EBA Publishes Final Draft Technical Standards under MiCA

On 7 May 2024, the European Banking Authority (EBA) published three sets of final draft technical standards under the EU Markets in Crypto-Assets Regulation (MiCA). The technical standards relate to (i) the authorization of persons intending to issue ARTs (ARTs), (ii) notifications of intent to acquire a qualifying holding in an issuer of an ART, and (iii) the white-paper approval process for credit institutions issuing ARTs.

RTS/ITS on Authorization of ARTs 

Under Article 16 (1) MiCA, a person may not publicly offer or seek the admission to trading of an ART within the EU unless that person is a credit institution or authorized by the competent authority in their home Member State. Article 18 MiCA lists the information that shall accompany an authorization application.  

The RTS outline the necessary information that issuers must provide when applying for authorization to issue asset-references tokens. This includes detailed disclosures on the business model, internal governance structures, risk management strategies, liquidity provisions, and the qualifications of the management team. These comprehensive requirements enable competent authorities to conduct thorough assessments, ensuring that only well-prepared and transparent entities can enter the market.

The ITS set forth the standard application forms, templates, and procedural guidelines for the authorization process. By standardizing these elements, the EBA aims to streamline the application process, making it more efficient and consistent across different EU jurisdictions. The ITS also clarify the procedures for competent authorities to assess the completeness of applications and request additional information if needed.

In addition to authorization procedures, the RTS specify the criteria for notifying and assessing significant acquisitions in ART issuers. This involves evaluating the reputation, financial soundness, and managerial suitability of the acquirers. The aim is to ensure that acquisitions do not compromise the sound and prudent management of the issuer or pose risks related to money laundering or terrorist financing.

RTS on Acquisition Notification

Under Article 41 (1) MiCA, persons who intend to acquire of a qualifying holding in an issuer of an ART must notify the competent authority before such acquisition takes place. The competent authority is obliged under Article 41 (4) MiCA to perform a written assessment of the proposed acquisition according to Article 42 MiCA and the regulatory technical standards adopted by the EU Commission. 

Article 42 (1) MiCA lists five criteria against which the proposed acquisition must be assessed:

• the reputation of the proposed acquirer;
• the reputation, knowledge, skills and experience of any person who will direct the business of the issuer of the ART as a result of the proposed acquisition;
• the financial soundness of the proposed acquirer, in particular in relation to the type of business envisaged and pursued in respect of the issuer of the ART in which the acquisition is proposed;
• whether the issuer of the ART will be able to comply and continue to comply with the provisions of [Title III MiCA];
• whether there are reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing within the meaning of, respectively, Article 1(3) and (5) of [the EU 5th Anti-Money Laundering Directive] is being or has been committed or attempted, or that the proposed acquisition could increase the risk thereof.

The RTS sets out the information requirements that are necessary for the competent authority to carry out its assessment of the above-mentioned criteria. The information requirements differ based on whether the proposed acquirer is a natural or legal person and the amount of the proposed acquisition. 

RTS on White Paper Approval Process

Under Article 17 (1) MiCA, credit institutions that intend to offer ARTs to the public of admit them to trading must draw up a crypto-asset white paper and have it approved by the competent authority. 

The draft RTS published by the EBA outlines a detailed, multi-step process for the approval of a white paper. The procedure begins with the submission of an application by the credit institution, which must include the white paper and any supporting documentation. The competent authority then acknowledges receipt of the application and proceeds to assess its completeness. If any information is missing, the authority requests additional details from the applicant.

Following the completeness check, the competent authority conducts a substantive assessment of the white paper. This involves evaluating the accuracy, transparency, and comprehensiveness of the information provided, ensuring it meets the regulatory standards set forth in MiCA. During this phase, the competent authority may request further amendments or clarifications from the credit institution.

The draft RTS also define specific timeframes for each stage of the approval process to enhance efficiency and predictability. Moreover, the draft RTS include provisions for coordination between competent authorities and the European Central Bank (ECB) or other relevant central banks.

Next Steps

The draft RTS and ITS will be submitted by 30 June 2024 to the EU 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.