Global Trustee and Fiduciary Services Bite-Sized Issue 12 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 12 | 2023 9 QUICK LINKS AIFMD BENCHMARK REGULATION CBDC COSTS & CHARGES CRYPTOASSETS FUND LIQUIDITY LIBOR TRANSITION MiCA OPERATIONAL RESILIENCE UK PRIIPs SUSTAINABLEFINANCE/ESG ASIA EUROPE IRELAND NORTH AMERICA UNITED KINGDOM EBA Consults on Draft Guidelines on Recovery Plans for Issuers of Asset-referenced Tokens and e-Money Tokens Under MiCA Consultation on draft Guidelines on recovery plans to be drafted by issuers of ARTs and 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 on the same day, form part of the third batch of MiCA policy products. 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). Link to Consultation Paper on Guidelines on Recovery Plans under MiCA here EBA Consults on Draft Technical Standards on Own Funds Requirements and Stress Testing of Issuers Under MiCA Two consultations on draft RTS on own funds requirements and stress testing of issuers under MiCA which form part of the prudential package of MiCA 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 on the same day, form part of the third batch of MiCA policy products. 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 ARTs subject to own funds requirements as well as to electronic money institutions issuing EMTs that are significant under MiCA 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. Link to Consultation Paper on the adjustment of Own Funds Requirements and Design of Stress Testing Programmes for Issuers under MiCA here Link to Consultation Paper on RTS on Procedure and Timeframe to Adjust its Own Funds Requirements for Issuers of Significant Asset-referenced Tokens or of E-money Tokens under MiCA here