EU Regulators Unveil Draft Rules for Crypto-Asset Trade Transparency
In a move aimed at enhancing transparency and oversight in the crypto-asset market, European regulators have published draft rules related to trade transparency, order book records, record-keeping requirements, and classification of white papers.
Background
The draft rules were issued by the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA), as part of their ongoing efforts to implement the Markets in Crypto-Assets Regulation (MiCAR).
Key Requirements
According to the draft rules, crypto-asset service providers will be required to:
- Maintain detailed records of all trades and transactions, including information on counterparties, trade dates, and prices
- Specify the content and format of order book records
- Comply with record-keeping requirements for crypto-asset service providers
Additionally, the draft rules outline the criteria for classifying white papers, which are used to describe the features and functionality of utility tokens. While approval is not required, notification to national competent authorities (NCAs) is necessary.
Implications
The draft rules are part of a broader effort by EU regulators to enhance transparency and oversight in the crypto-asset market, and will likely have significant implications for businesses operating in this space.
Malta’s VFA Act Aligns with MiCAR
In related news, Malta’s Virtual Financial Assets Act (VFA Act) has been amended to align with MiCAR. The amendments were made to:
- Remove references to the VFA Agent and systems auditor
- Introduce a two-stage applicability schedule for new requirements
Updates to Local Law
The changes are part of a broader effort by the Maltese regulator, the Malta Financial Services Authority (MFSA), to integrate MiCAR into local law. The MFSA has also issued guidance on the implementation of MiCAR, including a circular detailing updates to Chapter 3 of the VFA rulebook.
Deadline for VFA Service Provider Applications
The MFSA has announced that it will stop accepting applications under the local VFA regime as of August 1, 2024. Any person wishing to submit an application for the provision of a VFA service must do so by this date.
Transitional Provisions
Finally, the VFA Act includes transitional provisions for pre-MiCAR entities who converted their licence to MiCAR, as outlined in the grandfathering clause. The provision allows these entities to operate under MiCAR until July 1, 2026, depending on the decision of each EU Member State.
Conclusion
Overall, the draft rules and amendments to Malta’s VFA Act are significant developments for the crypto-asset market, and will likely have far-reaching implications for businesses operating in this space.