On 20 October 2023, the European Banking Authority (EBA) published for consultation two draft regulatory technical standards (RTS) that it is mandated to develop under the Regulation on markets in crypto-assets (MiCA):
- Draft RTS on governance arrangements for remuneration policies.
- Draft RTS on the procedure for the approval of white papers of asset-referenced tokens (ARTs) issued by credit institutions.
Draft RTS the minimum content of the governance arrangements on the remuneration policy
By way of background, MiCA requires issuers of significant ARTs to adopt, implement and maintain a remuneration policy that promotes sound and effective risk management and that does not create incentives to relax risk standards. MiCA mandates the EBA to develop the minimum content of the governance arrangements on the remuneration policy.
The draft RTS sets out the relevant definitions as well as the governance structure regarding remuneration, including responsibilities of the management body of the issuer of significant ARTs. It also sets out the proposed criteria that remuneration policies for all staff of the issuers of significant ARTs should meet, including that such policies should be gender neutral and ensure equal pay for male and female workers for equal work or work of equal value, as well as be consistent with the objectives of the business and risk strategy, including environmental, social and governance (ESG) risk-related objectives. In addition, issuers of significant ARTs must identify all staff that has a material impact on their risk profile or the risk profile of the significant ARTs they issue.
Draft RTS on the approval process for white papers for ARTs issued by credit institutions
By way of background, MiCA introduces minimum standards and disclosure requirements for offerings and admissions to trading of crypto-assets – a crypto-asset white paper. A credit institution, that wishes to issue ARTs, must submit a crypto-asset white paper to its home Member State which would then approve it before it is published.
The draft RTS sets out certain elements concerning the approval of crypto-asset white papers, including:
- Submission of an application for approval of a crypto-asset white paper.
- Acknowledgement of the receipt and processing of an application for approval of a crypto-asset white paper.
- Assessment of completeness of the crypto-asset white paper.
- Request of missing information to a crypto-asset white paper.
- Information exchange between the competent authority and the European Central Bank (ECB) and, as applicable, other central banks.
- Assessment of the crypto-asset white paper in the absence of the ECB’s or another central bank’s opinion.
- Request of changes to a crypto-asset white paper.
- Approval of the crypto-asset white paper.
The deadline for comments on both draft RTS is 22 January 2024.
On 11 January 2023, the EBA will host two public hearings: public hearing on draft MiCA mandates relating to internal governance, remuneration, and suitability of members of the management body and shareholders, followed by public hearing on draft RTS on the approval of white papers of ARTs issued by credit institutions.
Following the public consultation and finalisation of the draft RTS, the EBA will submit them to the European Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council before being finalised and published in the EU Official Journal.