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Esma consults on rule changes to accommodate tokenized securities

Esma consults on rule changes to accommodate tokenized securities

Europe's top securities regulator is seeking submissions on the need for amending the regulatory technical standards (RTS) on reporting and transparency requirements in order to accommodate growing use of blockchain technology in financial markets.

The call for evidence from the European Securities and Markets Authority (Esma) asks for input from stakeholders on the use of DLT for trading and settlement.

The agency is consulting on a pilot regime for market infrastructures based on DLT, examining transaction reporting exemptions and ways in which regulators can gain access to information on transactions, financial instruments' reference data and transparency data.

States the regulator: "The aim is to ensure more efficient, secure, and cost-effective management of the data stored on DLTs while preserving its quality, usability and comparability."

Stakeholders are invited to provide comments by 4 March 2022. Esma says that if amendments to the rules are required it will draw up proposals for submission to the European Commission for adoption.

The DLT Pilot is expected to apply in early 2023.

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