The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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Law Commission consults on reforming private international law for digital assets
5 June 2025
The UK Law Commission has published a consultation on reforms to private international law necessitated by emerging technologies such as decentralised ledger technology (DLT). The Law Commissions state that their project has a particular focus on crypto-tokens, electronic bills of lading and electronic bills of exchange because these assets are prevalent in market practice while also posing novel theoretical challenges to the methods by which issues of private international law have traditionally been resolved. The consultation focuses primarily on wholly decentralised applications of DLT. Among other things, the Law Commission proposes:
- To create a new free-standing information order to help claimants who have lost crypto-tokens through fraud or hacking, obtain information about the perpetrators or the whereabouts of their tokens without having to go through the existing gateways.
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FCA consults on stablecoin issuance and custody of cryptoassets
28 May 2025
The UK Financial Conduct Authority (FCA) has published consultation paper CP25/14 (CP) on stablecoin issuance and cryptoasset custody, accompanied by an updated webpage. This follows the FCA's discussion paper published in November 2023, which outlines the proposed approach to regulating stablecoins. This new CP is part of the FCA's roadmap for crypto regulation and is intended to be read alongside CP25/15, which sets out the proposed prudential regime for cryptoasset firms (and which we discuss here). In CP25/14, the FCA has proposed rules and guidance for the issuance of qualifying stablecoins and the safeguarding of qualifying cryptoassets, including stablecoins. These activities are expected to become regulated activities under the HM Treasury's draft legislation, the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025 subject to its finalisation.
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FCA consults on proposed prudential regime for cryptoasset firms
28 May 2025
The UK Financial Conduct Authority (FCA) has published consultation paper CP25/15 on its proposed prudential regime for cryptoasset firms, also accompanied by an updated webpage. This is intended to be read together with CP25/14 on stablecoin issuance and cryptoasset custody, which we discuss here. In this consultation paper, the FCA has proposed prudential rules and guidance for cryptoasset firms, including those issuing qualifying stablecoins and safeguarding qualifying cryptoassets, including stablecoins. The proposals introduce a new prudential regime to be integrated through two new sourcebooks: (i) COREPRU which will initially apply to firms carrying on regulated cryptoasset activities; and (ii) CRYPTOPRU, which will contain other sector-specific requirements for firms doing regulated cryptoasset activities, with these firms referred to as CRYPTOPRU firms.
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IOSCO statement on the role of platform providers and combatting online harm
21 May 2025
The International Organization of Securities Commissions (IOSCO) has issued a statement calling for platform providers to take stronger action against rising investment fraud, driven by increased retail investor activity on digital platforms. It encourages platform providers to leverage the IOSCO International Securities and Commodities Alerts Network (I-SCAN)—a database launched in March that identifies unlicensed firms or those engaging in illegal activities—to block, warn against or remove illegal investment offerings from their platforms. In the statement, IOSCO has also highlighted effective measures used in some jurisdictions to combat online harm involving financial misconduct, including due diligence on unauthorised offerings, rigorous enforcement of compliance with terms of service, strong processes for detecting scams and proactive engagement with financial regulators and government authorities, including referrals of fraudulent activity. -
EBA 2024 annual report on Work Programme Achievements – Part 1
20 May 2025
The European Banking Authority (EBA) has published part 1 of its 2024 annual report, with a press release, reflecting on key regulatory and supervisory achievements under its work programme over the past year. These include: (i) progress in the implementation of the Basel III reforms; (ii) the further integration of ESG considerations into regulatory frameworks, via the issuance of guidelines and reports on ESG risks, greenwashing and scenario analysis; (iii) the assessment of financial stability amid high interest rates and geopolitical uncertainties, supported by two risk assessment reports; (iv) the enhancement of regulatory data infrastructure through the EUCLID platform; (v) the development of oversight and supervisory capacity for firms subject to the EU Digital Operational Resilience Act (DORA) and the EU Markets in Crypto-Assets Regulation (MiCAR); and (vi) an enhanced focus on innovation and consumers (including access to financial services) while preparing for the transition to the new anti-money laundering and counter-terrorist financing (AML/CFT) framework. -
UK Government advances BNPL Regulation
19 May 2025
HM Treasury (HMT) has published a response to its 2024 consultation on regulating Buy-Now, Pay-Later (BNPL) products and laid the draft secondary legislation (Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025), to implement the proposed regime before Parliament. The consultation response is accompanied by an updated webpage and press release. The proposed regulatory framework aims to bring BNPL products under the UK Financial Conduct Authority's (FCA) oversight, ensuring consumers receive clear information, undergo affordability checks, have access to the Financial Ombudsman Service and benefit from the protections of section 75 of the Consumer Credit Act (CCA)—which imposes liability upon a creditor for breaches by a supplier—should something go wrong with their purchases.
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IOSCO publishes final reports on finfluencers, online imitative trading practices and digital engagement practices
19 May 2025
The International Organization of Securities Commissions (IOSCO) has published final reports on finfluencers, online imitative trading practices and digital engagement practices, accompanied by a press release. These reports are part of IOSCO's Roadmap for Retail Investor Online Safety to enhance retail investor protection from fraud, excessive risk taking and misinformation, in the digital age.
