This final report presents the proposed regulatory technical standards (RTS) for assessing acquisitions of qualifying holdings in issuers of asset-referenced tokens (ARTs) under the MiCAR regulation. The RTS specify the detailed content of information to be submitted for the prudential assessment of these acquisitions, based on five essential criteria such as the acquirer's reputation and financial soundness. This…
This document is the final report of the European Banking Authority (EBA) published in 2024, entitled "Final Report on draft RTS on information for assessment of a proposed acquisition of qualifying holdings in issuers of ARTs under MiCAR". It is a 41-page regulatory standard (only the first 36 pages provided) specifying the detailed content of information to be submitted for the prudential assessment of a proposed acquisition of qualifying holdings in issuers of asset-referenced tokens (ARTs) pursuant to Article 42(4) of Regulation (EU) 2023/1114 (MiCAR). The scope covers direct or indirect acquisitions of qualifying holdings in ART issuers, prudential assessment criteria, information requirements according to the nature of the acquirer (natural person, legal entity, funds, trust, sovereign funds), as well as the modalities of applying the proportionality principle. The document is addressed to potential acquirers, competent authorities under MiCAR, and crypto-asset sector actors in the European Union.
The EBA final report responds to the mandate given by Article 42(4) of Regulation (EU) 2023/1114 (MiCAR) to define regulatory technical standards (RTS) specifying the content of information to be provided when notifying a direct or indirect acquisition of qualifying holdings in ART issuers. This notification is essential to enable competent authorities to conduct a prudential assessment of the proposed acquirer according to five criteria: reputation, professional competence, fitness of managers, financial soundness, compliance with prudential requirements, and absence of increased risk of money laundering or terrorism financing (p. 3). The RTS details information to be provided on identity, reputation, financial soundness, financial and non-financial interests, acquisition strategy, post-acquisition group structure, and legitimate origin of funds, including financing in crypto-assets (p. 3, 10, 24). The proportionality principle is applied by adapting requirements according to the nature of the acquirer, participation threshold (below 20%, between 20% and 50%, above 50%) and mode of acquisition (direct control or multiplication of indirect holdings) (p. 3, 11, 25). Reliefs are provided for acquirers already assessed by the same authority in the last two years or subject to its supervision (p. 3, 28). The report emphasizes the importance of European harmonization to avoid divergences and regulatory arbitrage, aligning requirements with those applicable in the traditional financial sector, notably Commission Delegated Regulation (EU) 2017/1946 (p. 5-6, 31). The document will be submitted to the European Commission, then to Parliament and Council for adoption (p. 4). The main recommendations are to comply with detailed information requirements, ensure continuous data updating, and guarantee compliance with personal data protection rules (p. 8-9).
The MiCAR regulation establishes a regulatory framework for ART issuers, reserving their issuance to authorized entities in the EU. Any direct or indirect acquisition of a qualifying holding in these issuers must be subject to prior notification and prudential assessment by the competent authority (p. 5). The objective is to ensure security, transparency and stability of the crypto-asset market, guaranteeing that acquirers are reputable, competent, financially sound and do not present increased risks of money laundering or terrorism financing (p. 5). The document aims to harmonize at the European level the content of information to be provided, to avoid divergent practices between Member States, which could lead to regulatory arbitrage and market fragmentation (p. 5, 30). It also seeks to ensure consistency with existing standards in the traditional financial sector, notably regarding acquisition of qualifying holdings (p. 5-6). The scope covers direct and indirect acquisitions, different types of acquirers (natural persons, legal entities, funds, trusts, sovereign funds), and participation thresholds (10%, 20%, 50%) (p. 6). Limitations notably concern the consideration of only the first 36 pages of the document and strict compliance with personal data protection rules (p. 34).
1. Prudential assessment criteria: The assessment covers reputation (integrity, absence of criminal or administrative convictions), professional competence (experience in management, financial services, DLT technology and crypto-assets), financial soundness, compliance with prudential requirements, and risk of money laundering or terrorism financing (p. 3, 9-10, 16-17).
2. Information to be provided according to the nature of the acquirer:
- Natural person: full identity, detailed CV, judicial and administrative background, financial situation, financial and non-financial interests, links with politically exposed persons, conflicts of interest (p. 12-18).
