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Shaping the future of MiCAR: EBA consults on requirements for policies and procedures on conflicts of interest for issuers of ARTs

As part of its mandates to clarify certain provisions of the Markets in Crypto-assets Regulation (MiCAR), the European Banking Authority (EBA) has published, on 7 December 2023, a consultation paper on draft regulatory technical standards (RTS) to clarify the requirements for issuers of asset-referenced tokens (ARTs) to identify, prevent, manage and disclose conflicts of interest, as set out in Article 32 of MiCAR.

The EBA welcomes feedback from all relevant stakeholders by 7 March 2024 and will hold a virtual hearing on 11 January 2024 to discuss the draft RTS.

The draft RTS address the following topics:

  • How to identify potential conflicts of interest arising from the issuing, processing and redeeming of ARTs, as well as from the investment or management of reserve assets as defined in Article 36 of MiCAR (including when third parties are involved);
  • The written policies and procedures that issuers of ARTs must have in place to prevent and manage conflicts of interest, and which are under the ultimate responsibility and oversight of the management body;
  • The personal transactions policies and procedures that issuers of ARTs must have in place;
  • Specific rules applicable to the remuneration policies, procedures and arrangements of issuers of ARTs to avoid creating conflicts of interest;
  • Rules on the appointment and mission of the person responsible for the management of conflicts of interest; and
  • The disclosure rules for conflicts of interest and the measures taken to prevent or mitigate them (noting that disclosure alone shall not constitute a means to manage and mitigate conflicts of interest).

The European Securities and Markets Authority (ESMA) has a similar mandate to develop RTS on conflicts of interest requirements for crypto-asset service providers under Article 72(5) of MiCAR. The draft RTS proposed by EBA are largely aligned with the draft RTS proposed by ESMA, although there are some slight differences due to the different types of business involved. ESMA’s consultation on this topic closed on 20 September 2023.

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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