Investment Operations

REGULATOR WEIGHS IN ON EUROPEAN DLT TRADING AND SETTLEMENT PILOT

Blockchain Data Initiative

EU securities regulator ESMA has published a Report on the distributed ledger technology pilot regime (DLT Pilot).  In the report, ESMA provides guidance on certain technical elements and makes recommendations on compensatory measures on supervisory data to ensure a consistent application by DLT market infrastructures from the start of the regime.

The report published today presents ESMA’s proposed way forward and includes the feedback received following the Call for Evidence launched in January and a workshop organized in March 2022. ESMA concludes that there is no need to amend the RTS on transparency and data reporting requirements before the DLT Pilot starts applying in March 2023.

The DLT Pilot Regime is part of the Digital Finance Package introduced by the European Commission in 2020 to further enable and support the potential of digital finance while mitigating associated potential risks. The Regulation on a pilot regime for market infrastructures based on the DLT Pilot aims at developing the trading and settlement for DLT financial instruments. The DLT Pilot requires ESMA to assess whether the RTS developed under MiFIR relative to certain pre- and post-trade transparency and data reporting requirements need to be amended to be effectively applied also to securities issued, traded, and recorded on DLT.

As its next step, ESMA said it will work on supervisory guidance clarifying the application of certain elements of the RTS on transparency and data reporting requirements. ESMA also intends to issue guidance on questions received by various stakeholders on the DLT Pilot to contribute to its convergent application.