European Securities and Markets Authority Publishes Call for Evidence on Distributed Ledger Technology Pilot Regime and MiFIR Standards on Transparency and Reporting

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The European Securities and Markets Authority has published a call for evidence on the need to amend existing Regulatory Technical Standards under the EU Markets in Financial Instruments Regulation to accommodate the upcoming distributed ledger technology pilot regime, which is expected to be published in spring 2022 and will begin to apply 9 months after its publication (i.e. the beginning of 2023). Responses to the call for evidence should be submitted by March 4, 2022.

The DLT Pilot Regime was first proposed in 2020 as part of the EU's digital finance strategy, which aims to embrace digital finance in the EU while ensuring that digital transformation is properly regulated. Under the pilot regime, a new DLT Regulation will set out the permissions regime for operators of DLT market infrastructures (namely trading venues and central securities depositories), as well as their operating conditions and the supervisory regime applicable to them.

The call for evidence is seeking input from stakeholders, including, in particular, trading venues, securities settlement systems and entities that are considering to participate in the DLT pilot, on proposed amendments to MiFIR RTS 1 (on equity transparency), RTS 2 (on non-equity transparency), RTS 3 (on the double volume cap and provision of data), and the RTS on data reporting requirements (i.e., RTS 22-25). These RTS cover pre- and post-trade transparency and data reporting requirements, which may need to be amended to apply to financial instruments issued, traded and recorded via DLT. ESMA states that any amendments to the RTS should not increase the regulatory burden for DLT market infrastructures compared to standard financial instruments market infrastructures.

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