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Property (Digital Assets etc) Bill passes to House of Commons
15 May 2025
The UK Property (Digital Assets etc) Bill has completed its third reading in the House of Lords with no further amendments and passed to the House of Commons for consideration. The Bill will give effect to recommendations of the Law Commission to confirm in statute that a thing that is digital or electronic in nature is not prevented from being personal property. The Bill had its first reading in the House of Commons on 12 May and it has now been referred to a Second Reading Committee.Topic : FinTech -
BoE speech on the digitalisation of money and assets: proposed stablecoin regulatory framework
6 May 2025
The Bank of England (BoE) has published a speech by Sarah Breeden, Deputy Governor for Financial Stability, at the Point Zero Forum. The subject of the speech was the digitalisation of money and assets, and in particular the BoE's focus on interoperability. In terms of general commentary, Ms Breeden highlighted the need to collaborate closely with international partners to ensure safe innovation and support for firms with cross-border transactions. She also emphasised the importance of enabling users to switch seamlessly between different forms of money and across asset classes. To drive interoperability, harmonised technical standards and working with the public sector is needed to understand further how to integrate these new, digital forms of assets and money into the wider financial system.
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FCA discussion paper on regulating cryptoasset activities
2 May 2025
The UK Financial Conduct Authority (FCA) has published a discussion paper (DP25/1) on proposals for regulating cryptoasset activities, with a new webpage and press release. The FCA is seeking to develop a safe, competitive and sustainable crypto sector in the UK that enables innovation and is underpinned by market integrity, in light of the increasing popularity of cryptoassets with UK consumers. The proposals cover the following areas being brought within the FCA's regulatory remit, in line with the draft statutory instrument (SI) and policy note published previously:- Cryptoasset trading platform. These are entities that will be authorised to operate a qualifying cryptoasset trading platform. The proposed policy has been informed by the current rules and obligations applied to trading venues in traditional financial markets.
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ESMA report on the quality and use of data
30 April 2025
The European Securities and Markets Authority (ESMA) has published its 2024 report, along with a press release, on the quality and use of data, showcasing significant increase in data use by authorities. The report covers datasets from the European Market Infrastructure Regulation (648/2012) (EMIR), the Securities Financing Transactions Regulation ((EU) 2015/2365) (SFTR), the Markets in Financial Instruments Regulation (600/2014) (MiFIR), the Securitisation Regulation (2017/2402/EU), the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and the Money Market Funds Regulation ((EU) 2017/1131) (MMF Regulation). This edition also expands the scope to include the European Single Electronic Format (ESEF) data and short-selling data. The report is divided into different sections.
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ESMA final guidelines on preventing and detecting market abuse under MiCAR
29 April 2025
The European Securities and Markets Authority (ESMA) has published its final report on the guidelines on supervisory practices for National Competent Authorities (NCAs) to prevent and detect market abuse under the Market in Crypto Assets Regulation (MiCAR), together with a press release. The guidelines are based on Article 92(3) of MiCAR and outline general principles for supervisory practices, drawing on the experience gained under the Market Abuse Regulation. They require supervisory activity to be risk-based and proportionate, aiming for NCAs to foster a common supervisory culture specific to cryptoassets through open dialogue with the industry and collaboration among other NCAs. The guidelines also consider the specific features of crypto trading, such as its cross-border nature and the intensive use of social media. The guidelines will be translated into all EU languages and published by ESMA, becoming effective three months later. ESMA advises NCAs to begin implementing the principles immediately. Competent authorities must notify ESMA within two months of the guidelines being published in all EU languages, on whether they (i) comply, (ii) do not comply, but intend to comply or (iii) do not comply and do not intend to comply with the guidelines.Topic : FinTech -
EC adopts RTS on Market Abuse under MiCAR
29 April 2025
The European Commission (EC) has adopted a Delegated Regulation supplementing Regulation (EU) 2023/1114 on markets in cryptoassets (MiCAR), with regard to regulatory technical standards (RTS) specifying the arrangements, systems and procedures for persons to prevent, detect and report market abuse, the templates to be used for reporting suspected market abuse and the coordination procedures between competent authorities for the detection and sanctioning of market abuse in cross-border market abuse situations. Article 92(1) of MiCAR mandates that persons professionally arranging or executing transactions (PPAETs) in cryptoassets must have effective arrangements, systems and procedures to prevent and detect market abuse. These persons are required to report any reasonable suspicion of market abuse to the competent authority. This includes suspicions regarding an order or transaction, as well as other aspects of the functioning of the distributed ledger technology, where there may be indications that market abuse has been committed, is being committed or is likely to be committed. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. The Delegated Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union. -
HM Treasury publishes draft order for cryptoasset regulation
29 April 2025
The HM Treasury (HMT) has published a draft of The Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, together with an accompanying policy note. The policy note explains that the draft statutory instrument:- Amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ("the RAO") to (i) define "qualifying cryptoassets" and "qualifying stablecoin", and classify them as specified investments under the Financial Services and Markets Act 2000 ("FSMA"); and (ii) specify certain activities related to these assets as regulated activities, such that persons carrying on those activities need to be authorised for that activity by the FCA.
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EBA draft RTS for CASPS appointing a central contact point under MLD4
25 April 2025
The European Banking Authority (EBA) has issued its final report on draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2018/1108, on the criteria for the appointment of central contact points for electronic money issuers and payment service providers and with rules on their functions under Article 45(10) of Directive (EU) 2015/849 (MLD4). The draft RTS extend the amended Delegated Regulation to define when cryptoasset service providers (CASPs) must appoint a central contact point. A central point contact can help to ensure compliance with local Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) obligations in cases where a CASP authorised in one EU Member State is providing services to another EU member state. The RTS set out: (i) the conditions under which CASPs should appoint a central contact point; and (ii) the roles and responsibilities of that central contact point. The draft RTS will be submitted to the Commission for endorsement, following which it will be put to the European Parliament and the Council for scrutiny, before being published in the Official Journal of the European Union. -
UK 2025 Regulatory Initiatives Grid published
14 April 2025
The Financial Services Regulatory Initiatives Forum (the Forum) has published the Regulatory Initiatives Forum Grid (the Grid), with the UK Financial Conduct Authority (FCA) also updating its webpage. The previous Grid was due to be published in May 2024 but was postponed due to the General Election, meaning the Forum published only an interim update in October 2024.
