The European Banking Authority (EBA) today launched a public consultation on its draft Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of extensions and changes to the use of internal models as well as to the subset of the modellable risk factors applicable under the Fundamental Review of the Trading Book (FRTB) rules. These RTS are part of the Phase 4 deliverables of the EBA roadmap for the new market and counterparty credit risk approaches. The consultation runs until 29 February 2023.
These RTS follow the Capital Requirements Regulation (CRR) differentiation between material extensions and changes, to be approved by competent authorities, and non-material extensions and changes, to be notified to competent authorities. The RTS further divide the latter category into two sub-categories: notified extensions and changes requiring additional information and other extensions and changes.
For the categorisation of model extensions and changes to the relevant categories/sub-categories, the EBA is proposing a combination of qualitative and quantitative conditions. In particular, the quantitative conditions aim at assessing the effect of the extension or change on the IMA own funds requirements and on each component of the FRTB IMA (Expected Shortfall, Stress Scenario Risk Measure and Default Risk Charge), before and after the planned extension or change. In addition, for changes to the institution’s choice of the subset of modellable risk factors, the effect of the change on the ratio PEStRC/ PEStFC is also assessed.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 29 February 2023.
The public hearing on these draft RTS will take place via conference call on 10 January 2024 from 10.00 to 11.30 CET. The EBA invites interested stakeholders to register using this link by 8 January 2024 at 16:00 CET.
These draft RTS have been developed according to Article 325az(8)(a) of Regulation (EU) No 575/2013 (Capital Requirements Regulation - CRR), which mandates the EBA to specify the conditions for assessing the materiality of extensions and changes to the use of alternative internal models and changes to the subset of the modellable risk factors.
The mandate in Art. 325az(8)(a) of the CRR is very similar to the mandate in Art. 363(4)(a), which constitutes the legal basis for the existing RTS on market risk model extension and changes. Therefore, the existing RTS on model extensions and changes is used as a starting point from which the new RTS is developed.
The CRR allows institutions to calculate their own funds requirements for market risk using the alternative internal model approach (IMA), provided that permission from competent authorities is granted. According to the CRR, material changes to the use of the IMA, the extension of the use of the IMA and material changes to the institution's choice of the subset of the modellable risk factors require separate permission from competent authorities. All other extensions and changes to the use of the IMA require notification to the competent authorities.
The European Banking Authority (EBA) today launched a public consultation on new Guidelines on preventing the abuse of funds and certain crypto-assets transfers for money laundering and terrorist financing purposes. These ‘travel rule’ Guidelines specify the steps that Payment Service Providers (PSPs), Intermediary PSPs (IPSPs), crypto-asset service providers (CASPs) and Intermediary CASPs (ICASPs) should take to detect missing or incomplete information that accompanies a transfer of funds or crypto-assets. They also detail the procedures all these providers should put in place to manage a transfer of funds or a transfer of crypto-assets that lacks the required information. These Guidelines aim at forging a common understanding to ensure the consistent application of EU law as well as a stronger anti-money laundering and countering the financing of terrorism (AML/CFT) regime. The consultation runs until 26 February 2024.
The main objective of these Guidelines is to prevent the abuse of funds and crypto-assets transfers for terrorist financing and other financial crime purposes. The Guidelines also ensure that relevant authorities can fully trace such transfers where this is necessary to prevent, detect or investigate money laundering and terrorist financing. To achieve this, the EBA promotes the development of a common understanding by PSPs, IPSPs, CASPs and ICASPs and competent authorities across the EU, of what are the effective procedures to detect and manage the transfer of funds and crypto-assets lacking the required information on the payer/originator and the payee/beneficiary, and how they should be applied.
Comments to the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 26 February 2024.
The EBA will hold a virtual public hearing on the consultation paper on 17 January 2024 from 14:00 to 16:00 Paris time. The EBA invites interested stakeholders to register using this link by 3 January 2023 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
In July 2021 the European Commission issued a legislative package with four proposals to reform the EU’s legal and institutional AML/CFT framework. It included a proposal for a recast of Regulation (EU) 2015/847, now published in the Official Journal of the European Union since June 2023 as Regulation (EU) 2023/1113. The recast brings the EU’s legal framework in line with the Financial Action Task Force (FATF)’s standards by extending the obligation to include information about the originator and beneficiary to CASPs – the so-called “travel rule”. It also amends Directive (EU) 2015/849 to subject CASPs, which are authorized in accordance with the Regulation (EU) 2023/1114 to the same AML/CFT requirements and AML/CFT supervision as credit and financial institutions.
