Response to consultation on information for assessment of a proposed acquisition of qualifying holdings in issuers of ARTs under MiCAR
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As a matter of principle, we agree with the information request laid down in Article 1 and with the granularity envisaged for the information to be provided by proposed acquirers that are trusts, AIF or UCITS management companies or sovereign wealth funds. However, the following adjustments would, in the ABBL’s view, be required with regards to content of the information to be provided:
- article 1 (4) (d) of the Draft RTS Change of Control: the request for a detailed description of the performance of qualifying holdings of crypto-asset services previously acquired by AIFs or UCITS in the last three years does not seem to match the objective of the assessment by the competent authority (CA) nor the assessment criteria set out in article 42 (1) of MiCAR. The suitability of the proposed acquirer cannot be inferred from the analysis of an element ¬ such as the performance of shares in other undertakings – which does not completely depend on the skills and experience of the proposed acquirer, nor the fund manager. Being a suitability assessment, and not a merit-based one, this information seems disproportionate and should not be requested. The same remarks is valid for the related requirement of indicating whether the previous acquisition of such qualifying holdings was approved by a CA.
- article 1(5)(c) of the Draft RTS Change of Control: where the proposed acquirer is a sovereign wealth fund, it will have to provide, among other information, the names and positions of the individuals in high level administrative position in the ministry, government department or other public body who are in charge of determining the investment policy and who are responsible for making the investment decisions for the sovereign wealth fund. This is a more burdensome information compared to the ESMA draft RTS on information for notification of acquisition of qualifying holdings for CASPs, where only the information related to the persons responsible for making the investment decisions needs to be submitted. That being said, we do not see any objective reason that could justify the above differentiation between CASP and ART issuers. We therefore to remove the requirement to communicate the names and positions of the individuals who are in charge of determining the investment policy.
- article 1 (5) (d) of the Draft RTS Change of Control: the concept of “details of any influence” should be clarified in order to mitigate the risk of divergent interpretations by competent authorities, in particular to clarify if it encompasses only influence by the effect of applicable laws or also de facto influence. Also, we question the cross-reference to point (i) therein and consider that it should rather be a cross-reference to point (a).
- article 2 (a) (vi) of the Draft RTS Change of Control: it could be useful to clarify that, notwithstanding the three months old limit set out therein, the relevant documents do not need to be resubmitted if the assessment by the CA lasts more than three months.
In general, we consider that the list of information under Article 8 complete and comprehensive to assess the financing of the acquisition, in particular as regards funding originated in the crypto ecosystem.
However, in the last paragraph of article 8 (1) of the Draft RTS Change of Control, “For the purposes of point (c)” should rather read “For the purposes of point (d).
Subject to our answer to questions 1 to 4 above and the comment below, we generally consider the provisions of this draft RTS sufficiently clear and comprehensive.
Regarding article 9 (b) of the draft RTS, where the proposed acquisition would result in the proposed acquirer holding a qualifying holding in the target entity of up to 20%, the proposed acquirer should provide information in particular on whether or not it intends to act as an active minority shareholder and the rationale for such action. In the same scenario, for CASP, the ESMA draft RTS on qualifying holdings require the proposed acquirer to communicate whether or not it intends to exercise any form of control over the target entity. We cannot grasp the rationale behind this differentiation in terminology and suggest to use a uniform wording in both texts. As the concept of “any form of control” is not defined in existing EU legal acts, preference should be given to the concept of acting as an active minority shareholder, which is also used – under the same circumstances – in section 10 of the recommended list of information required for the assessment of an acquisition of a qualifying holding, annex I to the Joint ESA guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector.
Question 1. Do you agree with the information request laid down in Article 1 and with the granularity envisaged for the information to be provided by proposed acquirers that are trusts, AIF or UCITS management companies or sovereign wealth funds?