The 2025 Grid sets out the regulatory pipeline for the next 24 months and reflects the reprioritisation that has taken place since the new government came into power. Notable initiatives include:- motor finance commission review: the FCA intends to confirm, within six weeks of the Supreme Court's decision on past use of discretionary commission arrangements by motor finance firms, whether it will propose a redress scheme;
- liquidity risk management in funds: the FCA will consult on refined proposals regarding liquidity risk management in funds to implement FSB and IOSCO guidelines;
- Consumer Composite Investments (CCI) Regulation: the FCA published a second consultation paper on the new CCI regime on 16 April (see our update) and plans to issue a Policy Statement with final rules in late 2025;
Topics : Client Asset Protection, Conduct and Culture, Consumer / Retail, Financial Crime and Sanctions, Financial Market Infrastructure, FinTech, Fund Regulation, MiFID II, Operational Resilience, Other Developments, Payment Services and Payment Systems, Prudential Regulation, Recovery and Resolution, Securities -
FCA findings on multi-firm review of trading apps
11 April 2025
The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings from its multi-firm review of trading apps, together with a press release. The FCA notes that this is a growing sector allowing more retail investors easier access to a wider range of investments which can help to improve financial lives. Some trading apps, though, offer high-risk investments that were traditionally aimed at wholesale markets. The FCA's review made a series of findings, including on:- business models: trading app firms operate in various ways. The FCA stresses that regulated firms must ensure they understand the Handbook's requirements for manufacturers and distributors, regardless of their business model, and that firms with overseas affiliates must clearly inform customers that their trading agreement is with the overseas entity and disclose any potential loss of asset protection.
- target markets: firms are likely to be both manufacturers of a trading app and distributors of products sold on it, and therefore should consider the relevant rules under PRIN 2A.3 and PROD 3 on the need to identify a target market for the products and services they manufacture and distribute. The FCA found some firms had not specified their target market at a sufficiently granular level and, in some cases, offered lower-risk and less complex products alongside more complex or high-risk ones.
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BoE reports on digital pound developments and implementation
10 April 2025
The Bank of England (BoE) has published a series of documents regarding its work on implementing the digital pound. The Digital Pound Experiment Report on Offline Payments assesses the technical feasibility of implementing an offline payment functionality for a digital pound to ensure that the digital pound can be used without an internet connection, enhancing its accessibility and resilience. While it might be technically feasible, there are trade-offs, particularly around user experience and preventing double spending and counterfeiting, that make implementing it challenging. No final decision has been made yet on whether an offline payment functionality will be implemented. The minutes of the CBDC Engagement Forum (November 2024) sets out continued stakeholder discussions on the progress of the digital pound, highlighting the benefits for consumers and merchants, such as innovation and cost efficiency, but also the challenges, including ensuring strong performance at all levels of payment volume, operational costs and security and network connectivity issues. The Intermediary Roles and Scheme Rulebook Design Note outlines the roles and responsibilities of digital pound intermediaries and a preliminary conceptual framework for a digital pound rulebook (or similar document) to support the proper management of the digital pound if launched.Topic : FinTech -
Further suite of technical standards supplementing MiCAR published in the OJ
31 March 2025
Six Commission Delegated Regulations supplementing Regulation 2023/114 (the EU Markets in Crypto Assets Regulation) (MiCAR) have been published in the Official Journal of the European Union (OJ), namely:- Commission Delegated Regulation – 2025/300 supplementing MiCAR with regard to regulatory technical standards (RTS) on information to be exchanged between competent authorities.
- Commission Delegated Regulation – 2025/305 supplementing MiCAR with regard to RTS specifying information to be included in an application for authorisation as a crypto-asset service provider (CASP).
- Commission Delegated Regulation – 2025/413 supplementing MiCAR with regard to RTS specifying the detailed content of information necessary to carry out the assessment of a proposed acquisition of a qualifying holding in an issuer of an asset-referenced token.
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UK digital securities sandbox instrument on ancillary FMI activities
28 March 2025
The UK Financial Conduct Authority (FCA) has published its Handbook Notice 128 which (among other things) confirms Handbook changes made by the Digital Securities Depositories Instrument 2025 (FCA 2025/14). The instrument makes changes to the glossary and market conduct sourcebook sections of the FCA handbook confirming how the FCA Handbook applies to authorised persons carrying out digital securities depository and ancillary activities in the FCA's digital securities sandbox. In summary, the core functions of a digital securities depository and category 1 ancillary activities (being activities which are carried on for the purpose of enabling those core functions) will be treated as unregulated activities, while category 2 ancillary activities (being other ancillary activities not classed as category 1) will continue to be subject to relevant parts of the FCA Handbook, as applicable.