Article 36 (first and second subparagraphs) of Regulation (EU) 2023/1113 and Article 19a(2) of Directive (EU) 2015/849 mandate the EBA to issue guidelines to competent authorities, PSPs and CASPs on: (a) the measures those providers should take to comply with certain articles of Regulation (EU) 2023/1113; (b) the technical aspects of the application of this Regulation to direct debits; and (c) the measures, including the criteria and means for identification and verification of the identity of the originator or beneficiary of a transfer made to or from a self-hosted address.
The EBA is proposing to deliver this mandate by repealing the 2017 Joint European supervisory authorities (ESAs)’s Guidelines under Article 25 of Regulation (EU) 2015/847 on the measures payment service providers should take to detect missing or incomplete information on the payer or the payee, and the procedures they should put in place to manage a transfer of funds lacking the required information (JC/GL/2017/16) and replace them with new Guidelines.
The European Banking Authority (EBA) today launched a consultation on draft Regulatory Technical Standards (RTS) specifying the criteria for determining the composition of supervisory colleges for each issuer of a significant asset referenced token (ART) or of a significant e-money token (EMT). The draft RTS also specify the general conditions for the functioning of supervisory colleges under MiCAR. This consultation together with other consultations papers published today form part of the third batch of MiCAR policy products. All consultations run until 8 February 2024.
The proposals set out in these draft RTS specify: (i) the criteria to be used for determining “the most relevant” custodians of the reserve of assets, trading platforms, payment service providers providing payment services in relation to the significant EMTs and crypto-assets service providers providing custody and administration of crypto-assets on behalf of clients; and (ii) the conditions under which it is considered that ARTs and EMTs are “used at large scale” in a Member State for the purpose of determining the composition of a supervisory college under MiCAR.
Also, the draft RTS specify the general conditions for the functioning of supervisory colleges under MiCAR, including aspects related to participation in the college meetings, the voting procedures for the adoption of a non-binding opinion by the college, and aspects related to the exchange of information and the entrustment of tasks among college members.
Comments on the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
The EBA will hold a virtual public hearing on different consultation papers under MiCAR on 17 January 2024 from 10:00 to 12:30 CET, with this consultation paper being discussed from 12:00 to 12:30 CET. The EBA invites interested stakeholders to register using this link by 15 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft RTS in accordance with Article 119(8) of MiCAR, which mandates the EBA to develop, in cooperation with the European Securities and Markets Authority and the European Central Bank, draft regulatory technical standards (RTS) specifying: (i) the conditions under which the entities referred to in Article 119(2)(d), (e), (f) and (h) of MiCAR are to be considered “the most relevant” in their category, and the conditions under which it is considered that ARTs and EMTs are “used at large scale”, as referred to in Article 119(2) (l) of MiCAR, for the purpose of determining the composition of a college; and (ii) the details of the practical arrangements regarding the functioning of supervisory colleges under MiCAR.
Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the EU. It came into force on 29 June 2023, and the provisions relating to offering to the public and admission to trading of ARTs and EMTs will be applicable from 30 June 2024.
Article 119(1) of MiCAR requires the EBA to establish, manage and chair a consultative supervisory college for each issuer of a significant ART or of a significant EMT. The role of supervisory colleges under MiCAR is to facilitate the exercise of the EBA’s supervisory tasks under MiCAR and to facilitate the cooperation and exchange of information among its members. A college may issue non-binding opinions, addressed to the EBA and/ or the relevant competent authority, on amongst others, changes to the authorisation of, or supervisory measures concerning, issuers of a significant ART or of a significant EMT.
The European Banking Authority (EBA) today launched a consultation under the Markets in Crypto-Assets Regulation (MiCAR) on draft Regulatory Technical Standards (RTS) specifying the methodology to be applied by issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs) denominated in a non-EU currency for reporting transactions associated to uses of these tokens “as a means of exchange”. In addition, the EBA also consulted on draft Implementing Technical Standards (ITS) specifying the related reporting requirements under MiCAR. These consultations together with other consultations papers published today form part of the third batch of MiCAR policy products. All consultations run until 08 February 2024.
The proposals set out in the draft RTS aim to clarify the scope of the transactions associated to the use of ARTs and EMTs denominated in a non-EU currency as a means of exchange that should be reported by issuers, and how issuers should estimate the number and value of such transactions. The draft RTS also aim at contributing to the objective of MiCAR of monitoring and preventing risks that the wide use of ARTs and of EMTs denominated in a non-EU currency as a means of exchange may have on monetary policy transmission and monetary sovereignty within the EU.
