EU Securities Regulator Sees Competitive Advantage From Blockchain

The European Securities and Markets Authority launched a consultation on January 4 seeking feedback from stakeholders about the need to amend the regulatory technical standards (RTS) concerning pre- and post-trade transparency and data reporting requirements for a pilot regime based on blockchain technology.

This pilot regime for market infrastructures based on distributed ledger technology (DLT) (“the DLT Pilot”) aims at developing the trading and settlement of ‘tokenized’ securities.

According to ESMA, the DLT Pilot will “enable 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 DLT Pilot is not yet finalized, but the European Parliament and the Council reached an agreement in November 2021, and legislators are expected to sign off the proposal during the first quarter of 2022. The DLT Pilot would start applying 9 months after the publication of the regulation, this means that the program may not effectively start until 2023.

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