BETA


2020/0267(COD) Digital finance: Pilot regime on distributed ledger technology market infrastructures (DLT)

Progress: Awaiting Parliament's position in 1st reading

RoleCommitteeRapporteurShadows
Lead ECON VAN OVERTVELDT Johan (icon: ECR ECR) POLFJÄRD Jessica (icon: EPP EPP), KAILI Eva (icon: S&D S&D), YON-COURTIN Stéphanie (icon: Renew Renew), URTASUN Ernest (icon: Verts/ALE Verts/ALE), BECK Gunnar (icon: ID ID), MACMANUS Chris (icon: GUE/NGL GUE/NGL)
Committee Opinion ITRE
Committee Opinion IMCO
Committee Opinion LIBE
Lead committee dossier:
Legal Basis:
TFEU 114-p1

Events

2021/09/15
   EP - Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
2021/09/13
   EP - Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
2021/08/05
   EP - Committee report tabled for plenary, 1st reading
Details

The Committee on Economic and Monetary Affairs adopted the report by Johan Van OVERTVEDT (ECR, BE) on the proposal for a regulation of the European Parliament and of the Council on a pilot regime for market infrastructures based on distributed ledger.

The proposed regulation is part of a new package on digital finance. It aims to provide a mechanism for market infrastructures to experiment with the limited use of DLT (distributed ledger technology).

The envisaged pilot regime would temporarily exempt DLT market infrastructures from certain specific requirements imposed by EU financial services legislation that might otherwise prevent them from developing solutions for trading and settling transactions in crypto-assets that qualify as financial instruments, without weakening the existing requirements and safeguards applied to traditional market infrastructures.

The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:

Purpose and scope

The Regulation would establish the requirements for DLT market infrastructures and their operators who are granted specific authorisations to operate. A DLT market infrastructure would be defined as a DLT multilateral trading facility (DLT MTF), a DLT securities settlement system (DLT SSS) or a DLT trading and settlement system (DLT TSS).

Limitations on the financial instruments admitted to trading on or settled by a DLT market infrastructure

Only DLT financial instruments that meet the following conditions could be admitted to trading or listed on a DLT market infrastructure

- shares, the issuer of which has a market capitalisation or a tentative market capitalisation of less than EUR 200 million; or

- convertible bonds, covered bonds, corporate bonds, sovereign bonds and other bonds, with an issuance size of less than EUR 500 million;

- units of exchange-traded funds (ETFs) and units of collective investment undertakings investing in the above-mentioned instruments with an issue volume of less than EUR 500 million.

Operators of a DLT SSS or of a DLT TSS may admit new financial instruments until the total market value of DLT financial instruments recorded in a DLT SSS or in a DLT TSS reaches EUR 5 billion.

In order to allow for competition, while at the same time preserving a level playing field and high standards in terms of investor protection, market integrity and financial stability, new entrants should also be able to access the pilot regime, provided that they ensure compliance with the same requirements as those applicable to authorised investment firms or market operators under Directive 2014/65/EU (MiFID) or those applicable to an authorised CSD under Regulation (EU) No 909/2014, in a manner proportionate to the nature, scale and risks of their business.

Additional requirements for DLT market infrastructures

DLT market infrastructure operators should establish a clear and detailed business plan describing how they intend to offer their services and conduct their business. They would remain at all times fully responsible for the services and activities they carry out under the Regulation, including the operation of the distributed registries deployed.

In addition, operators would have to establish transparent arrangements for investor protection and make available to customers complaint handling mechanisms and compensation or redress procedures in the event of investor detriment caused by serious deficiencies or termination of operations.

The European Securities and Markets Authority (ESMA) could decide, on a case-by-case basis, to require the operator of a DLT market infrastructure to provide additional prudential safeguards in the form of capital or insurance.

Supervision and assessment

ESMA should have a direct supervisory mandate for granting a permission to a DLT market infrastructure and any exemptions across the Union under this Regulation.

In order to ensure effective cooperation and exchange of relevant information, ESMA could consult national competent authorities on the DLT market infrastructure operators authorised in their Member States. When assessing the applications and exemptions, ESMA should seek to ensure financial stability, market integrity, investor protection and fair competition in the single market.

ESMA should publish annual interim reports to enable market participants to better understand the functioning and evolution of markets, and to clarify the application of the pilot regime. It should also provide one or more secure communication channels for reporting breaches of the Regulation.