The draft ITS, in turn, provide specific templates and related instructions for the issuers of ARTs and of EMTs denominated in a non-EU currency to comply with their reporting obligations. The draft ITS also provide templates and related instructions that crypto-asset service providers (CASPs) must provide to issuers of ARTs and of EMTs denominated in a non-EU currency.
Comments on consultation papers can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
The EBA will hold a virtual public hearing on these consultation papers on 17 January 2024 from 10:00 to 12:30 CET. The EBA invites interested stakeholders to register using this link by 15 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft RTS and ITS in accordance with Articles 22(6) and 22(7) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR), which mandates the EBA to develop two technical standards: (i) draft RTS specifying the methodology to estimate the quarterly average number and average aggregate value of transactions per day that are associated to uses of an ART as a means of exchange within a single currency area”, and (ii) draft ITS to establish standard forms, formats and templates for the purposes of the reporting in Article 22(1), and for the purpose of the reporting by CASPs to the issuer in accordance with Article 22(3). In accordance with Article 58(3) of MiCAR, these RTS and ITS shall also apply mutatis mutandis to EMTs denominated in a non-EU currency.
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the EU. It came into force on 29 June 2023, and the provisions relating to offering to the public and admission to trading of ARTs and EMTs will be applicable from 30 June 2024.
To allow competent authorities to monitor and supervise the use of ARTs and of EMTs denominated in a non-EU currency, Articles 22(1) and 22(3) of MiCAR set out reporting obligations from the issuer of such tokens to the competent authority, and from CASPs providing services related to these tokens to the issuer. These data will also be used by the EBA to assess whether an ART or EMT denominated in a non-EU currency meets the criteria in Articles 43(1) and 56(1) of MiCAR to be classified as significant, as well as by the competent authority to assess whether the thresholds in Article 23 of MiCAR are met.
The European Banking Authority (EBA) today launched a consultation under the Markets in Crypto-Assets Regulation (MiCAR) on draft Regulatory Technical Standards (RTS) specifying the methodology to be applied by issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs) denominated in a non-EU currency for reporting transactions associated to uses of these tokens “as a means of exchange”. In addition, the EBA also consulted on draft Implementing Technical Standards (ITS) specifying the related reporting requirements under MiCAR. These consultations together with other consultations papers published today form part of the third batch of MiCAR policy products. All consultations run until 08 February 2024.
The proposals set out in the draft RTS aim to clarify the scope of the transactions associated to the use of ARTs and EMTs denominated in a non-EU currency as a means of exchange that should be reported by issuers, and how issuers should estimate the number and value of such transactions. The draft RTS also aim at contributing to the objective of MiCAR of monitoring and preventing risks that the wide use of ARTs and of EMTs denominated in a non-EU currency as a means of exchange may have on monetary policy transmission and monetary sovereignty within the EU.
The draft ITS, in turn, provide specific templates and related instructions for the issuers of ARTs and of EMTs denominated in a non-EU currency to comply with their reporting obligations. The draft ITS also provide templates and related instructions that crypto-asset service providers (CASPs) must provide to issuers of ARTs and of EMTs denominated in a non-EU currency.
Comments on consultation papers can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
The EBA will hold a virtual public hearing on these consultation papers on 17 January 2024 from 10:00 to 12:30 CET. The EBA invites interested stakeholders to register using this link by 15 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft RTS and ITS in accordance with Articles 22(6) and 22(7) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR), which mandates the EBA to develop two technical standards: (i) draft RTS specifying the methodology to estimate the quarterly average number and average aggregate value of transactions per day that are associated to uses of an ART as a means of exchange within a single currency area”, and (ii) draft ITS to establish standard forms, formats and templates for the purposes of the reporting in Article 22(1), and for the purpose of the reporting by CASPs to the issuer in accordance with Article 22(3). In accordance with Article 58(3) of MiCAR, these RTS and ITS shall also apply mutatis mutandis to EMTs denominated in a non-EU currency.
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the EU. It came into force on 29 June 2023, and the provisions relating to offering to the public and admission to trading of ARTs and EMTs will be applicable from 30 June 2024.
To allow competent authorities to monitor and supervise the use of ARTs and of EMTs denominated in a non-EU currency, Articles 22(1) and 22(3) of MiCAR set out reporting obligations from the issuer of such tokens to the competent authority, and from CASPs providing services related to these tokens to the issuer. These data will also be used by the EBA to assess whether an ART or EMT denominated in a non-EU currency meets the criteria in Articles 43(1) and 56(1) of MiCAR to be classified as significant, as well as by the competent authority to assess whether the thresholds in Article 23 of MiCAR are met.
The European Banking Authority (EBA) today launched a consultation on draft Guidelines on recovery plans to be drafted by issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs). These draft Guidelines set out the requirements with respect to the format of the recovery plans and the information to be included therein. This consultation together with other consultations papers published today form part of the third batch of MiCAR policy products. The consultation runs until 8 February 2024.
Through recovery planning, issuers of ARTs and EMTs should prepare in advance to face adverse scenarios that may impact their ability to comply with the regulatory requirements applicable to the reserve of assets. The draft Guidelines set out supervisory expectations for issuers to be able to identify and understand the risks they face and lay down possible actions to restore compliance with regulatory requirements.
In specifying the content of the recovery plans, these draft Guidelines build on the existing legislative requirements on recovery planning in financial sector and supervisory experience and adapt them, where relevant, to reflect the specificities of ART and EMT issuers. The draft Guidelines also include provisions on the interaction between the recovery plans drafted by multiple issuers of the same token or by issuers offering two or more tokens to the public, as well as to reduce the burden on credit institutions and investment firms already subject to the recovery planning obligations under the Bank Recovery and Resolution Directive (BRRD).
Comments on the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 08 February 2024.
The EBA will hold a public hearing on different consultation papers in the form of a hybrid meeting on 30 January from 10:00 to 12:00 CET, with the consultation paper on recovery plans being discussed in the morning session. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft guidelines in accordance with Article 46(6) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) after consultation with the European Securities and Markets Authority (ESMA), which mandates the Authority to specify the format of the recovery plan and the information to be provided in the recovery plan.
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs and EMTs will be applicable from 30 June 2024.
Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with the European Insurance and Occupational Pensions Authority - EIOPA).
The European Banking Authority (EBA) today a launched two consultations on draft Regulatory Technical Standards (RTS) on own funds requirements and stress testing of issuers under the Markets in Crypto-Assets Regulation (MiCAR) which form part of the prudential package of MiCAR products. The first RTS specify the adjustment of own funds requirements and stress testing of issuers of asset-referenced tokens and e-money tokens. The second RTS specify the procedure and timeframe to adjust its own funds requirements for issuers of significant asset-referenced tokens or of e-money tokens. These consultations, together with other consultations papers published today, form part of the third batch of MiCAR policy products. The consultations run until 8 February 2024.
The draft RTS on the adjustment of own funds requirements and design of stress testing programmes for issuers specify: i) the criteria for the assessment of ‘higher degree of risk’, ii) the procedure for competent authorities to determine the period of time considered appropriate for issuers to increase the own funds amount to the higher own funds requirements and the measures to be taken to ensure the timely compliance thereof and iii) a minimum set of requirements to issuers for the design and implementation of their stress-testing programmes.
The mentioned requirements apply to issuers of asset-reference tokens (ARTs) subject to own funds requirements as well as to electronic money institutions issuing e-money tokens (EMTs) that are significant under MiCAR and can be expanded to e-money institutions issuing EMTs that are not significant if the competent authority of the home Member State requires it.
While other draft RTS specify the procedure and timeframe for issuers to adjust their own funds requirements to 3% of the average amount of the reserve assets when their ARTs are classified as ‘significant’ ARTs.
Comments on the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
These consultation papers form part of the prudential package of MiCAR products, for which the EBA will hold a hybrid public hearing on 30 January from 10:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered to virtually attend the meeting.
All received contributions will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft RTSs in accordance with Article 35(6) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) and in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), which mandates the Authority to further specify the procedure and timeframe for issuers to adjust to higher own funds requirements, the criteria for requiring a higher amount of own funds and develop the minimum requirements for the design of stress testing programmes and in accordance with Article 45(7)(c) of MiCAR and in close cooperation with the European Securities and Markets Authority (ESMA), which mandates the Authority to specify the procedure and timeframe for an issuer of a ‘significant’ token to adjust the amount of its own funds.
Background
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.
Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with EIOPA).
The European Banking Authority (EBA) today a launched two consultations on draft Regulatory Technical Standards (RTS) on own funds requirements and stress testing of issuers under the Markets in Crypto-Assets Regulation (MiCAR) which form part of the prudential package of MiCAR products. The first RTS specify the adjustment of own funds requirements and stress testing of issuers of asset-referenced tokens and e-money tokens. The second RTS specify the procedure and timeframe to adjust its own funds requirements for issuers of significant asset-referenced tokens or of e-money tokens. These consultations, together with other consultations papers published today, form part of the third batch of MiCAR policy products. The consultations run until 8 February 2024.
The draft RTS on the adjustment of own funds requirements and design of stress testing programmes for issuers specify: i) the criteria for the assessment of ‘higher degree of risk’, ii) the procedure for competent authorities to determine the period of time considered appropriate for issuers to increase the own funds amount to the higher own funds requirements and the measures to be taken to ensure the timely compliance thereof and iii) a minimum set of requirements to issuers for the design and implementation of their stress-testing programmes.
The mentioned requirements apply to issuers of asset-reference tokens (ARTs) subject to own funds requirements as well as to electronic money institutions issuing e-money tokens (EMTs) that are significant under MiCAR and can be expanded to e-money institutions issuing EMTs that are not significant if the competent authority of the home Member State requires it.
While other draft RTS specify the procedure and timeframe for issuers to adjust their own funds requirements to 3% of the average amount of the reserve assets when their ARTs are classified as ‘significant’ ARTs.
Comments on the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
These consultation papers form part of the prudential package of MiCAR products, for which the EBA will hold a hybrid public hearing on 30 January from 10:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered to virtually attend the meeting.
All received contributions will be published following the end of the consultation, unless requested otherwise.
The EBA has developed these draft RTSs in accordance with Article 35(6) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) and in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), which mandates the Authority to further specify the procedure and timeframe for issuers to adjust to higher own funds requirements, the criteria for requiring a higher amount of own funds and develop the minimum requirements for the design of stress testing programmes and in accordance with Article 45(7)(c) of MiCAR and in close cooperation with the European Securities and Markets Authority (ESMA), which mandates the Authority to specify the procedure and timeframe for an issuer of a ‘significant’ token to adjust the amount of its own funds.
Background
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.
Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with EIOPA).
The European Banking Authority (EBA) today launched three consultations on draft Regulatory Technical Standards (RTS) to specify the liquidity requirements of the reserve of assets, the highly liquid financial instruments in the reserve of assets and the minimum content of the liquidity management policy and procedures of relevant issuers of tokens. Furthermore, the EBA consulted on draft Guidelines to establish the common reference parameters of the stress test scenarios to be included in their liquidity stress testing. These consultations form part of the prudential package of MiCAR deliverables and make up the third batch of MiCAR policy products. The consultations run until 8 February 2024.
In the RTS on liquidity requirements of the reserve of assets the EBA proposes minimum percentage rates of the reserve of assets with a maturity of no longer than between 1 and 5 working days. Furthermore, the EBA proposes overall techniques for liquidity management of the reserve of assets. This includes minimum creditworthiness and liquidity soundness of credit institutions taking deposits from issuers, concentration limits to issuers’ deposits with a credit institution and overcollateralisation of the assets referenced by the tokens. Moreover, the draft RTS establish the specific minimum amount of deposits with credit institutions to be held by issuers in each official currency referenced.
In the RTS on highly liquid financial instruments in the reserve of assets, the EBA specifies financial instruments that can be considered highly liquid and bearing minimal market risk, credit risk and concentration risk, where the reserve of assets may be invested in. In developing these RTS, the EBA is required to take into account the various types of assets that can be referenced by an asset-referenced token and their correlation with the highly liquid financial instruments that the issuer might invest in. This is to mitigate different market value volatilities between them. In turn, this ensures that the amount of the reserve of assets can meet, at all times, the market value of the asset referenced for any redemption request that can arise. Furthermore, in the specification of highly liquid financial instruments, the EBA needs to consider the Liquidity Coverage Ratio (LCR) framework and the Undertakings for the Collective Investment in Transferable Securities (UCITs) framework. This latter framework serves to determine the concentration limits in the investment of highly liquid financial instruments by the issuer, which is also part of the mandate to the EBA.
The EBA proposes draft RTS specifying the liquidity management policy and procedures. These ensure that the relevant issuers of tokens properly assess and monitor their liquidity needs and that their reserve assets have a resilient liquidity profile to meet any redemption of the asset-referenced tokens that can be requested at any time by their holders.
The draft EBA Guidelines on liquidity stress testing, lay out the risks identified by the EBA to be covered in the liquidity stress testing. They also pinpoint the methodology identifying the common reference parameters of the stress test scenarios to be included in the liquidity stress testing to be applied. Following application of the Guidelines, the supervisor may strengthen the liquidity requirements of the relevant issuer to cover those risks based on the outcome of the liquidity stress testing.
