Response to consultation on draft RTS on the minimum content of the governance arrangements on the remuneration policy under MiCAR
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For example, many crypto-native firms do not have traditional structures which would enable variable remuneration to be paid in shares, share‐linked instruments or equivalent ownership interests.
We also believe that the percentages outlined in para 1 i) and k) are significantly prohibitive when seen in relation to the size of the market and nature of the risk, neither of which are comparable to credit institutions or investment firm activities.
Finally, we encourage EBA to reflect on the potential negative competitive impact of such restrictive measures for significant ARTs/EMTs in the EU. Digital assets and stablecoin markets are global in nature and given such prohibitive regiles do not exist in several other major jurisdictions which are developing crypto legislation (UK, USA, Hong Kong, Singapore) there’s a risk that the attractiveness of the MiCA passport will be largely or entirely negated by overly conservative remuneration provisions.
Question 1. Are the definitions within Article 1 appropriate and sufficiently clear?
See our general comments in the attachedQuestion 2. Are the provisions within Article 2 appropriate and sufficiently clear?
See our general comments in the attachedQuestion 3. Are the provisions within Article 3 appropriate and sufficiently clear?
See our general comments in the attachedQuestion 4. Are the criteria of identification of staff appropriate and sufficiently clear?
We believe the criteria of identification of staff to be overly detailed/prescriptive relative to the size of players likely to be in scope for these RTS. This article is an example of where EBA has, in our view, too rigidly applied existing remuneration rules for credit institutions and investment firms without taking into account the specificities of digital asset companies’ business models (with the latter employing many fewer employees than the former). Such an exhaustive list of criteria for identified staff, particularly in para 2 e, would have the impact of applying these rules to practically all staff, something which we deem as disproportionate in relation to the risk-based approach.Question 5. Are the provisions within Article 5 appropriate and sufficiently clear?
We believe the provisions on variable remuneration in article 5 once again reflects an overly simplistic, inappropriate copy/paste from existing remuneration provisions applicable to credit institutions and investment firms without taking into account the specific nature, scope and size of native digital asset firms likely to form the bulk of in-scope entities.For example, many crypto-native firms do not have traditional structures which would enable variable remuneration to be paid in shares, share‐linked instruments or equivalent ownership interests.
We also believe that the percentages outlined in para 1 i) and k) are significantly prohibitive when seen in relation to the size of the market and nature of the risk, neither of which are comparable to credit institutions or investment firm activities.
Finally, we encourage EBA to reflect on the potential negative competitive impact of such restrictive measures for significant ARTs/EMTs in the EU. Digital assets and stablecoin markets are global in nature and given such prohibitive regiles do not exist in several other major jurisdictions which are developing crypto legislation (UK, USA, Hong Kong, Singapore) there’s a risk that the attractiveness of the MiCA passport will be largely or entirely negated by overly conservative remuneration provisions.