The EBA consults on draft technical standards specifying the requirements for policies and procedures on conflicts of interest for issuers of ARTs under the Markets in Crypto-Assets Regulation

The European Banking Authority (EBA) today published a Consultation Paper on draft regulatory technical standards (RTS) specifying the requirements for policies and procedures on conflicts of interest for issuers of asset-referenced tokens (ARTs) under the Markets in Crypto-Assets Regulation (MiCAR). These draft RTS aim at strengthening the management of conflicts of interest by issuers of ARTs and ensure convergence of requirements across the European Union.

Issuers of ARTs shall implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest.

The conflicts of interest policies and procedures should ensure that issuers of ARTs consider all the circumstances which may or may be perceived to influence or affect their ability or the ability of their connected parties to take impartial and objective decisions.

Against this backdrop, the draft RTS require issuers to pay particular attention to conflicts of interest that could arise in relation to the reserve of assets. Furthermore, they encompass specific provisions related to personal transactions and also specify that the remuneration procedures, policies and arrangements of the issuer should not create conflicts of interest.

The draft RTS underline the key role of the issuers’ management bodies, who are responsible to define and adopt the conflicts of interest policies and procedures. Finally, they set out the content of the disclosure which the issuers of ARTs should make available to the public in the relevant languages on their websites.

This publication is part of the third batch of MiCAR policy products.

Consultation process

Comments to the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page. The deadline for the submission of comments is 7 March 2024.

The EBA will hold a virtual public hearing on the consultation paper on 11 January from 9.30 to 13.00 CET. The EBA invites interested stakeholders to register using this link by 9 January 2024 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis and background

Article 32(1) of Regulation (EU) 2023/1114 on Markets in Crypto-assets requires issuers of ARTs to implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest.

The EBA has developed these draft RTS in accordance Article 32(5) of Regulation (EU) 2023/1114 which mandates the Authority to specify the requirements for the conflicts of interest policies and procedures for issuers of asset-referenced tokens as well as the details and methodology for the content of the disclosure.

The conflicts of interest concerned are the ones that could arise between the issuers of ARTs and a defined list of connected parties as well as between the issuers of ARTs and the holders of ARTs.

The mandate has been elaborated in close cooperation with the European Securities and Markets Authority (ESMA), who is mandated to develop a similar RTS for crypto-asset service providers (CASPs) under Article 72(5) of that Regulation. The present draft RTS on CoI for issuers of ARTs is closely aligned with the RTS on CoI for CASPs to provide for convergence of the requirements. Some differences nevertheless exist, which are justified by the different activities involved.

When developing these RTS, the EBA has taken into account the framework on CoI in other Union legislative acts on financial services, including Directive 2014/65/EU (MIFID) and Directive 2013/36/EU (CRD). The EBA has also drawn on the provisions of the EBA’s Guidelines on internal governance under the IFD (Directive 2019/2034) and the Guidelines on outsourcing arrangements.