Lastly, ESMA should provide the Commission with an early stocktaking report no later than three years from the date of entry into force of the Regulation and, if the regime prescribed in this Regulation is not made permanent by modifications to relevant Union financial

services legislation by then, a final report by five years from the entry into application of this Regulation.

Documents
2021/07/13
   EP - Vote in committee, 1st reading
2021/07/13
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
2021/05/25
   EP - Amendments tabled in committee
Documents
2021/05/25
   EP - Amendments tabled in committee
Documents
2021/05/10
   RO_SENATE - Contribution
Documents
2021/04/23
   EDPS - Document attached to the procedure
2021/03/11
   EP - Committee draft report
Documents
2021/02/01
   PT_PARLIAMENT - Contribution
Documents
2020/12/16
   CZ_CHAMBER - Contribution
Documents
2020/11/13
   EP - Committee referral announced in Parliament, 1st reading
2020/10/15
   EP - VAN OVERTVELDT Johan (ECR) appointed as rapporteur in ECON
2020/09/24
   EC - Legislative proposal
Details

PURPOSE: to establish a common EU pilot regime for market infrastructures based on distributed ledger technology (DLT).

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: this proposal is part of the Digital Finance package, a package of measures to further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks. The digital finance package includes a new Strategy on digital finance for the EU financial sector with the aim to ensure that the Union’s financial services legislation is fit for the digital age, and contributes to a future-ready economy that works for the people, including by enabling the use of innovative technologies. The Union has a stated and confirmed policy interest in developing and promoting the uptake of transformative technologies in the financial sector, including blockchain and distributed ledger technology (DLT).

This package also includes a proposal for a proposal on crypto-asset markets, a proposal for digital operational resilience, and a proposal to clarify or amend certain related EU financial services rules.

CONTENT: the Commission seeks to propose a pilot regime for market infrastructures that wish to try to trade and settle transactions in financial instruments in crypto-asset form. The regime follows the ‘sandbox’ approach which allows for temporary derogations from some specific requirements under the Union financial services legislation that could otherwise prevent them from developing solutions for the trading and settlement of transactions in crypto-assets that qualify as financial instruments.

This proposed Regulation on a pilot regime for market infrastructures based on distributed ledger technology seeks to provide legal certainty and flexibility for market participants who wish to operate a DLT market infrastructure by establishing uniform requirements for operating these.

Permissions granted under this Regulation shall allow market participants to operate a DLT market infrastructure and to provide their services across all Member States.

Scope

The proposal establishes operating conditions for DLT market infrastructures, permission to make use of them and the supervision and cooperation of competent authorities and ESMA. It shall apply to market participants (either investment firms, market operators or central securities depositories, CSDs).

Limitations on the transferable securities admitted to trading on or settled by a DLT market infrastructure

The proposal sets out the limitations in terms of DLT transferable securities that can be admitted to trading on, or recorded by, DLT market infrastructures. For shares, the market capitalisation or the tentative market capitalisation of the issuer of DLT transferable securities should be less than EUR 200 million; for public bonds other than sovereign bonds, covered bonds and corporate bonds the limit is EUR 500 million.

DLT market infrastructures shall not admit to trading or record sovereign bonds.

In addition, the total market value of DLT transferable securities recorded by a CSD operating a DLT securities settlement system, or by a DLT MTF where allowed to record such DLT transferable securities, shall not exceed EUR 2.5 billion.

Additional requirements on DLT market infrastructures

Additional requirements are laid down to address the novel forms of risks raised using DLT. DLT market infrastructures must provide all members, participants, clients and investors with clear and unambiguous information on how they carry out their functions, services and activities.

DLT market infrastructures must also ensure that overall IT and cyber arrangements related to the use of DLT are adequate. Where the business model of a DLT market infrastructure involves the safekeeping of clients’ funds or DLT transferable securities, or the means to access these, they must have adequate arrangements to safeguard such assets.

Cooperation between operators of DLT market infrastructures, competent authorities and ESMA

It is proposed that DLT market infrastructures must inform competent authorities and ESMA of, for example: proposed material changes to their business plan including critical staff, evidence of hacking, fraud or other serious malpractice, material changes in the information contained in the initial application, technical or operational difficulties in delivering activities or services covered under the permission and any risks to investor protection, market integrity or financial stability that may have arisen and were not foreseen at the time the permission was given.

Where notified of such information, the competent authority may request the DLT market infrastructure to submit an application for another permission, exemption or take any corrective measure it deems appropriate.

