Brussels (The Brussels Morning Newspaper) – The European Securities and Markets Authority (ESMA), the European Union’s financial markets regulator and manager, has issued its latest edition of the Spotlight on Markets Newsletter.
What Are the Latest Developments in MiCA and DORA?
According to the Press Release, Your one-stop-shop in the world of EU financial markets concentrates in July on the latest developments regarding the Regulation on the Markets in Crypto-Assets (MiCA) and the Digital Operational Resilience Act (DORA). ESMA issued an opinion on global crypto companies using their non-EU execution venues. Under DORA, the European Supervisory Authorities published the second batch of policy products and the Last report on the draft technical standards for subcontracting ICT services and have reported the EU systemic cyber incident coordination framework.
How Does ESMA Address Risks with Non-EU Crypto Execution Venues?
ESMA identifies risks associated with global crypto firms’ complicated structures where execution venues fall outside of the range of MiCA. Such structures may contain the involvement of an EU-authorised agent effectively routing directives to an intra-group execution venue based outside the EU, potentially leading to reduced consumer protection and an unlevel playing area with EU-authorised execution venues.
What Is ESMA’s Opinion on Global Crypto Firms’ Business Structures?
Considering these threats ESMA recommends National Competent Authorities (NCAs) be awake during the authorisation process and evaluate the business structures of global firms to ensure that they do not bypass obligations specified in MiCA, to protect consumers and to ensure transparent and tidy functioning of crypto markets. The Statement calls for a case-by-case assessment, summarising the specific requirements that should be completed regarding best execution, conflicts of interest, the responsibility to act honestly, fairly and professionally in the best interests of consumers and the obligation connecting to the custody and administration of crypto assets on behalf of clients.
In a different letter, ESMA outlined its long-term idea for the functioning of the Sustainable Finance Framework and posted the results of its fifth stress test exercise for Central Counterparties.
In expansion, ESMA, together with the National Competent Authorities, unleashed an analysis of the cross-border requirement of investment services in 2023. New talks on different aspects of the Central Securities Depositories Regulation Refit were established, as well as a new package of public talks in the context of the MiFIR review.
