Opinion

Shaping the future of MiCAR: The EBA's third consultation package on MiCAR

Published Date
Nov 16, 2023
On 8 November 2023, the European Banking Authority (EBA) published a new set of public consultations with respect to draft Regulatory Technical Standards (RTS), draft Implementing Technical Standards (ITS) and draft Guidelines under the Regulation on Markets in Crypto-assets (MiCAR). Although these consultations are mainly relevant for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs), crypto-asset service providers (CASPs) and competent authorities, all interested stakeholders are invited to submit their comments by 8 February 2024.

Draft RTS on supervisory colleges under Article 119(8) of MiCAR

These draft RTS specify the criteria to be taken into consideration to determine the composition of the colleges in charge of the supervision of issuers of significant ARTs and significant EMTs. They also set out the general conditions applicable to the functioning of such supervisory colleges, including aspects related to the participation in the college meetings and operation of such meetings, voting procedures for the adoption of non-binding opinions by a college, and exchange of information and allocation of tasks among college members.

Read the full consultation here.

Draft RTS on the methodology to estimate the number and value of transactions associated to uses of ARTs as a means of exchange under Article 22(6) of MiCAR and of EMTs denominated in a currency that is not an official currency of a Member State pursuant to Article 58(3) of MiCAR

These draft RTS specify the methodology to estimate whether one of the conditions that trigger the quarterly reporting requirements by issuers of ARTs and of EMTs denominated in a non-EU currency to the competent authorities is met. They also set out the criteria for reporting the relevant transactions as well as the systems and procedures that the relevant issuers should have in place for that purpose.

Read the full consultation here.

Draft ITS on the reporting of ARTs under Article 22(7) of MiCAR and EMTs denominated in a currency that is not an official currency of a Member State pursuant to Article 58(3) of MiCAR

These draft ITS specify the quarterly reporting requirements applicable to issuers of ARTs and of EMTs denominated in a non-EU currency to the competent authorities. They also clarify the information obligations applicable to CASPs, providing services related to such ARTs/EMTs, to the relevant issuers for the purpose of the quarterly reporting to the competent authorities. These draft ITS include harmonised reporting and information templates and instructions.

Read the full consultation here.

Draft Guidelines on recovery plans under Articles 46 and 55 of MiCAR

These draft Guidelines set out supervisory expectations for issuers of ARTs and EMTs when drawing-up and maintaining their recovery plan, including the content of that plan, the related governance arrangements, recovery plan indicators and monitoring thresholds, recovering options and scenarios as well as corresponding communication and disclosure measures.

The draft Guidelines also include provisions on:

  • the interaction between the recovery plans drafted by multiple different issuers of the same token;
  • the requirements applicable to issuers offering two or more tokens to the public; and
  • light touch requirements applicable to credit institutions and investment firms already subject to recovery planning obligations under the Bank Recovery and Resolution Directive.

Read the full consultation here.

Draft RTS to specify the adjustment of own funds requirements and stress testing of issuers of ARTs and of EMTs subject to the requirements in Article 35 of MiCAR

These draft RTS set out the procedure and timeframe applicable to issuers of ARTs or of EMTs to adjust their own funds requirements to a higher amount (which can be up to 20% higher than the standard requirements) upon request from the competent authorities when the competent authority considers that an issuer is deemed to have a higher degree of risk. The draft RTS also specify the criteria to be followed by competent authorities to determine whether an issuer of tokens is deemed to have a higher degree of risk.

Finally, these draft RTS define a minimum set of requirements applicable to issuers of ARTs and, where relevant, issuers of EMTs, to design, implement and use their stress testing programmes.

Read the full consultation here.

Draft RTS to specify the procedure and timeframe to adjust its own funds requirements for issuers of significant ARTs or of EMTs subject to the requirements set out in Article 45(5) of MiCAR

These draft RTS set out the procedure and timeframe applicable to issuers of ARTs or of EMTs to adjust their level of own funds to 3% of the average amount of the reserve assets when:

  • ARTs are classified as significant ARTs, whether by application of the criteria in MiCAR or voluntarily; and
  • EMTs are considered as significant EMTs by application of the criteria in MiCAR or competent authorities require an adjustment of own funds level for non-significant EMTs due to the risks triggered by such tokens.

Read the full consultation here.

Draft RTS to specify the minimum contents of the liquidity management policy and procedures under Article 45(7)(b) of MiCAR

These draft RTS set out the minimum content of the liquidity management policy and procedures as well as related liquidity requirements for:

  • issuers of ARTs classified as significant ARTs;
  • issuers of EMTS considered as significant EMTs; and
  • issuers of non-significant ARTs or non-significant EMTs upon request from the competent authorities.

Read the full consultation here.

Draft RTS to further specify the liquidity requirements of the reserve of assets under Article 36(4) of MiCAR

These draft RTS specify the liquidity requirements of the reserve of assets applicable to issuers of significant and non-significant ARTs and of significant EMTs (as well as of non-significant EMTs upon request from the competent authorities), such as maximum maturities or concentration limits in respect of bank deposits.

Read the full consultation here.

Draft RTS to specify the highly liquid financial instruments with minimal market risk, credit risk and concentration risk under Article 38(5) of MiCAR

These draft RTS specify the eligibility criteria for investment of the reserve assets by issuers of significant and non-significant ARTs and of significant EMTs (as well as of non-significant EMTs upon request from the competent authorities), such as the conditions for financial instruments to be considered as highly liquid or concentration limits by issuer.

Read the full consultation here.

Draft Guidelines establishing the common reference parameters of the stress test scenarios for the liquidity stress tests referred in Article 45(4) of MiCAR

These draft Guidelines set out the risks to be assessed, the methodology and the common parameters of the stress test scenarios to be taken into consideration for the purpose of the regular liquidity stress testing that must be conducted by:

  • issuers of ARTs classified as significant ARTs;
  • issuers of EMTS considered as significant EMTs; and
  • issuers of non-significant ARTs or non-significant EMTs upon request from the competent authorities.

Read the full consultation here

Acknowledgments to Romain Garcia-Messelet, intern in the A&O Luxembourg Financial Services Regulatory team, for his contribution to this post.

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This content was originally published by Allen & Overy before the A&O Shearman merger