- Legal entity: identification, constitutive documents, governance structure, list of managers and beneficial owners, financial information (balance sheets, income statements, annual reports over 3 years), links with shareholders and group entities, conflicts of interest, third-country status (p. 12-21).
- Trusts, alternative investment funds (AIF), UCITS, sovereign funds: specific information on managers, investment policies, restrictions, strategies, and key persons involved (p. 13-16).
3. Participation thresholds and associated information:
- Up to 20%: strategy document, intentions regarding the holding, possible financial support (p. 24-25).
- Between 20% and 50%: additional information on influence exercised, financial policy, strategic development (p. 25-26).
- Above 50%: 3-year business plan detailing strategy, financial projections, impact on governance and organization, internal procedures, IT architecture, intra-group relations (p. 26-28).
4. Indirect acquisition: distinction between control of an existing qualifying holder (full requirements) and indirect holding via multiplication of participations (reduced requirements) (p. 21-22).
5. Acquisition financing: detailed description of funding sources, including asset sales (crypto or others), loans (with information on non-financial lenders), means of fund transfer (including details on crypto wallets, service providers, DLT, smart contracts) (p. 23-24).
6. Proportionality and reliefs: possibility to submit reduced information if the acquirer has been assessed by the same authority in the last 2 years or is subject to its supervision, with a declaration certifying accuracy and currency of information (p. 27-29).
7. Personal data protection: compliance with GDPR, data minimization, limited retention, obligation to inform authorities of any changes (p. 8-9, 34).
8. Regulatory alignment: strong consistency with existing financial sector standards (Commission Delegated Regulation (EU) 2017/1946, sectoral directives), close cooperation with ESMA for harmonization with RTS on acquisitions in crypto-asset service providers (CASPs) (p. 5-6, 31-32).
9. Public consultation: three responses received, general support for the project, minor adjustments for alignment with ESMA and reminder of confidentiality obligations (p. 34-35).
Established facts:
- The lack of harmonization of information to be provided during acquisitions of qualifying holdings in ART issuers creates a risk of regulatory arbitrage and market fragmentation (p. 30).
- The proposed RTS details a comprehensive set of information, adapted according to the nature of the acquirer and participation threshold, enabling a prudential assessment compliant with MiCAR criteria (p. 3, 11, 24).
- The proportionality principle is applied via differentiated requirements and reliefs for acquirers already assessed or supervised (p. 3, 28).
- Cooperation between EBA and ESMA ensures harmonization of RTS in the crypto sector (p. 6, 34).
Hypotheses:
- Taking into account the specificities of crypto-asset financing in the information to be provided allows better detection of money laundering and terrorism financing risks (p. 31).
- Alignment with existing financial sector standards facilitates integration and regulatory consistency (p. 31).
Interpretations:
- The granularity of requested information, although burdensome, is deemed necessary to guarantee the soundness and transparency of acquisitions in this emerging sector (p. 35).
- Differentiation of requirements according to participation thresholds reflects the variation in degree of influence and control exercised by the acquirer (p. 25).
Uncertainties:
- Some questions remain about the exact scope of information to be requested from indirect shareholders identified by multiplication of participations (p. 6).
- The concrete operational impact of these requirements on market actors and authorities remains to be observed after implementation.
The EBA concludes that the implementation of these RTS is essential to ensure a harmonized prudential assessment of acquisitions of qualifying holdings in ART issuers, thus contributing to stability and trust in the crypto-asset market in Europe (p. 3, 30). The report recommends:
- Strict compliance with detailed information requirements according to the nature of the acquirer and participation threshold (p. 12-28).
- Application of the proportionality principle using the provided reliefs when conditions are met (p. 28).
- Ensuring continuous updating of information throughout the assessment period (p. 8).
- Ensuring compliance with personal data protection rules (p. 8-9, 34).
- Continuing cooperation between EBA and ESMA to maintain regulatory harmonization in the crypto sector (p. 6, 34).
The document will be submitted to the European Commission for approval, then to Parliament and Council for final adoption (p. 4).
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