This change was made in conjunction with updates to the UK Bank of England and FCA guidance on the operation of the digital securities sandbox (on 27 March) confirming how ancillary services would be included in a participant firm's sandbox approval notice. The updates also clarify that banking-type ancillary service providers would need to hold Part 4A permission to accept deposits, and other relevant permissions, to carry on any other regulated activity for both core cash settlement and other ancillary banking services.Topic : FinTech -
ESMA guidelines on suitability requirements and format of the periodic statement for portfolio management activities under MiCAR
26 March 2025
Official translations of the guidelines on certain aspects of the suitability requirements and format of the periodic statement for portfolio management activities under the EU Markets in Crypto Assets Regulation (MiCAR) have been published on the European Securities and Market Authority's (ESMA's) website. These guidelines apply to competent authorities and cryptoasset service providers (CASPs) where they provide advice on cryptoassets or portfolio management of cryptoassets. They specify the suitability requirements under Article 81(1), (7), (8), (10), (11) and (12) of MiCAR and the requirements applicable to the format of the periodic statement to be provided by CASPs in accordance with Article 81(14) of MiCAR. The guidelines apply from 25 May. Competent authorities must notify ESMA by 25 May whether they (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines, with their reasons for not complying. Financial market participants are not required to report whether they comply with these guidelines.Topic : FinTech -
Suite of regulatory technical standards supplementing MiCAR published in OJ
24 March 2025
Four Commission Delegated Regulations supplementing Regulation 2023/1114 (MiCAR) have been published in the Official Journal of the EU, namely:- Commission Delegated Regulation - 2025/415 supplementing the EU Markets in Crypto Assets Regulation (MiCAR) with regard to regulatory technical standards specifying adjustment of own funds requirement and minimum features of stress-testing programmes of issuers of asset-referenced tokens or of e-money tokens.
- Commission Delegated Regulation - 2025/418 supplementing MiCAR with regard to regulatory technical standards specifying the minimum content of the governance arrangements on the remuneration policy of issuers of significant asset-referenced or e-money tokens.
- Commission Delegated Regulation - 2025/419 supplementing MiCAR with regard to regulatory technical standards specifying the procedure and timeframe for an issuer of asset-referenced tokens or of e-money tokens to adjust the amount of its own funds.
- Commission Delegated Regulation - 2025/421 supplementing MiCAR with regard to regulatory technical standards specifying the data necessary for the classification of crypto-asset white papers and the practical arrangements to ensure that such data is machine-readable.
Each of these delegated regulations will enter into force on 13 April.Topic : FinTech -
ESMA guidelines on the conditions and criteria for the qualification of cryptoassets as financial instruments
19 March 2025
The European Securities and Markets Authority (ESMA) has published official translations of its guidelines on the conditions and criteria for the qualification of cryptoassets as financial instruments under Article 2(5) of the Markets in Cryptoassets Regulation (MiCAR). The guidelines will now apply from 18 May to competent authorities and financial market participants including issuers, offerors, cryptoasset service providers, investors and all persons engaging in activities relating to cryptoassets. National competent authorities must notify ESMA whether they comply, do not comply but intend to comply, or do not intend to comply with the joint guidelines by 18 May. Financial market participants are not required to report whether they comply.Topic : FinTech -
Preliminary market engagement exercise for the UK digital gilt instrument pilot
18 March 2025
The UK Chancellor of the Exchequer has announced details of the launch of the procurement process for the pilot digital gilt instrument (DIGIT) issuance. The pilot aims to: (i) enable the government to explore how distributed ledger technology (DLT) can be applied across the lifecycle of the UK sovereign debt issuance process; and (ii) catalyse the development of UK based DLT infrastructure and the adoption of DLT in UK financial markets. It is expected that:- DIGIT will be issued on a platform within the Digital Securities Sandbox (DSS), and suppliers will need to obtain any necessary permissions from the Bank of England and the FCA to operate in the DSS before they will be eligible for selection under the associated procurement.
- Given that the use of 'unbacked cryptocurrencies' or stablecoins are not within the scope of the DSS, these solutions will not be available for the purposes of the payment leg of any DIGIT transaction.
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EU MiCAR regulatory technical standards on order book records and transparency data requirements for CASPs
14 March 2025
The following two delegated regulations made under Article 76(16) of Markets in Cryptoassets Regulation (MiCAR) have been published in the Official Journal of the European Union:- Commission Delegated Regulation (EU) 2025/416 of 29 November 2024 on regulatory technical standards (RTS) specifying the content and format of order book records for cryptoasset service providers (CASPs) operating a trading platform for cryptoassets. The RTS set out in Articles 2 to 15 the details of each order in cryptoassets advertised through a CASP's systems the relevant CASP is required to keep at the disposal of the competent authority, or give the competent authority access to, in the format laid down in Tables 2 and 3 of the Annex.
- Commission Delegated Regulation (EU) 2025/417 of 28 November 2024 supplementing MiCAR with regard to RTS specifying the manner in which CASPs operating a trading platform for cryptoassets are to present transparency data. The RTS specify the general principles of presentation of the information on operating rules for trading platforms, pre- and post-trade transparency requirements, real time publication of transactions, and disaggregation of pre- and post-trade data requirements.
Both delegated regulations will enter into force on 3 April.Topic : FinTech -
ESMA publishes overview of planned consultations for 2025
13 March 2025
The European Securities and Markets Authority has published an overview of its planned consultations for 2025. The consultations relate to workstreams under the EU Listing Act, the Markets in Financial Instruments package, the latest European Market Infrastructure Regulation (known as EMIR 3), the review of the Alternative Investment Fund Managers Directive, sustainable finance and investor protection. ESMA states that it will update the list regularly. -
ESAs publish guidelines on the standardised test for crypto-assets and templates for explanations and opinions under MiCAR
10 March 2025
The European Supervisory Authorities (ESAs) have published guidelines on: (i) a common approach for the regulatory classification of crypto-assets under the Markets in Crypto-asset Regulation (MiCAR); and (ii) templates for certain explanations and opinions required under MiCAR under Arts 8(4), 17(b)(ii) and 18(2)(e). The explanations and opinions relate to whether, or why, a crypto-asset or asset-referenced token should not be considered to be, either, an e-money token, a crypto-asset excluded from the scope of MiCAR or (in the case of crypto-assets) an asset-referenced token.
