EBA and ESMA Issue Joint Guidelines for Evaluating Crypto Stakeholders and Management Bodies
Summary:
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued a joint consultation paper, including two drafts, to evaluate the suitability of management teams and major stakeholders in issuers of asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs). The guidelines strive to safeguard the crypto market and instill trust, aiming to reduce potential rule application discrepancies. The EBA encourages stablecoin issuers to voluntarily adhere to guiding principles related to risk management and consumer protection in anticipation of upcoming regulatory changes.
On October 20, the European Banking Authority (EBA) alongside the European Securities and Markets Authority (ESMA) issued a shared consultation paper. This paper highlights two preliminary drafts, focusing on evaluating the aptness of management bodies and those with significant holdings in issuers of asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs).
The jointly proposed guidelines for evaluating the readiness of those with substantial stakes in ART or CASP issuers provide supervisors with a mutual methodology. This covers the authorization of ART and CASP issuance and the carrying out of financial assessments for prospective purchases.
On the other hand, the joint guidelines proposed to assess the aptitude of management members in ART and CASP issuer firms provide unified criteria. The criteria includes evaluating their understanding, competence, probity, and ability to commit enough time to meet their duties.
To cultivate and secure the trustworthiness of the crypto market, as well as its related services, it's essential to confirm the competency of both the management bodies of ART and CASP issuers and those looking to gain or purchase substantial stakes in them.
The purpose of these drafts and their guidelines is to bring clarity and uniformity in evaluating the appropriateness of the management body, shareholders, and those with significant holdings. This is planned to reduce the possibility for the varied application of rules and regulatory arbitrage while the consultation period stays open until January 22, 2024.
In anticipation of future regulations, the European Union's banking regulator urged stablecoin issuers to willingly adopt certain "guiding principles" along the lines of risk management and consumer protection. On July 12, the EBA revealed its first batch of measures for public opinion aiming to clarify the necessities of the Markets in Crypto-Assets regulation (MiCA), which is intended to be enforced by June 30, 2024.
Published At
10/20/2023 9:55:22 AM
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