Response to consultation on RTS to specify the minimum contents of the liquidity management policy and procedures under MiCA
Question 1. Do respondents have any concerns of Article 1 for the identification, measurement and monitoring of liquidity risk of issuers? Do respondents think that the main aspects in the processes for issuers of tokens to properly manage liquidity risk are captured?
The WGC sees an issue around the procedures for identifying, measuring and managing liquidity risk in Article 1 of the draft RTS. Physical custody of gold does not work the same as having custody of other types of financial instruments with custodians. With gold the custodians are the vault operators which are limited in number. Thus in order for issuers of gold tokens as well as tokens referencing other physical assets to ensure custody based on the nature of the asset, we propose following change to Article 1 – paragraph 5 of the draft RTS:
Paragraph 5: Issuers of asset-referenced tokens and/or e-money institutions issuing e-money tokens that have to apply Article 45(3) of Regulation (EU) 2023/1114 shall have in place specific measures and limits relevant to and reflecting the specific nature of the reserve assets to avoid concentration of the reserve of assets by custodian
Question 2. Do respondents have any comment on the minimum content of the liquidity contingency policy proposed in Article 2? In particular, do respondents have any concern on the inclusion of the required indicator to measure deviations between the market value of the token and the market value of the assets referenced as an early warning signal to be calibrated by the issuer?
N/A
Question 3. Do respondents find any challenge in the application of the segregation of the liquidity management policy as envisaged in Article 3?
N/A
Question 4. Do respondents have any comment regarding the minimum content envisaged in Article 4 of these RTS about the liquidity stress testing under Article 45(4) of MiCAR to be included in the liquidity management policy?
N/A
Question 5. Do respondents find any provision unclear to apply?
N/A
Question 6. Do respondents have any comment on the impact assessment provided?
N/A