In addition, the DLT market infrastructure shall produce and submit a report to the competent authority and ESMA detailing all of the information above including potential difficulties in applying EU financial services legislation.

Reporting

At the latest after a five-year period, ESMA shall produce a detailed report on the pilot regime to the Commission. On the basis of ESMA’s assessment, the Commission will produce a report including a cost-benefit analysis on whether the pilot regime should be maintained as it is or amended, whether it should be extended to new categories of financial instruments, whether targeted amendments to EU legislation should be considered to enable a widespread use of DLT and whether the pilot regime should be terminated.

Budgetary implications

This proposal holds implications in terms of costs and administrative burden for national competent authorities and the European Securities and Markets Authority. The magnitude and distribution of these costs will depend on the precise requirements placed on DLT market infrastructures and the related supervisory and monitoring tasks. The estimated supervisory costs for each Member State (including staff, training, IT infrastructure) can range from EUR 150 000 to EUR 250 000 per year per DLT market infrastructure.

For ESMA, the estimated cost in relation to review and coordination are estimated at EUR 150 000-EUR 300 000 in total. These costs shall be covered by ESMA’s operating budget, which shall be increased.

In addition, ESMA is expected to maintain a register of DLT market infrastructures in operation, the costs related to this are considered to be covered by the costs relating to the maintenance of the register.

2020/09/24
   EC - Document attached to the procedure
2020/09/24
   EC - Document attached to the procedure
2020/09/24
   EC - Document attached to the procedure

Documents

AmendmentsDossier
365 2020/0267(COD)
2021/05/26 ECON 365 amendments...
source: 693.549

History

(these mark the time of scraping, not the official date of the change)

committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
docs/8
date
2021-08-05T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/A-9-2021-0240_EN.html title: A9-0240/2021
type
Committee report tabled for plenary, 1st reading/single reading
body
EP
events/3/summary
  • The Committee on Economic and Monetary Affairs adopted the report by Johan Van OVERTVEDT (ECR, BE) on the proposal for a regulation of the European Parliament and of the Council on a pilot regime for market infrastructures based on distributed ledger.
  • The proposed regulation is part of a new package on digital finance. It aims to provide a mechanism for market infrastructures to experiment with the limited use of DLT (distributed ledger technology).
  • The envisaged pilot regime would temporarily exempt DLT market infrastructures from certain specific requirements imposed by EU financial services legislation that might otherwise prevent them from developing solutions for trading and settling transactions in crypto-assets that qualify as financial instruments, without weakening the existing requirements and safeguards applied to traditional market infrastructures.
  • The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:
  • Purpose and scope
  • The Regulation would establish the requirements for DLT market infrastructures and their operators who are granted specific authorisations to operate. A DLT market infrastructure would be defined as a DLT multilateral trading facility (DLT MTF), a DLT securities settlement system (DLT SSS) or a DLT trading and settlement system (DLT TSS).
  • Limitations on the financial instruments admitted to trading on or settled by a DLT market infrastructure
  • Only DLT financial instruments that meet the following conditions could be admitted to trading or listed on a DLT market infrastructure
  • - shares, the issuer of which has a market capitalisation or a tentative market capitalisation of less than EUR 200 million; or
  • - convertible bonds, covered bonds, corporate bonds, sovereign bonds and other bonds, with an issuance size of less than EUR 500 million;
  • - units of exchange-traded funds (ETFs) and units of collective investment undertakings investing in the above-mentioned instruments with an issue volume of less than EUR 500 million.
  • Operators of a DLT SSS or of a DLT TSS may admit new financial instruments until the total market value of DLT financial instruments recorded in a DLT SSS or in a DLT TSS reaches EUR 5 billion.
  • In order to allow for competition, while at the same time preserving a level playing field and high standards in terms of investor protection, market integrity and financial stability, new entrants should also be able to access the pilot regime, provided that they ensure compliance with the same requirements as those applicable to authorised investment firms or market operators under Directive 2014/65/EU (MiFID) or those applicable to an authorised CSD under Regulation (EU) No 909/2014, in a manner proportionate to the nature, scale and risks of their business.
  • Additional requirements for DLT market infrastructures
  • DLT market infrastructure operators should establish a clear and detailed business plan describing how they intend to offer their services and conduct their business. They would remain at all times fully responsible for the services and activities they carry out under the Regulation, including the operation of the distributed registries deployed.
  • In addition, operators would have to establish transparent arrangements for investor protection and make available to customers complaint handling mechanisms and compensation or redress procedures in the event of investor detriment caused by serious deficiencies or termination of operations.
  • The European Securities and Markets Authority (ESMA) could decide, on a case-by-case basis, to require the operator of a DLT market infrastructure to provide additional prudential safeguards in the form of capital or insurance.
  • Supervision and assessment
  • ESMA should have a direct supervisory mandate for granting a permission to a DLT market infrastructure and any exemptions across the Union under this Regulation.
  • In order to ensure effective cooperation and exchange of relevant information, ESMA could consult national competent authorities on the DLT market infrastructure operators authorised in their Member States. When assessing the applications and exemptions, ESMA should seek to ensure financial stability, market integrity, investor protection and fair competition in the single market.
  • ESMA should publish annual interim reports to enable market participants to better understand the functioning and evolution of markets, and to clarify the application of the pilot regime. It should also provide one or more secure communication channels for reporting breaches of the Regulation.
  • Lastly, ESMA should provide the Commission with an early stocktaking report no later than three years from the date of entry into force of the Regulation and, if the regime prescribed in this Regulation is not made permanent by modifications to relevant Union financial
  • services legislation by then, a final report by five years from the entry into application of this Regulation.
events/4
date
2021-09-13T00:00:00
type
Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
body
EP
events/5
date
2021-09-15T00:00:00
type
Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
body
EP
docs/8
date
2021-08-05T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/A-9-2021-0240_EN.html title: A9-0240/2021
type
Committee report tabled for plenary, 1st reading/single reading
body
EP
events/3/docs
  • url: https://www.europarl.europa.eu/doceo/document/A-9-2021-0240_EN.html title: A9-0240/2021
events/3/date
Old
2021-07-21T00:00:00
New
2021-08-05T00:00:00
events/3
date
2021-07-21T00:00:00
type
Committee report tabled for plenary, 1st reading
body
EP
procedure/stage_reached
Old
Awaiting committee decision
New
Awaiting Parliament's position in 1st reading
events/1
date
2021-07-13T00:00:00
type
Vote in committee, 1st reading
body
EP
events/2
date
2021-07-13T00:00:00
type
Committee decision to open interinstitutional negotiations with report adopted in committee
body
EP