The guidelines apply from 12 May and national regulators, financial market participants and financial institutions must make every effort to comply with them. Within two months of publication of the guidelines on the ESAs' websites in all official languages, national regulators should inform the ESAs whether they comply or intend to comply, or otherwise their reasons for non-compliance.Topic : FinTech -
EC adopts Delegated Regulations on RTS under MiCAR
27 February 2025
The European Commission has adopted a number of Commission Delegated Regulations supplementing the Markets in Crypto-Assets Regulation (MiCAR):- Commission Delegated Regulation (C(2025)1206) adopted in accordance with Article 68(10) of MiCAR prescribes the regulatory technical standards (RTS) specifying records to be kept of all cryptoasset services, activities, orders and transactions undertaken.
- Commission Delegated Regulation (C(2025)1216) adopted in accordance with Article 72(5) of MiCAR sets out RTS specifying the requirements for policies and procedures on conflicts of interest for cryptoasset service providers and the details and methodology for the content of disclosures on conflicts of interest.
- Commission Delegated Regulation (C(2025)1220) adopted in accordance with Article 32(5) of MiCAR contains RTS specifying the requirements for policies and procedures on conflicts of interest for issuers of asset-referenced tokens.
The Council of the EU and the European Parliament will now scrutinise the Delegated Regulations. If neither objects, they will be published in the Official Journal of the European Union and enter into force 20 days after publication.Topic : FinTech -
EBA opinion on EC's partial rejection of RTS on information required in application for authorisation of ARTs
27 February 2025
The European Banking Authority (EBA) has published an opinion (dated 25 February) on the European Commission's (EC's) amendments relating to the final draft regulatory technical standards (RTS) on the information to be included in the application for authorisation to offer the public and to seek admission to trading of asset-reference tokens (ARTs) under Article 18(6) of the Markets in Crypto-Assets Regulation (MiCAR). The EBA has endorsed the substantive amendments to the draft RTS submitted by the EC and has accepted the remaining changes on other parts that are not considered substantive.
The EBA also published a letter to the EC setting out its intention to accept the changes but inviting the EC to consider amending the Level 1 text at the next available opportunity, to include certain elements that were set out in the draft RTS, given their importance from a supervisory perspective. In particular, the EBA suggest that the EC amend MiCAR to address the requirements of (i) a market abuse policy; (ii) an independent third-party audit about the issuer's proprietary DLT that is operated by the issuer or by a third-party operator; and (iii) a notion of good repute aligned with the rest of the financial sector.Topic : FinTech -
ESMA guidelines on maintenance of systems and security access protocols under MiCAR
26 February 2025
The European Securities and Markets Authority (ESMA) has published official translations of the guidelines on the maintenance of systems and security access protocols for offerors and persons seeking admission to trading of cryptoassets other than asset referenced tokens (ARTs) and e-money tokens (EMTs). The guidelines apply to competent authorities and to 'offerors' as defined in Article 3(1)(13) of the Markets in Crypto-Assets Regulation (MiCAR) and persons seeking admission to trading of cryptoassets other than ARTs or EMTs in relation to Article 14(1), point (d), of MiCAR.
The purpose of these guidelines is to specify the appropriate standards for offerors and persons seeking admission to trading who are not subject to the same operational resilience under MiCAR and the Digital Operational Resilience Regulation as their cryptoasset service provider and issuer counterparts. The guidelines include discussion of: (i) the general principle on proportionality; (ii) administrative arrangements and roles and responsibilities concerning systems and security access protocols; (iii) physical security access protocols; (iv) security access protocols for network and information systems; and (v) cryptographic key management.
The guidelines will apply from 27 April. National competent authorities must notify ESMA by 26 April whether they comply, do not comply but intend to comply or do not intend to comply with the guidelines. Offerors and persons seeking admission to trading are not required to report whether they comply with the guidelines. -
ESMA guidelines on cryptoasset transfer services under MiCAR
26 February 2025
The European Securities and Markets Authority (ESMA) has published official translations of its guidelines on the procedures and policies, including the rights of clients, in the context of transfer services for cryptoassets under the Markets in Crypto-Assets Regulation (MiCAR) on investor protection. The guidelines apply to competent authorities and cryptoasset service providers (CASPs) that act as providers of transfer services for cryptoassets on behalf of clients within the meaning of Article 3(1)(26) of MiCAR. These guidelines aim to ensure the common, uniform and consistent application of the provisions in Article 82 of MiCAR. They include guidelines on: (i) the policies and procedures in the context of transfer services for cryptoassets; (ii) information requirements on individual transfers for cryptoassets; (iii) execution times and cut-off times; (iv) rejection or suspension of an instruction to transfer cryptoassets or return of cryptoassets transferred; and (v) the liability of the CASP.
The guidelines will apply from 27 April. National competent authorities must notify ESMA by 26 April whether they comply, do not comply but intend to comply or do not intend to comply with the guidelines. Cryptoasset service providers are not required to report whether they comply with the guidelines. -
ESMA guidelines on reverse solicitation under MiCAR
26 February 2025
The European Securities and Markets Authority (ESMA) has published official translations of its guidelines on situations in which a third-country firm is deemed to solicit clients established or situated in the EU and supervision practices to detect and prevent circumvention of the reverse solicitation exemption under the Markets in Crypto-Assets Regulation (MiCAR). The guidelines apply to competent authorities in relation to Article 61(3) of MiCAR. The guidelines include discussion of: (i) the means of solicitation; (ii) the fact that the solicitation may be carried out by the third-country firm itself or any person acting on its behalf or having close links with the third-country firm; and (iii) the construction of the concept of 'exclusive initiative of the client'. The Annex to the guidelines contains a non-exhaustive list of examples of circumstances where a third-country firm is likely to be regarded as soliciting clients in the EU.