PartiallyAs a matter of principle, we agree with the information request laid down in Article 1 and with the granularity envisaged for the information to be provided by proposed acquirers that are trusts, AIF or UCITS management companies or sovereign wealth funds. However, the following adjustments would, in the ABBL’s view, be required with regards to content of the information to be provided:
- article 1 (4) (d) of the Draft RTS Change of Control: the request for a detailed description of the performance of qualifying holdings of crypto-asset services previously acquired by AIFs or UCITS in the last three years does not seem to match the objective of the assessment by the competent authority (CA) nor the assessment criteria set out in article 42 (1) of MiCAR. The suitability of the proposed acquirer cannot be inferred from the analysis of an element ¬ such as the performance of shares in other undertakings – which does not completely depend on the skills and experience of the proposed acquirer, nor the fund manager. Being a suitability assessment, and not a merit-based one, this information seems disproportionate and should not be requested. The same remarks is valid for the related requirement of indicating whether the previous acquisition of such qualifying holdings was approved by a CA.
- article 1(5)(c) of the Draft RTS Change of Control: where the proposed acquirer is a sovereign wealth fund, it will have to provide, among other information, the names and positions of the individuals in high level administrative position in the ministry, government department or other public body who are in charge of determining the investment policy and who are responsible for making the investment decisions for the sovereign wealth fund. This is a more burdensome information compared to the ESMA draft RTS on information for notification of acquisition of qualifying holdings for CASPs, where only the information related to the persons responsible for making the investment decisions needs to be submitted. That being said, we do not see any objective reason that could justify the above differentiation between CASP and ART issuers. We therefore to remove the requirement to communicate the names and positions of the individuals who are in charge of determining the investment policy.
- article 1 (5) (d) of the Draft RTS Change of Control: the concept of “details of any influence” should be clarified in order to mitigate the risk of divergent interpretations by competent authorities, in particular to clarify if it encompasses only influence by the effect of applicable laws or also de facto influence. Also, we question the cross-reference to point (i) therein and consider that it should rather be a cross-reference to point (a).
- article 2 (a) (vi) of the Draft RTS Change of Control: it could be useful to clarify that, notwithstanding the three months old limit set out therein, the relevant documents do not need to be resubmitted if the assessment by the CA lasts more than three months.
Question 2. Do you agree with the proportionate approach to the request of information to be submitted by proposed indirect acquirers of qualifying holdings based on whether they are identified via the control or the multiplication criterion?
We agree with the proportionate approach to the request of information to be submitted by proposed indirect acquirers of qualifying holdings based on whether they are identified via the control or the multiplication criterion. Hence, the differentiation between indirect acquirers identified via the control criteria and those identified with the multiplication criteria is in line with the Joint ESA guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector.Question 3. Do you consider the list of information under Article 8 complete and comprehensive to assess the financing of the acquisition, in particular as regards funding originated in the crypto ecosystem?
PartiallyIn general, we consider that the list of information under Article 8 complete and comprehensive to assess the financing of the acquisition, in particular as regards funding originated in the crypto ecosystem.
However, in the last paragraph of article 8 (1) of the Draft RTS Change of Control, “For the purposes of point (c)” should rather read “For the purposes of point (d).
Question 4. Do you agree with the identified cases where reduced information requirements apply, with the related safeguards and with identified information specific for the proposed acquisition?
We agree with the identified cases where reduced information requirements apply, with the related safeguards and with identified information specific for the proposed acquisition.Question 5. Do you find the provisions of this draft Regulation sufficiently clear and comprehensive?
PartiallySubject to our answer to questions 1 to 4 above and the comment below, we generally consider the provisions of this draft RTS sufficiently clear and comprehensive.
Regarding article 9 (b) of the draft RTS, where the proposed acquisition would result in the proposed acquirer holding a qualifying holding in the target entity of up to 20%, the proposed acquirer should provide information in particular on whether or not it intends to act as an active minority shareholder and the rationale for such action. In the same scenario, for CASP, the ESMA draft RTS on qualifying holdings require the proposed acquirer to communicate whether or not it intends to exercise any form of control over the target entity. We cannot grasp the rationale behind this differentiation in terminology and suggest to use a uniform wording in both texts. As the concept of “any form of control” is not defined in existing EU legal acts, preference should be given to the concept of acting as an active minority shareholder, which is also used – under the same circumstances – in section 10 of the recommended list of information required for the assessment of an acquisition of a qualifying holding, annex I to the Joint ESA guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector.