EBA and ESMA publish guidelines on suitability of management body members and shareholders for entities under MiCAR

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) today published joint guidelines on the suitability of members of the management body, and on the assessment of shareholders and members with qualifying holdings for issuers of asset reference tokens (ARTs) and crypto-asset service providers (CASPs), under the Markets in Crypto Assets regulation (MiCAR).

These two sets of guidelines are part of the EBA and ESMA‘s ongoing efforts to foster a transparent, secure, and well-regulated crypto-assets market, and complement the recently published governance package.

The first set of guidelines covers the presence of suitable management bodies within issuers of ARTs and CASPs, contributing to increase the trust in the financial system. Having robust governance arrangements in place will foster confidence in those assets and services, supporting the development of a healthy crypto-asset ecosystem.

It provides common criteria to assess the knowledge, skills, experience, reputation, honesty and integrity of members of the management body, as well as if they can commit sufficient time to perform their duties to ensure a sound management of these entities.

The second set of guidelines concerns the assessment of the suitability of shareholders or members with direct or indirect qualifying holdings in a supervised entity. This assessment is a key aspect of the gatekeeping function exercised by supervisory authorities, considering the significant influence that these persons may exercise on the management of the supervised entity.

It equips competent authorities with a common methodology to assess the suitability of the shareholders and members with direct or indirect qualifying holdings for the purpose of granting authorisation as issuers of ARTs or as CASPs, and for carrying out the prudential assessment of proposed acquisitions.

Background and legal basis

Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.

EBA and ESMA have received two joint mandates under MiCAR to issue respectively (i) guidelines on the assessment of the suitability of the members of the management body of issuers of ARTs and of the shareholders and members, whether direct or indirect, that have qualifying holdings in issuers of ARTs in accordance with Article 21(3), and (ii) guidelines on the assessment of the suitability of the members of the management body of the CASP and of the shareholders or members, whether direct or indirect, that have qualifying holdings in the CASP in accordance with Article 63(11).

In addition, EBA and ESMA have consider also appropriate to integrate part of such mandate with own initiative Guidelines under Article 16 of their respective founding Regulation, to clarify the circumstances giving rise to a qualifying holdings, i.e acting in concert, significant influence, indirect shareholders and decision to acquire and clarifying the methodology to assess the suitability, in accordance with Article 42(1), points (a) to (e) and  Article 84(1), points (a) to (e) of MiCAR, of a proposed acquirer of qualifying holdings in an issuer of ARTs authorised under Article 21 of that Regulation or in a CASP authorised under Article 62 of that Regulation, respectively.