The guidelines will apply from 27 April. National competent authorities must notify ESMA by 26 April whether they comply, do not comply but intend to comply or do not intend to comply with the guidelines. -
FSB letter to G20 finance ministers and central bank governors ahead of meeting
24 February 2025
The Financial Stability Board (FSB) has published a letter (dated 21 February) to the G20 finance ministers and central bank governors ahead of their meeting on 26 and 27 February. The letter addresses areas of focus for the FSB, including:- Implementation monitoring, providing a strategic review of the FSB's monitoring of 15 years of implementation of reforms. The review is intended to provide valuable insights into the effectiveness of the monitoring of post-global financial crisis regulatory reforms and identify areas where improvements can be made in the tools used to ensure consistent, global implementation of agreed reforms. The FSB will publish a progress report in October.
- Completing the G20 roadmap to enhance cross-border payments. The FSB note that as the work has advanced, many structural issues have become apparent that require concerted efforts to resolve. Addressing these issues calls for significant additional work up to and beyond 2027. The FSB will report in October on progress towards the G20's goal of making cross-border payments faster, cheaper, more transparent, and accessible. The FSB's focus this year is on improving the end-user experience, coordinating closely the work of the Bank for International Settlements Committee on Payments and Market Infrastructures and other partner organisations.
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Wolfsberg Group FAQs to help assess risks generated by the emergence of digital assets for AML and CTF purposes
21 February 2025
The Wolfsberg Group has published FAQs on defining digital assets. The FAQs propose definitions to be used by financial institutions, policymakers, supervisors and regulators to understand the characteristics of digital assets, money laundering, terrorist financing and operational risks they generate, as well as serve as an input to financial institutions developing policies and appropriate controls. The Wolfsberg Group intends to supplement these FAQs in future with guidance on the risks and associated controls for digital assets in line with the concepts developed in the FAQs.
The Wolfsberg Group has also published guidance on payment transparency roles and responsibilities to supplement the Wolfsberg Group Payment Transparency Standards. -
FSB thematic peer review on global regulatory framework for cryptoasset activities
21 February 2025
The Financial Stability Board (FSB) has published summary terms of reference for its thematic peer review on the FSB global regulatory framework for cryptoasset activities. The objective of this peer review is to examine members' progress, experience and lessons learned in implementing the FSB global regulatory framework for cryptoasset activities. This includes the high-level recommendations for the regulation, supervision and oversight of both cryptoasset markets and activities, and global stablecoin arrangements. It will focus particularly on the: (i) regulatory frameworks and implementation status; (ii) data reporting; (iii) cross-border cooperation; and (iv) stablecoins. The FSB expects to publish the peer review report in October.
The FSB is seeking feedback from stakeholders as part of its thematic peer review and a questionnaire has been distributed to relevant jurisdictions to collect information. The FSB invites feedback on issues such as: (a) the impact of jurisdictional regulatory frameworks on decisions of cryptoasset issuers and service providers; (b) experiences and challenges faced by cryptoasset market participants in meeting the relevant regulatory and supervisory requirements; (c) how financial stability vulnerabilities of cryptoasset activities differ across jurisdictions; and (d) whether there are specific market practices and/or trends in certain geographies and/or segments that may pose a threat to financial stability.
Feedback should be submitted by 28 March.Topic : FinTech -
EU MiCAR technical standards published
20 February 2025
Two delegated acts were published in the Official Journal of the European Union (OJ) in respect of the EU MiCAR.- Commission Delegated Regulation (EU) 2025/303, which comprises regulatory technical standards specifying the information to be included by certain financial entities in the notification of their intent to provide crypto-asset services.
- Commission Implementing Regulation (EU) 2025/304, which comprises implementing technical standards for the standard forms, templates and procedures for the notification by certain financial entities of their intention to provide crypto-asset services.
Both sets of technical standards concern the notification requirements applied to certain firms seeking to provide crypto-asset services, where article 60 of MiCAR imposes a requirement to supply specified information to the competent authority of the applicant's home member state at least 40 working days before providing those services. The Delegated and Implementing Regulations will enter into force on the twentieth day following their publication in the OJ. -
Eurosystem update on settling DLT transactions in central bank money
20 February 2025
The European Central Bank (ECB) has published a press release confirming its decision to expand its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money. The press release confirms that the Eurosystem will develop a settlement platform that is interoperable with trans-European automated real-time gross settlement express transfer system (referred to as TARGET) services, and will also consider a more integrated, long-term solution for settling DLT transactions in central bank money which will include international considerations. This expansion follows the Eurosystem's work last year on new technologies for wholesale central bank money settlement, which comprised various settlement experiments and included bank, financial market and DLT platform participants. -
UK regulators publish feedback statement on big tech and digital wallets
19 February 2025
The UK Financial Conduct Authority (FCA) and the UK Payment Systems Regulator (PSR) have issued a joint feedback statement on the usage and impact of big tech and digital wallets (FS25/1). The feedback statement was accompanied by a press release and joint letter to the UK Competition and Markets Authority (CMA) regarding the CMA's invitation to comment on investigations in relation to certain mobile ecosystems. The feedback statement highlights four potential issues around big tech and digital wallets:- First, there are competition concerns as between different digital wallets (and mobile ecosystems).
- In addition, there are competition concerns as between payment systems within digital wallets, particularly where digital wallets do not provide a choice of payment methods except for cards.
