On 2 June 2022, there was published in the Official Journal of the EU, Regulation 2022/858 of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology (DLT), and amending MiFIR, CSDR and MiFID II. Most of the provisions of the Regulation apply from 23 March 2023.
The Regulation is part of a package of measures proposed by the European Commission to further enable and support the potential of digital finance in terms of innovation and competition while mitigating the associated risks. The Regulation aims at developing the trading and settlement for ‘tokenised’ securities, i.e. digital representations of traditional securities and enabling market participants as well as EU regulators to gain experience on new opportunities and issues raised by DLT while ensuring financial stability, investor protection and market integrity.
The Regulation introduces three categories of DLT market infrastructures (DLT MI): DLT Multilateral Trading Facilities (DLT MTF), DLT Trading and Settlement Systems (DLT TSS) and DLT Settlement Systems (DLT SS). DLT MIs can request limited exemptions from specific requirements in EU legislation (MiFID II, CSDR), provided they comply with the conditions attached to those exemptions and compensatory measures requested by the relevant Member State competent authority. The permission to operate a DLT MI may come in addition to an authorisation as a CSD or as an investment firm (or regulated market) or can be granted to new entrants that will have to meet the relevant MiFID II / CSDR requirements, except those for which the applicant requests, and has been granted, an exemption.