On 8 November 2023, the European Commission (Commission) published four draft delegated acts under the Regulation on markets in crypto-assets ((EU) 2023/1114) (MiCA) and the European Banking Authority (EBA) published its third and final consultation package on technical standards and guidelines under MiCA.
William Fry’s Financial Regulation and Fintech teams examine these developments.
Commission delegated acts
The European Commission’s delegated acts are intended to supplement MiCA by:
- Specifying criteria for an asset-referenced token (ART) or e-money token (EMT) to be classified as significant (Article 43(11) MiCA).
- Introducing criteria and factors to be taken into account by the European Supervisory and Markets Authority (ESMA), the EBA, and competent authorities in relation to product intervention powers (e.g. the ability of a body/authority to restrict or ban the sale of crypto-assets or related activities) (Articles 103(8), 104(8) and 105(7) MiCA).
- Laying down procedural rules for the EBA to impose fines/penalties on issuers of significant ARTs and EMTs (Article 134(10) MiCA).
- Introducing rules on the supervisory fees charged by the EBA to issuers of significant ARTs and EMTs (Article 137(3) MiCA).
In September 2023, the EBA published its technical advice to the Commission on the criteria for classifying ARTs and EMTs as significant and the fees to be charged by the EBA to issuers of significant ARTs and EMTs.
The Commission plans to adopt the delegated acts in Q2 2024 before the relevant MiCA provisions begin to apply from 30 June 2024.
The draft delegated acts are open for feedback, via the Commission’s Have Your Say portal, until 6 December 2023.
Third EBA consultation package
The first and second batches of EBA consultation packages were published on 12 July 2023 and 5 October 2023, respectively. The EBA’s third and final consultation package was published on 8 November 2023.
The EBA’s third and final round of consultation papers on MiCA technical standards and guidelines includes seven draft Regulatory Technical Standards (RTS), one draft Implementing Technical Standards (ITS) and two sets of draft guidelines covering the following matters:
- RTS to specify the highly liquid financial instruments with minimal market risk, credit risk and concentration risk (Article 38(5) MiCA).
- RTS to further specify the liquidity requirements of the reserve of assets (Article 36(4) MiCA).
- RTS to specify the minimum contents of the liquidity management policy and procedures (Article 45(7)(b) MiCA).
- Guidelines on liquidity stress testing (Article 45(4) MiCA).
Own funds requirements and stress testing of issuers
- RTS to specify the adjustment of own funds requirements and stress testing of issuers of ARTs and EMTs (Article 35 MiCA).
- RTS to specify the procedure and timeframe to adjust its own funds requirements for issuers of significant ARTs or EMTs (Article 45(5) MiCA).
- Guidelines on recovery plans to be drafted by issuers of ARTs and EMTS (Article 46(6) MiCA).
- RTS on the use of ARTS and EMTs denominated in a non-EU currency as a means of exchange (Article 22(6) MiCA).
- ITS on the reporting on ARTs and EMTs denominated in a non-EU currency (Article 22(7) MiCA).
- RTS on the criteria for determining the composition of supervisory colleges for each issuer of a significant ART or EMT. The draft RTS also specify the general conditions for the functioning of supervisory colleges under MiCA (Article 119(8) MiCA).
The deadline for comments on the EBA consultation package is 8 February 2024.
Contributed by Jane Balfe