- Operational resilience and consumer rights and protection are an issue, given that reliance on digital wallets could impact the financial system's resilience if consumers do not have other means of payment.
- Finally, there are regulatory perimeter questions around whether the regulatory framework should include digital wallets in order to be more effective (although some responses raised concerns that this approach may hinder innovation).
Read more. -
ESMA consultation on MiCAR guidelines on assessment of knowledge and competence
17 February 2025
The European Securities and Markets Authority (ESMA) has published a consultation paper on the guidelines for the criteria on the assessment of knowledge and competence under Markets in Crypto-Assets Regulation (MiCAR). The guidelines relate to natural persons giving advice or information about crypto-assets or a crypto-asset service. In terms of approach, ESMA has taken as a reference the Markets in Financial Instruments Directive guidelines on the assessment of knowledge and competence.
ESMA proposes four guidelines. The first guideline is a general guideline to ensure that crypto-asset service providers (CASPs) take sufficient steps to ensure that their staff providing information or advice on crypto-assets or crypto-asset services possess the necessary knowledge and competence to fulfil their obligations. This includes an understanding of how to apply the CASPs internal policies and procedures designed to comply with MiCAR. Guideline two concerns criteria for staff giving information about the relevant crypto-assets or crypto-asset services. Guideline three concerns criteria for staff giving advice about crypto-assets or crypto-asset services, and addresses the minimum requirements for professional qualification and professional experience, as well as the minimum number of hours of continuous professional development or training per year. Finally, guideline four on organisational requirements states that CASPs' organisational requirements should ensure that the knowledge and competence of the staff giving information and advice on crypto-assets or crypto-asset services is assessed, maintained and updated appropriately.
The deadline for comments is 22 April. ESMA will publish a final report and guidelines in Q3 this year. -
Eight Delegated Regulations under MiCAR published in Official Journal of the European Union
13 February 2025
Eight Delegated Regulations supplementing the Markets in Crypto-assets Regulation (MiCAR) have been published in the Official Journal of the European Union (OJ).
Read more.Topic : FinTech -
European Central Bank decision on non-bank payment service providers' access
6 February 2025
The European Central Bank (ECB) has published Decision (EU) 2025/222 relating to access by non-bank payment service providers (NB-PSPs) to Eurosystem central bank operated payment systems and central bank accounts. The EU Instant Payments Regulation (Regulation (EU) 2024/886) introduced certain changes to the EU Settlement Finality Directive (SFD) and Payment Services Directive (PSD 2), including adding NB-PSPs to the list of institutions eligible to become participants in payment systems designated under the SFD and permitting NB-PSPs to deposit their clients' funds for safeguarding in a separate account in a bank or central bank, at the central bank's discretion.
The ECB's decision: (i) sets out the circumstances in which a Eurosystem central bank should provide access to central bank operated payment systems, (ii) prohibits Eurosystem central banks from offering or providing safeguarding accounts to NB-PSPs or crypto-asset services providers, (iii) determines the maximum amounts that may be held by an NB-PSP across its accounts at any given central bank operated payment system, and (iv) provides for penalties in the event that an NB-PSP fails to comply with the maximum holding amount limit or requirements for access to central bank operated payment systems.
The Decision will enter into force on 26 February 2025 and will apply from 9 April 2025.
For more information on the issues and developments relating to fintech, see our blog A&O Shearman on fintech and digital assets. -
Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025 laid
January 30, 2025
The Financial Services and Markets Act 2023 (Digital Securities Sandbox) (Amendment) Regulations 2025 were laid before parliament, together with an explanatory memorandum. The Regulations relate to the Digital Securities Sandbox, which is a temporary supervisory regime allowing firms to test certain innovative financial market infrastructure activities that launched on September 30, 2024. The Regulations amend the Sandbox by modifying the application of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to Sandbox participants. This is to ensure that firms which may already be registered or authorized with the FCA for other activities need not register separately with the FCA as a cryptoasset business for the purpose of undertaking Sandbox activities. The explanatory memorandum accompanying the Regulations also confirms that a number of firms have successfully completed the approvals process for the Sandbox and passed through Gate 1 (the testing stage). The Regulations make certain other minor amendments, and come into force on March 3, 2025. -
Financial Stability Board publishes work program for 2025
January 23, 2025
The Financial Stability Board has published its work program for 2025. Priority areas of work for 2025 include:- supporting global cooperation on financial stability: the FSB will continue monitoring global financial stability developments and the implications of emerging financial innovation, and conduct in-depth analysis on vulnerabilities in non-bank financial intermediation and climate change;
- enhancing the resilience of NBFI: while preserving its benefits, the FSB workstream includes finalizing policy recommendations on NBFI leverage, developing and beginning implementation of a medium-term workplan to address issues relating to non-bank data availability, use and quality and analyzing the resilience and functioning of the repo market;
- harnessing the benefits of digital innovation while containing its risks: the FSB will produce a thematic peer review on implementation of its crypto-asset recommendations, a report on how financial authorities can monitor AI adoption and assess related vulnerabilities, and finalize the format for incident reporting exchange;
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UK Financial Services and Markets Act 2000 (Collective Investment Schemes) (Amendment) Order 2025 published
January 9, 2025
The Financial Services and Markets Act 2000 (Collective Investment Schemes) (Amendment) Order 2025 has been published, alongside an explanatory memorandum. The Order includes a new paragraph 22 to the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (the "CIS Order"). The Schedule to the CIS Order specifies the kinds of arrangements which do not amount to a collective investment scheme. The new paragraph clarifies that arrangements for qualifying crypto-asset staking do not amount to a collective investment scheme. The aim of the instrument is to provide clarity to firms so that they are able to offer staking services to their U.K. customers without being subject to the collective investment scheme rules for this activity. The U.K. government has considered the need for an appropriate degree of consumer protection from the risks associated with the marketing of staking products and considers that this protection is delivered by communications on staking arrangements provided in compliance with the requirements of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and relevant FCA rules and guidance. The Order comes into force on January 31, 2025.
