On 20 October 2023, the European Banking Authority (EBA) issued for consultation draft guidelines on internal governance of issuers of asset-referenced tokens (ARTs) under the Regulation on Markets in Crypto-Assets (MiCA). By way of background, MiCA sets out governance requirements for issuers of ARTs and, in particular, stresses that the management body is responsible to ensure sound governance arrangements, including a sound risk strategy, risk culture and risk management framework.

The draft guidelines specify the various governance provisions in MiCA, taking into account the principle of proportionality, by specifying the requirements regarding the tasks, responsibilities and functioning of the management body, and the organisation of issuers of ARTs. The draft guidelines aim to ensure the sound management of all risks associated with the activities of issuers of ARTs, such as operational risks, including fraud, cyber and compliance risks. They also aim to provide for appropriate consumer and investor protection. The draft guidelines are consistent with the ‘three lines of defence’ model in identifying the functions within issuers of ARTs responsible for addressing and managing risks.

The draft guidelines consist of the following sections:

  • Title I – Application of the proportionality principle.
  • Title II – Role and composition of the management body.
  • Title III – Governance framework.
  • Title IV – Risk culture and business conduct.
  • Title V – Internal control framework and mechanisms.
  • Title VI – Business continuity management.
  • Title VII – Transparency.

The deadline for comments on the consultation is 22 January 2024. On 9 January 2024, the EBA will host a public hearing on various MiCA mandates, including on the draft guidelines. It is expected that the final version of the guidelines will be available when MiCA enters into force.