Comments to the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
These consultation papers form part of the prudential package of MiCAR products, for which the EBA will hold a hybrid public hearing on 30 January from 10:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered to virtually attend the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed, in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), draft RTSs to further specify the liquidity requirements of the reserve of assets, to specify the highly liquid financial instruments in the reserve of assets and to specify the minimum content of the liquidity content of the liquidity management policy and procedures, in accordance with Articles 36(4), 38(5) and 45(7)(b) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR), respectively. Furthermore, the EBA has developed, in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), draft GL to establish the common reference parameters of the stress test scenarios to be included in the liquidity stress testing, following Article 45(8) of MiCAR.
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.
Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with EIOPA).
The European Banking Authority (EBA) today launched three consultations on draft Regulatory Technical Standards (RTS) to specify the liquidity requirements of the reserve of assets, the highly liquid financial instruments in the reserve of assets and the minimum content of the liquidity management policy and procedures of relevant issuers of tokens. Furthermore, the EBA consulted on draft Guidelines to establish the common reference parameters of the stress test scenarios to be included in their liquidity stress testing. These consultations form part of the prudential package of MiCAR deliverables and make up the third batch of MiCAR policy products. The consultations run until 8 February 2024.
In the RTS on liquidity requirements of the reserve of assets the EBA proposes minimum percentage rates of the reserve of assets with a maturity of no longer than between 1 and 5 working days. Furthermore, the EBA proposes overall techniques for liquidity management of the reserve of assets. This includes minimum creditworthiness and liquidity soundness of credit institutions taking deposits from issuers, concentration limits to issuers’ deposits with a credit institution and overcollateralisation of the assets referenced by the tokens. Moreover, the draft RTS establish the specific minimum amount of deposits with credit institutions to be held by issuers in each official currency referenced.
In the RTS on highly liquid financial instruments in the reserve of assets, the EBA specifies financial instruments that can be considered highly liquid and bearing minimal market risk, credit risk and concentration risk, where the reserve of assets may be invested in. In developing these RTS, the EBA is required to take into account the various types of assets that can be referenced by an asset-referenced token and their correlation with the highly liquid financial instruments that the issuer might invest in. This is to mitigate different market value volatilities between them. In turn, this ensures that the amount of the reserve of assets can meet, at all times, the market value of the asset referenced for any redemption request that can arise. Furthermore, in the specification of highly liquid financial instruments, the EBA needs to consider the Liquidity Coverage Ratio (LCR) framework and the Undertakings for the Collective Investment in Transferable Securities (UCITs) framework. This latter framework serves to determine the concentration limits in the investment of highly liquid financial instruments by the issuer, which is also part of the mandate to the EBA.
The EBA proposes draft RTS specifying the liquidity management policy and procedures. These ensure that the relevant issuers of tokens properly assess and monitor their liquidity needs and that their reserve assets have a resilient liquidity profile to meet any redemption of the asset-referenced tokens that can be requested at any time by their holders.
The draft EBA Guidelines on liquidity stress testing, lay out the risks identified by the EBA to be covered in the liquidity stress testing. They also pinpoint the methodology identifying the common reference parameters of the stress test scenarios to be included in the liquidity stress testing to be applied. Following application of the Guidelines, the supervisor may strengthen the liquidity requirements of the relevant issuer to cover those risks based on the outcome of the liquidity stress testing.
Comments to the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 8 February 2024.
These consultation papers form part of the prudential package of MiCAR products, for which the EBA will hold a hybrid public hearing on 30 January from 10:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by 23 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered to virtually attend the meeting.
All contributions received will be published following the end of the consultation, unless requested otherwise.
The EBA has developed, in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), draft RTSs to further specify the liquidity requirements of the reserve of assets, to specify the highly liquid financial instruments in the reserve of assets and to specify the minimum content of the liquidity content of the liquidity management policy and procedures, in accordance with Articles 36(4), 38(5) and 45(7)(b) of Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR), respectively. Furthermore, the EBA has developed, in close cooperation with the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB), draft GL to establish the common reference parameters of the stress test scenarios to be included in the liquidity stress testing, following Article 45(8) of MiCAR.
MiCAR establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.
Among the activities within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and EMTs and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant. Additionally, the EBA is mandated to develop 17 technical standards and guidelines under MiCAR to further specify the requirements for ARTs and EMTs, and an additional 3 mandates jointly with ESMA (and, in one case, also with EIOPA).