forecasts
  • date: 2021-07-13T00:00:00 title: Vote scheduled in committee, 2nd reading
procedure/Other legal basis
Rules of Procedure EP 159
forecasts
  • date: 2021-07-13T00:00:00 title: Vote scheduled in committee, 2nd reading
docs/0
date
2020-09-24T00:00:00
docs
summary
type
Legislative proposal
body
EC
docs/4
date
2021-05-25T00:00:00
docs
title: PE692.980
type
Amendments tabled in committee
body
EP
docs/5
date
2021-05-25T00:00:00
docs
title: PE693.549
type
Amendments tabled in committee
body
EP
docs/5
date
2021-04-23T00:00:00
docs
type
Document attached to the procedure
body
EDPS
docs/6
date
2021-05-25T00:00:00
docs
title: PE692.980
type
Amendments tabled in committee
body
EP
docs/6/docs/0/url
https://www.europarl.europa.eu/doceo/document/ECON-AM-692980_EN.html
docs/7
date
2021-05-25T00:00:00
docs
title: PE693.549
type
Amendments tabled in committee
body
EP
docs/7/docs/0/url
https://www.europarl.europa.eu/doceo/document/ECON-AM-693549_EN.html
events/0
date
2020-09-24T00:00:00
type
Legislative proposal published
body
EC
docs
summary
docs/7
date
2021-05-10T00:00:00
docs
url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2020)0594 title: COM(2020)0594
type
Contribution
body
RO_SENATE
docs/4
date
2021-05-21T00:00:00
docs
title: PE693.549
type
Amendments tabled in committee
body
EP
docs/5
date
2021-05-21T00:00:00
docs
title: PE693.549
type
Amendments tabled in committee
body
EP
docs/5/date
Old
2021-05-21T00:00:00
New
2021-05-25T00:00:00
docs/4
date
2021-05-21T00:00:00
docs
title: PE692.980
type
Amendments tabled in committee
body
EP
docs/5
date
2021-05-21T00:00:00
docs
title: PE692.980
type
Amendments tabled in committee
body
EP
docs/5/date
Old
2021-05-21T00:00:00
New
2021-05-25T00:00:00
docs/4
date
2021-05-21T00:00:00
docs
title: PE692.980
type
Amendments tabled in committee
body
EP
docs/5
date
2021-05-21T00:00:00
docs
title: PE693.549
type
Amendments tabled in committee
body
EP
events/1/body
EP
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
docs/0
date
2020-09-24T00:00:00
docs
summary
type
Legislative proposal
body
EC
events/0
date
2020-09-24T00:00:00
type
Legislative proposal published
body
EC
docs
summary
procedure/title
Old
Pilot regime for market infrastructures based on distributed ledger technology
New
Digital finance: Pilot regime on distributed ledger technology market infrastructures (DLT)
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
docs/0
date
2020-09-24T00:00:00
docs
summary
type
Legislative proposal
body
EC
docs/3
date
2021-03-11T00:00:00
docs
url: https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE689.571 title: PE689.571
type
Committee draft report
body
EP
docs/4
date
2021-03-11T00:00:00
docs
url: https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE689.571 title: PE689.571
type
Committee draft report
body
EP
docs/4/docs/0/url
Old
https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE689.571
New
https://www.europarl.europa.eu/doceo/document/ECON-PR-689571_EN.html
events/0
date
2020-11-13T00:00:00
type
Committee referral announced in Parliament, 1st reading
events/0
date
2020-09-24T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/1
date
2020-11-13T00:00:00
type
Committee referral announced in Parliament, 1st reading/single reading
body
EP
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
docs/3/docs/0/url
https://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE689.571
docs/3
date
2021-03-11T00:00:00
docs
title: PE689.571
type
Committee draft report
body
EP
docs/5
date
2021-02-01T00:00:00
docs
url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2020)0594 title: COM(2020)0594
type
Contribution
body
PT_PARLIAMENT
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ??? abbr: Unknown Group
shadows
committees/0/shadows/5
name
MACMANUS Chris
group
GUE/NGL
abbr
Confederal Group of the European United Left
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ??? abbr: Unknown Group
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ECR - European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ECR - European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ??? abbr: Unknown Group
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: ??? abbr: Unknown Group
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
docs/3
date
2020-12-16T00:00:00
docs
url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2020)0594 title: COM(2020)0594
type
Contribution
body
CZ_CHAMBER
procedure/Legislative priorities
  • title: Joint Declaration 2021 url: https://oeil.secure.europarl.europa.eu/oeil/popups/thematicnote.do?id=2066000&l=en
commission
  • body: EC dg: Financial Stability, Financial Services and Capital Markets Union commissioner: MCGUINNESS Mairead
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
events/1
date
2020-11-13T00:00:00
type
Committee referral announced in Parliament, 1st reading/single reading
body
EP
procedure/dossier_of_the_committee
  • ECON/9/04249
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
shadows
otherinst
  • name: European Economic and Social Committee
procedure/other_consulted_institutions
European Economic and Social Committee
committees/0/rapporteur
  • name: VAN OVERTVELDT Johan date: 2020-10-15T00:00:00 group: European Conservatives and Reformists Group abbr: ECR
committees/2/opinion
False
committees/0/shadows/1
name
YON-COURTIN Stéphanie
group
Renew Europe group
abbr
Renew
committees/0/shadows/0
name
POLFJÄRD Jessica
group
Group of European People's Party
abbr
EPP
committees/1/opinion
False
committees/3/opinion
False
committees/0/shadows
  • name: KRAH Maximilian group: Identity and Democracy abbr: ID
docs/0/docs/0
url
https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=SECfinal&an_doc=2020&nu_doc=0308
title
EUR-Lex
docs/0
date
2020-09-24T00:00:00
docs
type
Legislative proposal
body
EC
events/0/summary
  • PURPOSE: to establish a common EU pilot regime for market infrastructures based on distributed ledger technology (DLT).
  • PROPOSED ACT: Regulation of the European Parliament and of the Council.
  • ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.
