ESMA (European Securities and Markets Authority) has been charged with determining if the EU should amend any existing regulations to allow for the settlement and trading of tokenized securities. Before launching the pilot program for market infrastructures that use distributed ledger technology (DLT), the regulator seeks opinions.
ESMA Gathers Stakeholders’ Input on DLT Pilot Regime for Securities
The European Securities Observer ESMA will accept public comments regarding the possibility of updating regulations governing the use of DLT solutions on the market. This authority will assess whether certain technical standards (RTS), developed under Markets in Financial Instruments Regulations, (MIFIR), should be updated to apply to securities that are issued, traded, or recorded on DLT.
The standards in question pertain to trade transparency and data reporting requirements, ESMA notes in a “Call for Evidence” document published this week, which seeks feedback from various stakeholders. This includes trading venues and securities settlement systems, entities that plan to operate in the DLT pilot program, as well as other market participants who intend to utilize DLT market infrastructures.
The announcement notes that the text of the DLT pilot is not finalized yet but as an agreement between the European Parliament and the European Council has already been reached in November, ESMA believes it’s necessary to begin consultations now. This is what the regulator said:
DLT Pilot Regime applications will begin in early 2023. There is not much time left for RTS assessment and possible amendments.
Paris-based regulator will review all comments by interested parties before March 4, 2022. The market participants’ feedback will be used by the authority to determine if it is possible to amend the RTS.
If these changes are necessary, the European Securities and Markets Authority (ESMA) will again solicit public opinion through a consultation paper. This paper will be published before finalizing the RTS and is submitted to the European Commission. These proposals will be approved by Brussels’ executive power.
Are you expecting the EU to change its regulations regarding the DLT Pilot regime for settlement and securities trading? Leave your comments below.
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