For more information on the issues and developments relating to fintech, see our blog A&O Shearman on fintech and digital assets. -
European Banking Authority consults on draft technical standards on the prudential treatment of crypto-assets exposures
January 8, 2025
The European Banking Authority has published a consultation paper on its draft Regulatory Technical Standards on the calculation and aggregation of crypto-exposure values under the Capital Requirements Regulation 3. The RTS specify the technical elements necessary for institutions to calculate and aggregate crypto-asset exposures in relation to the prudential treatment of such exposures. The RTS aim to address implementation aspects and ensure harmonization of the capital requirements on crypto-assets exposures by institutions across the EU.
The draft RTS also further develop the relevant capital treatment for credit risk, counterparty credit risk, market risk and credit valuation adjustment risk for 'asset reference tokens' and 'other' crypto-assets exposures and align, to the extent possible, the capital treatment with the elements specified in the Basel standard on prudential treatment of crypto-asset exposures.
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European Commission writes to EU authorities on the interplay between crypto asset and payment services regulations
December 10, 2024
The European Banking Authority has published a letter from the European Commission (dated December 6, 2024) to the EBA and the European Securities and Markets Authority regarding the interplay between Markets in Crypto Assets Regulation and the Payment Services Directive. The Commission notes the diverging interpretations among member states about the interplay between MiCAR and PSD2 and asks the EBA, with ESMA, to explore the possibility of issuing a "no action letter" on the enforcement of PSD2 authorization requirements as regards services with electronic money tokens provided by crypto asset service providers (or by entities benefiting from the transitional period under MiCAR) that may be inadvertently caught by PSD2. Where dual authorization would nevertheless be required, the Commission invites the EBA, with ESMA, to explore whether the PSD2 authorization process could be streamlined to reduce the operational burden on institutions. The EBA has responded (in a letter dated December 10, 2024), stating that it agrees with the concerns, and is assessing the issues in co-ordination with ESMA. The EBA aims to publish a response by April 2025.
For more information on the issues and developments relating to FinTech, see our blog A&O Shearman on fintech and digital assets. -
UK Financial Conduct Authority Policy Statement on Changes to Financial Crime Guide
November 29, 2024
The U.K. Financial Conduct Authority has published a policy statement on changes to its financial crime guide, following its consultation in April. The changes cover the following areas: (i) sanctions—to reflect information learnt from assessments of firms' sanctions' systems and controls following Russia's invasion of Ukraine in 2022; (ii) proliferation financing—to ensure that proliferation financing is explicitly referenced throughout the guide, where appropriate. This includes highlighting a 2022 change to the MLRs, which requires firms to conduct proliferation financing risk assessments; (iii) transaction monitoring—to provide further guidance on how firms can implement and monitor transaction monitoring systems. This includes supporting responsible innovation and new technological approaches; (iv) cryptoasset businesses—to make clear that cryptoasset businesses registered under the MLRs should refer to the guide; (v) Consumer Duty—to clarify that firms should consider whether their systems and controls are consistent with their obligations under the Duty; and (vi) consequential changes—includes replacing expired links, updating outdated references to EU rules and refreshing case studies based on more recent FCA enforcement notices.
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UK Financial Conduct Authority Discusses Strategy for 2025 to 2030
November 26, 2024
The U.K. Financial Conduct Authority has published a speech by Emily Shepperd, FCA Chief Operating Officer, on the FCA's strategy for 2025 to 2030. In the speech, Ms. Shepperd sets out the four main themes of the FCA's strategy. Ms. Shepperd emphasises that trust in both the FCA and the financial services sector underpins these themes and will be crucial as the FCA looks to pursue growth, alongside ensuring proportionality in regulation and encouraging innovation. She also explains that the FCA has decided to set its ambitions on 2030, a five-year strategy, learning from its first 3-year strategy that it takes time to deliver and cement change.
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Speech: UK government's Approach to Tokenization and Regulation
November 25, 2024
HM Treasury has published a speech given on November 21, 2024, by Tulip Siddiq, Economic Secretary to the Treasury, on the U.K. government's approach to tokenisation and regulation. In the speech, Ms. Siddiq confirms that HM Treasury intends to implement the proposal for the financial services regulation of cryptoassets in the U.K. in full. The proposals were published in October 2023 and included proposals for the creation of various new regulated activities for cryptoassets, as well as associated regimes for both admissions to trading and market abuse. HM Treasury also intends to proceed with removing the legal uncertainty over whether cryptoasset staking services constitute a collective investment scheme under financial services law. HM Treasury is also proceeding with the proposals for new regulated activities for stablecoin. Ms. Siddiq explains that the regulated activity for stablecoin issuance will ensure that the FCA can properly manage stablecoin specific risks, most notably those associated with management of the backing assets. This proposal will be implemented to the same timetable as the rest of the regulatory regime for cryptoassets.
For more information on the issues and developments relating to FinTech, see our blog A&O Shearman on fintech and digital assets. -
International Organization of Securities Commissions Publishes Roadmap to Enhance Retail Investor Online Safety
November 19, 2024
The International Organization of Securities Commissions has launched a new roadmap for retail investor online safety. The strategic initiative aims to safeguard retail investors worldwide from fraud, excessive risk, and misinformation as digital trading and social media reshape the retail financial market.
Read more.