The EBA has set new standards with its groundbreaking guidelines for the crypto market
The EBA has issued guidelines on governance, conflicts of interest and remuneration for the crypto-asset market.
In the course of work on shaping the regulatory framework for the crypto-assets market, the European Banking Authority (EBA) published three packages of regulatory guidelines on governance, conflicts of interest and remuneration.
These guidelines were issued under Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on crypto-asset markets and amending Regulations (EU) No. 1093/2010 and (EU) No. 1095/2010 and Directives 2013/ 36/EU and (EU) 2019/1937 (so-called ” MiCAR “)
The guidelines aim to create a transparent, safe and well-regulated cryptocurrency market.
The package of EBA regulatory products indicated above includes:
1. Guidance on the minimum content of governance arrangements for issuers of asset reference tokens (ARTs). These guidelines define the tasks, responsibilities and organization of the management body and the organizational arrangements of issuers, including risk management in all three lines of defense, taking into account the principle of proportionality.
The guidelines have been developed in accordance with Article 34(13) of MiCAR. MiCAR obliges the EBA to cooperate with the European Securities and Markets Authority ( ESMA ) and the European Central Bank (ECB) to define the minimum content of governance arrangements, risk monitoring, business continuity plans, internal control mechanisms and audits.
2. Final draft regulatory technical standards (RTS) on the minimum content of remuneration policies. These standards apply to issuers of significant asset reference tokens (ARTs) and e-money institutions issuing significant e-money tokens (EMTs), as well as issuers of non-significant EMTs where required by Member States. They aim to ensure that remuneration policies promote effective risk management and do not create incentives to lower risk standards.
The RTS have been developed in accordance with Article 45(7) of MiCAR. MiCAR requires the EBA to cooperate with ESMA to identify the main management processes related to the adoption and maintenance of a remuneration policy and the main elements of the policy that should be adopted by the issuer.
3. Final draft regulatory technical standards (RTS) on conflicts of interest for ART issuers. These RTS set out requirements for policies and procedures related to conflicts of interest, including the identification, prevention, management, and disclosure of these conflicts. ART issuers should pay particular attention to conflicts of interest related to the asset reserve, and also take into account the structures and activities of other entities in the group.
These standards have been developed in accordance with Article 32(5) of MiCAR, which requires the EBA to establish conflict of interest policy and procedure requirements for issuers of asset reference tokens.
They also include details and methodology regarding the content of disclosures. The document has been developed in cooperation with ESMA, which has a mandate to develop similar RTS for crypto asset service providers in accordance with Article 72(5) of MiCAR .
The guidelines are available for download here.