On 4 January 2022, the European Securities and Markets Authority (ESMA) launched a call for evidence on the Distributed Ledger Technology (DLT) Pilot Regime which aims at developing the trading and settlement for ‘tokenised’ securities. The idea is to understand whether the regulatory technical standards (RTS) developed under Regulation 600/2014/EU (MiFIR) in relation to certain pre- and post-trade transparency and data reporting requirements need to be amended to apply also to securities issued, traded and recorded on DLT.
Even though a final text of the DLT Pilot Regime has not been published yet, a political agreement between the European Parliament and the Council was reached on 24 November 2021. ESMA considers a prior consultation fundamental, as the DLT Pilot Regime is likely to start applying at the beginning of 2023. This means that little time is left for the assessment and potential amendments of the RTS. The deadline for submitting comments is 4 March 2022. The call for evidence highlights, among others, the following points:
• Whilst crypto-assets are one of the major applications of blockchain technology in finance, provisions in existing EU legislation may inhibit the use of DLT. For this reason, the DLT Pilot Regime seeks to create an EU framework that enables markets in crypto assets;
• National competent authorities (NCAs) and ESMA may have a lack of experience when it comes to DLT market infrastructure (DLT MI) and linked issues and challenges. For this reason, ESMA considers having a thorough understanding of the usage of DLT for trading and settlement of the utmost importance;
• ESMA is also assessing whether amendments to the technical standards on data reporting and transparency are necessary for the successful implementation of the DLT Pilot Regime.

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