  • BACKGROUND: this proposal is part of the Digital Finance package, a package of measures to further enable and support the potential of digital finance in terms of innovation and competition while mitigating the risks. The digital finance package includes a new Strategy on digital finance for the EU financial sector with the aim to ensure that the Union’s financial services legislation is fit for the digital age, and contributes to a future-ready economy that works for the people, including by enabling the use of innovative technologies. The Union has a stated and confirmed policy interest in developing and promoting the uptake of transformative technologies in the financial sector, including blockchain and distributed ledger technology (DLT).
  • This package also includes a proposal for a proposal on crypto-asset markets, a proposal for digital operational resilience, and a proposal to clarify or amend certain related EU financial services rules.
  • CONTENT: the Commission seeks to propose a pilot regime for market infrastructures that wish to try to trade and settle transactions in financial instruments in crypto-asset form. The regime follows the ‘sandbox’ approach which allows for temporary derogations from some specific requirements under the Union financial services legislation that could otherwise prevent them from developing solutions for the trading and settlement of transactions in crypto-assets that qualify as financial instruments.
  • This proposed Regulation on a pilot regime for market infrastructures based on distributed ledger technology seeks to provide legal certainty and flexibility for market participants who wish to operate a DLT market infrastructure by establishing uniform requirements for operating these.
  • Permissions granted under this Regulation shall allow market participants to operate a DLT market infrastructure and to provide their services across all Member States.
  • Scope
  • The proposal establishes operating conditions for DLT market infrastructures, permission to make use of them and the supervision and cooperation of competent authorities and ESMA. It shall apply to market participants (either investment firms, market operators or central securities depositories, CSDs).
  • Limitations on the transferable securities admitted to trading on or settled by a DLT market infrastructure
  • The proposal sets out the limitations in terms of DLT transferable securities that can be admitted to trading on, or recorded by, DLT market infrastructures. For shares, the market capitalisation or the tentative market capitalisation of the issuer of DLT transferable securities should be less than EUR 200 million; for public bonds other than sovereign bonds, covered bonds and corporate bonds the limit is EUR 500 million.
  • DLT market infrastructures shall not admit to trading or record sovereign bonds.
  • In addition, the total market value of DLT transferable securities recorded by a CSD operating a DLT securities settlement system, or by a DLT MTF where allowed to record such DLT transferable securities, shall not exceed EUR 2.5 billion.
  • Additional requirements on DLT market infrastructures
  • Additional requirements are laid down to address the novel forms of risks raised using DLT. DLT market infrastructures must provide all members, participants, clients and investors with clear and unambiguous information on how they carry out their functions, services and activities.
  • DLT market infrastructures must also ensure that overall IT and cyber arrangements related to the use of DLT are adequate. Where the business model of a DLT market infrastructure involves the safekeeping of clients’ funds or DLT transferable securities, or the means to access these, they must have adequate arrangements to safeguard such assets.
  • Cooperation between operators of DLT market infrastructures, competent authorities and ESMA
  • It is proposed that DLT market infrastructures must inform competent authorities and ESMA of, for example: proposed material changes to their business plan including critical staff, evidence of hacking, fraud or other serious malpractice, material changes in the information contained in the initial application, technical or operational difficulties in delivering activities or services covered under the permission and any risks to investor protection, market integrity or financial stability that may have arisen and were not foreseen at the time the permission was given.
  • Where notified of such information, the competent authority may request the DLT market infrastructure to submit an application for another permission, exemption or take any corrective measure it deems appropriate.
  • In addition, the DLT market infrastructure shall produce and submit a report to the competent authority and ESMA detailing all of the information above including potential difficulties in applying EU financial services legislation.
  • Reporting
  • At the latest after a five-year period, ESMA shall produce a detailed report on the pilot regime to the Commission. On the basis of ESMA’s assessment, the Commission will produce a report including a cost-benefit analysis on whether the pilot regime should be maintained as it is or amended, whether it should be extended to new categories of financial instruments, whether targeted amendments to EU legislation should be considered to enable a widespread use of DLT and whether the pilot regime should be terminated.
  • Budgetary implications
  • This proposal holds implications in terms of costs and administrative burden for national competent authorities and the European Securities and Markets Authority. The magnitude and distribution of these costs will depend on the precise requirements placed on DLT market infrastructures and the related supervisory and monitoring tasks. The estimated supervisory costs for each Member State (including staff, training, IT infrastructure) can range from EUR 150 000 to EUR 250 000 per year per DLT market infrastructure.
  • For ESMA, the estimated cost in relation to review and coordination are estimated at EUR 150 000-EUR 300 000 in total. These costs shall be covered by ESMA’s operating budget, which shall be increased.
  • In addition, ESMA is expected to maintain a register of DLT market infrastructures in operation, the costs related to this are considered to be covered by the costs relating to the maintenance of the register.