1. PAYMENTS
1.1 EBA updates Single Rulebook Q&A on PSD2
During the period 1 July 2023 to 30 September 2023, the European Banking Authority (EBA) updated its Single Rulebook Questions and Answers (Q&As) publication on Directive (EU) 2015/2366 (the Revised Payment Services Directive or PSD2) (the Single Rulebook Q&A). The Q&As in respect of the following articles have been updated:
- Article 4 – Definitions;
- Article 72 – Evidence on authentication and execution of payment transactions;
- Article 97 – Authentication; and
- Article 98 - Regulatory technical standards on authentication and communication.
A copy of the Single Rulebook Q&A can be accessed here.
2. DIGITAL FINANCE & CRYPTO-ASSETS
2.1 EBA consults on draft technical standards concerning requirements for ARTs under MiCA
On 12 July 2023, the EBA opened three consultations on draft technical standards under Regulation (EU) 2023/1114 (MiCA). The draft technical standards set out information requirements for the application for authorisation of issuers of asset referenced tokens (ARTs), requirements for issuers of ARTs in respect of their complaint handling procedures and information for the assessment of a proposed acquisition of qualifying holdings in issuers of ARTs.
The EBA has published the following consultation papers on the draft technical standards:
- Draft Regulatory Technical Standards (RTS) to specify the
requirements, templates and procedures for handling complaints
under Article 31 of MiCA (EBA/CP/2023/13).
The consultation paper (EBA/CP/2023/13) can be accessed here.
- Draft RTS on the detailed content of information necessary to
carry out the assessment of a proposed acquisition of qualifying
holdings in issuers of asset-referenced tokens under Article 42(4)
of MiCA (EBA/CP/2023/14).
The consultation paper (EBA/CP/2023/14) can be accessed here.
- Draft RTS on information for application for authorisation to
offer to the public and to seek admission to trading of asset
referenced tokens and Draft Implementing Technical Standards
(ITS) on standard forms, templates and procedures
for the information to be included in the application, under
Article 18(6) and (7) of MiCA (EBA/CP/2023/15).
The consultation paper (EBA/CP/2023/15) can be accessed here.
MiCA will become applicable for issuers of ARTs on 30 June 2024.
The public consultations on the draft technical standards are open until 12 October 2023.
2.2 ESMA published first consultation package on technical standards specifying certain requirements of MiCA
On 12 July 2023, the European Securities and Markets Authority (ESMA) launched a public consultation (First Consultation Package) on technical standards specifying certain requirements under MiCA.
The First Consultation Package is the first of three such consultation packages that ESMA intends to publish as part of the MiCA consultation process, with the subsequent consultation packages expected to be published in October 2023 and Q1 2024.
Under MiCA, ESMA is tasked with developing a number of technical standards and guidelines. Many of these will be developed in close cooperation with the EBA (and much of the content of this First Consultation Package aligns with the technical standards issued by the EBA at 2.1 above). The First Public Consultation covers 5 draft RTS and 2 ITS on the following topics:
- the notification by certain financial entities of their intention to provide crypto-asset services;
- the authorisation of crypto-asset service providers (CASPs);
- complaints handling by CASPs;
- the identification, prevention, management and disclosure of conflicts of interest; and
- the proposed acquisition of a qualifying holding in a crypto-asset service provider (CASP).
The First Consultation Package closed on 20 September 2023. ESMA are now considering the feedback to the First Consultation Package and are expected to publish a final report and submit the technical standards to the European Commission for adoption by 30 June 2024 at the latest.
A copy of the First Consultation Package can be accessed here.
More information on ESMA's MiCA consultation process is available here.
2.3 Irish Funds' crypto-assets supplemental white paper
On 17 July 2023, Irish Funds published a Crypto-Assets Supplemental White Paper (Supplemental White Paper) dated June 2023. The Supplemental White Paper explores the feasibility of the Irish authorised crypto-asset fund market by discussing some of the issues and key risks considered relevant for crypto-asset funds.
The Supplemental White Paper is published in light of the many significant crypto-asset related developments and was issued to build upon the findings in the Irish Funds' white paper in May 2022 entitled "Crypto Assets - Opportunities, Risks and Future Possibilities for Regulated Investment Funds in Ireland".
In particular, the Supplemental White Paper was published by Irish Funds to address operational challenges for service providers or asset servicers to crypto-asset funds. The Supplemental White Paper outlines actions that asset servicers can take in three key areas to prepare for servicing Irish authorised crypto-asset funds and crypto-assets. In summary, the Supplemental White Paper discusses:
- Practical steps to enhance existing anti-money laundering (AML) controls to continue to meet AML obligations by updating systems, processes and procedures to include digital assets and new providers such as CASPs;
- The need for awareness of the complexities inherent in crypto-assets when calculating the net asset value of a fund (NAV), due to many variables such as the "24/7" nature of crypto-asset trading; and
- Certain technical attributes of crypto-assets including the decentralised nature of blockchain technology and the related risks.
The Supplemental White Paper also outlines the Irish Funds' Fintech Working Group's recommended next steps to address some of the risks and challenges identified in the paper and to further develop the crypto-asset funds market in Ireland.
The Supplemental White Paper can be accessed here.
The Irish Funds Crypto Assets - Opportunities, Risks and Future Possibilities for Regulated Investment Funds in Ireland White Paper from May 2022 can be accessed here.
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