Eva Dauberton
News Editor
EBA issues new MiCAR regulatory products
The European Banking Authority (EBA) has released new Regulatory Technical Standards (RTS), Implementing Technical Standards (ITS), and Guidelines (GL) as part of the Markets in Cryptoassets Regulation (MiCAR). These standards and guidelines focus on reporting, liquidity stress testing, and supervisory colleges.
Key takeaways
The EBA’s regulatory products package includes:
- Final draft RTS on the use of asset-referenced tokens (ARTs) and electronic money tokens (EMTs) denominated in a non-EU currency as a means of exchange: These specify the methodology for estimating the number and value of transactions associated with the use of these tokens “as a means of exchange” for reporting under MiCAR.
- Final draft ITS on the reporting obligations of issuers of ARTs and EMTs denominated in a non-EU currency and of cryptoasset service providers (CASPs): These provide specific templates and related instructions for compliance with reporting obligations and specify reporting frequency and related reference and remittance dates. The related technical package, including the Data Point Model (DPM) and validation rules, will be developed and published with the release of the 4.0 Reporting framework.
- GL on liquidity stress testing: These GL lays out the risks to be covered and identify the common reference parameters of the stress test scenarios to be included in the liquidity stress testing.
- Final draft RTS on supervisory colleges: These specify the conditions under which certain entities are to be deemed “the most relevant” in their category and the conditions under which a significant ART or EMT is to be deemed to be “used at large scale” for determining the composition of a supervisory college under MiCAR. In addition, the RTS specify the general conditions for the functioning of supervisory colleges.
Next steps
The draft technical standards will be submitted to the Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union.
The guidelines will be translated into the official EU languages and published on the EBA website.The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.
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EC consults on OTC derivatives identifying reference data under MiFIR
The European Commission has initiated a consultation on a Draft Delegated Regulation specifying over-the-counter (OTC) derivatives identifying reference data to be used for the purposes of transparency requirements, as set out in the Markets in Financial Instruments Regulation (MiFIR).
Some context
Regulation (EU) No 2024/791 (‘MiFIR review’), which amends Regulation (EU) No 600/2014 (‘MiFIR’), came into effect on 28 March 2024. Under Article 8a(2) of MiFIR, OTC derivatives are subject to pre-and post-trade transparency under specific conditions.
MiFIR mandates market operators and investment firms operating a multilateral trading facility (‘MTF’) or an organised trading facility (‘OTF’) that utilise a central limit order book or a periodic auction trading system to make public the current bid and offer prices as well as the depth of trading interests at those prices advertised through their systems. They must also make public the price, volume, and time of executed transactions. The same obligation applies to investment firms that conclude transactions in those derivatives either on their own account or on behalf of clients.
The MiFIR review introduced, alongside identifying reference data for transaction reporting, identifying reference data for the transparency requirements.
Key takeaways
This Draft Delegated Regulation sets out identifying reference data to be used for OTC interest rate swaps and OTC credit default swaps to meet the transparency requirements laid down in Article 8a(2) and Articles 10 and 21 MiFIR. This Draft Delegated Regulation also provides the full set of relevant identifying reference data that need to be assigned to a given ISO 6166 International Securities Identifying Number (‘ISIN’).
As the relevant identifying reference data prescribed by this regulation does not align with the attributes that currently form part of the ISIN standard for those OTC derivatives, this delegated regulation will trigger a revision of the template needed for the assignment of the ISO 6166 ISIN.
The changes will come into effect on 1 September 2025.
Next steps
The consultation is open for four weeks and closes on 10 July 2024.
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RBA raises SSF Standards to ease regulatory burden on small firms
The Reserve Bank of Australia has announced its decision to raise the settlement activity threshold for Securities Settlement Facilities (SSF Standards). This adjustment aims to strike a better balance between the risks presented by small firms to the financial system and the regulatory burden they face.
Some context
The SSF Standards aim to ensure that Clearing and Settlement Facility licensees (CSFLs) conduct their affairs in a way that promotes overall stability in the Australian financial system.
Since 2012, a CSFL operating a SSF is exempt from the SSF Standards if the value of financial obligations settled through the SSF in a financial year does not exceed a threshold of $200 million. The threshold was first introduced in 2005 in recognition of the fact that the activities of small SSFs are unlikely to affect the overall stability of the Australian financial system.
Key takeaways
As a result of this change, the SSF Standards will no longer apply to CSFLs that settle less than $40 billion of financial obligations through their facility in a financial year.
Next steps
This change will come into effect on 24 June 2024.
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ASX admits first Bitcoin ETF
The Australian Securities Exchange (ASX) has announced the admission of its first spot Bitcoin exchange-traded fund (ETF), VanEck Bitcoin ETF (VBTC), marking a significant milestone in the Australian financial market and cryptocurrency industry.
VBTC will be backed by a Bitcoin holding through a US domiciled master fund, ensuring that each unit of the ETF corresponds to a specific amount of Bitcoin. This structure will allow investors to track the price of Bitcoin, providing them with a reliable and clear representation of the value of this cryptocurrency.
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OSFI provides update on data collection modernisation initiative
The Office of the Superintendent of Financial Institutions (OSFI) in Canada has provided an update on its Data Collection Modernisation (DCM) initiative and upcoming opportunities for industry engagement.
Some context
In collaboration with the Bank of Canada and Canada Deposit Insurance Corporation, OSFI launched the DCM initiative in 2023 to modernise data collection for federally regulated financial institutions and pension plans. The objective is to obtain timely, reliable, relevant, and high-quality data through a modern and scalable technology platform.
Since the launch, OSFI has been assessing the current state of regulatory data collection and has initiated a procurement process to acquire the necessary resources and optimal vendor software solution. This will replace the current Regulatory Reporting System (RRS) platform and address user experience issues.
Key takeaways
OSFI has completed the assessment of the current state data and identified thematic opportunities for modernising regulatory data collection. This includes improving data quality and increasing the collection and reporting frequency of granular data.
On the technology front, OSFI has identified a qualified pool of software vendors and system integrators who are participating in the procurement stage to define the requirements for a new solution.
Next steps
OFSI plans to share the details of the data assessment by fall 2024 and invites the industry to engage via industry forums. OFSI also plans to award a contract to a software vendor and a system integrator to initiate planning and implementation by early 2025.
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