The European Securities and Markets Authority ESMA has set out to determine whether EU authorities need to modify existing regulations to facilitate the trading and settlement of tokenized securities. Before launching a pilot system for market infrastructure based on distributed ledger technology (DLT), regulators are seeking comments on the matter.

ESMA collects opinions from stakeholders on the DLT securities pilot system

The European securities regulator ESMA is accepting public comments on potential updates to regulations regarding the implementation of DLT solutions in the market. Authorities must assess whether certain regulatory technical standards (RTS) are established in accordance with the Financial Instruments Market Regulations (Miffel) Needs to be modified to apply to Securities Issuing, trading and recording on DLT.

ESMA pointed out in the “evidence collection” document released this week that the standards discussed are related to trade transparency and data reporting requirements. The document solicits feedback from various stakeholders. These include trading venues, securities settlement systems and entities that plan to operate under its DLT pilot system, as well as other market participants who intend to use DLT market infrastructure??.

The announcement pointed out that the text of the DLT pilot has not yet been finalized, but since the European Parliament and the European Council reached an agreement in November, ESMA believes that it is necessary to start negotiations now. The supervisor explained:

The DLT pilot system is likely to be applied in early 2023, leaving little time for RTS’s evaluation and potential revisions.

The Paris-based regulatory agency will accept and review comments submitted by all parties before March 4, 2022. Based on the feedback provided by market participants, regulators will consider specific revisions to the RTS.

If such changes are deemed necessary, the European Securities and Markets Authority will once again solicit public comments on its recommendations through a consultation document issued before the final draft of the RTS is submitted to the European Commission. The administrative power of Brussels will have the final say on their adoption.

Do you want the EU to revise its regulations on the DLT pilot system for securities trading and settlement? Tell us in the comments section below.

Lubomir Tasef

Lubomir Tassev is a tech-savvy journalist from Eastern Europe. He likes Hitchens’ famous quote: “Being a writer is my nature, not what I do.” In addition to encryption, blockchain and financial technology, international politics and economics Are the other two sources of inspiration.