The European Securities and Markets Authority (ESMA) published a call for evidence on the review of regulatory technical standards (RTS) developed under the Regulation on a pilot regime for market infrastructures based on distributed ledger technology. The call for evidence focuses on transparency and data reporting requirements, in order to consider the increasing use of blockchain technology in financial markets, especially the use of DLT for trading and settlement.
ESMA is seeking feedback on the pilot regime for market infrastructures based on distributed ledger technology (DLT Pilot Regime), looking into exemptions from the transaction reporting obligation and into ways for regulators to gain access to transaction data, financial instrument reference data and transparency data.
The DLT Pilot as proposed by the European Commission aims to support digital transformation of financial markets. If accepted, it will allow for the functioning of DLT-based market structures. The DLT Pilot Regime is in effect a regulatory sandbox, aimed at creating certain exemptions from specific requirements laid down in the EU legislation, such as Directive on markets in financial instruments (MiFID) and Regulation on central securities depositories (CSDR).
Stakeholders are asked to provide comments by 4 March 2022. Based on that feedback, ESMA is going to assess the need to review the document, and prepare proposals to be submitted to the European Commission.
The DLT Pilot Regime is likely to start applying in early 2023.
More details can be found and comments on the document can be submitted on ESMA’s website: https://www.esma.europa.eu/press-news/consultations/call-evidence-dlt-pilot-regime.