermore, the Draft Law aims to operationalise Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets (“TFR2” or the “Transfer of Funds Regulation 2”) which recasts the first European Regulation on information accompanying transfers of funds (“TFR1”). TFR1 was operationalised in the amended law of 10 November 2009 on payment services (the “Payment Services Law”). The Draft Law proposes to repeal the relevant TFR 1 provisions of the Payment Services Law and instead incorporate them together with the new provisions arising from TFR2, into the Luxembourg law of 16 July 2019 on the operationalisation of European Regulations (the “Law of 16 July 2019”).
Due to the creation of a harmonised EU authorisation regime for CASPs under MiCAR, the Draft Law also intends to repeal with effect from 30 December 2024, the registration provisions for CASPS which are currently included the Luxembourg law of 12 November 2004 (the “AML Law”). From 30 December 2023, CASPs shall be obliged entities under the AML Law.
CSSF guidance in respect of MiCAR
The CSSF is inviting all entities which are considering a notification or submission of an authorisation file with a view to the provision of CASP services or the issuance of ART or EMT to contact it now to kick off an initial discussion. Further guidance and recommendations of the CSSF are available here.
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