Response to consultation on the adjustment of own funds requirements and design of stress testing programmes for issuers under MiCAR
Question 1. Is the procedure clear and the timelines for the issuer to provide views on the assessment and submit the plan reasonable?
Paragraph 4, Article 1 states that "The competent authority shall notify the issuer of asset-referenced tokens or, where applicable, the issuer of e-money tokens issued by electronic money institutions with the final determination of the elements set out in paragraph 2 (a) to (e)".
We recommend indicating the timeframes for the final determination of the elements set out in paragraphs 2 (a) to (e) in order to establish a clear procedure for both authorities and issuers.
Paragraph 4, Article 1 states that "Within 20 working days from receipt of the notification referred to in paragraph 4, the issuer of asset-referenced tokens or, where applicable, the issuer of e-money tokens issued by electronic money institutions shall submit to the competent authority detailed plan on how its own funds will be increased within the timeline set by the competent authority".
We recommend expanding the timeframe for issuers up to 30 working days for submitting a detailed plan to the competent authority since the procedure to establish correct amendments to own funds demands thorough preparation and analysis.
Question 2. Are the timeframes for issuers to adjust to higher own funds requirements feasible?
Please take a look at our response above.
Question 3. During the period when own funds need to be increased by the issuer, should there be more restrictions on the issuer to ensure timely implementation of the additional own funds requirements, for example banning the issuance of further tokens?
We consider the restrictions shall be made only regarding further changes in the management and management body of the issuer during the period when own funds need to be increased to ensure transparency during the process.
The restrictions concerning banning the issuance of further tokens may potentially influence the issuer's ability to comply with its own funds amendment procedure.
Question 4. Do you agree with the criteria to identify if an issuer has a higher degree of risk?
Since the competent authorities should evaluate on a case-by-case basis following a broad assessment of all the criteria it is difficult to evaluate the whole procedure.
Question 5. Do you agree with the procedure to assess whether an issuer has a higher degree of risk?
We agree with the procedure of evaluating a higher degree of risk and its performance on a case-by-case basis.
Question 6. Do you consider the criteria and their evaluation benchmarks sufficiently clear?
The criteria and their evaluation benchmarks are vaguely described and require a certain level of flexibility from competent authorities to follow the criteria and their evaluation benchmarks while keeping the main overall objective of harmonisation of rules and convergence of supervisory practices.
Question 7. Do you agree with the need for a solvency and liquidity stress-test and the requirements of the stress-test?
Yes, we agree with the need for a solvency and liquidity stress-test and the requirements of the stress-test.
Question 8. Do you agree with the frequency and time horizon of the solvency and liquidity stress-test? Should there be more differentiation between significant and not-significant issuers? Should the stress testing be more frequent for issuers of asset-referenced tokens referenced to official currencies?
We agree with the frequency and time horizon of the solvency and liquidity stress-test.
We think there shall not be more differentiation between significant and non-significant issuers.
We think the stress testing shall not be more frequent for issuers of asset-referenced tokens referenced to official currencies.
Question 9. Should a reverse stress testing requirements/methodology be introduced? Please provide your reasoning.
We recommend considering the implementation of reverse stress testing and operational risk stress-testing for significant issuers since this will establish not covered situations and conditions that may give rise to potential risks in the future despite creating material operational burdens for such issuers.
Question 10. Do you have any other comments in relation to the stress-testing part in these RTS?
We do not have any other comments.