ESMA Q&As – list of questions currently under development

On 10 February 2023, the European Securities and Markets Authority (ESMA) published an updated version of the list containing questions received through its Q&A process. ESMA is working on developing a web-based tool to facilitate the submission of questions and the publication of questions received.
Compared to the previous version, the updated version contains one new section with following new questions:
Section 14 „DLT PILOT“:
1. Can there be other ways in which a DLT financial instrument can be issued according to the DLT Pilot Regulation (DLTR) , other than the examples mentioned below?
a) Native issuance of new financial instruments that are initially and directly issued, recorded, transferred and stored using a DLT;
b) Non-native issuance of financial instruments through which an existing financial instrument is re-issued in tokenised form as described in recital (3) of the DLTR.
2. Is partial tokenisation allowed under the DLTR? Does the DLTR apply to situations where not the entirety of an issuance of financial instruments is tokenised, but where, for example, only part of an issuance is registered with a DLT SS/TSS? In other terms, can financial instruments which have been regularly issued and subsequently partially tokenized be registered with a traditional CSD in their entirety, and be partially registered with a DLT SS/TSS for the tokenized portion (in such a case the registration of tokenised financial instruments by the DLT SS/TSS at the level of the classical CSD will function as a kind of omnibus account)?
Can the tokenised part be issued by another party than the issuer of the original financial instruments?
Can a financial instrument recorded in a traditional CSD be fungible with one recorded in a DLT SS/TSS (having both the same rights and obligations)?
For bonds, can one option be to consider the tokenised financial instrument as different from the original underlying financial instrument, similar to the “depositary receipts” model, in accordance with Article 3(1)(b) of the DLT Pilot Regulation?
3. Does Article 3(1)(c) of the DLTR require that a UCITS fund should be an ETF in order to be eligible?
4. Should ETFs or other collective investment undertakings represented by shares be considered as units in collective investment undertakings, rather than shares (transferable securities), thus falling into the bucket specified in Article 3(1)(c) of the DLTR, and hence assessed against the criteria in Article 25(4)(a) of MiFID II?
5. Are SFT transactions admissible on a DLT MTF/TSS? In particular, should Article 3(1) b) of DLTR, which excludes instruments “that embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved” be read as also excluding complex transactions like SFTs?
6. Are DLT MTFs permitted to organise trading off-chain in relation to DLT financial instruments?
Can a DLT MTF organise trading of all transactions in the DLT financial instruments off-chain or should this model fall under the DLT TSS/SS categories (see Section 2.3 below)?
Should it be mandatory for a DLT MTF to operate its matching engine with a DLT technology?
7. Would a DLT financial instrument traded on a DLT MTF be subject to the book-entry form obligation under CSDR unless it is registered in DLT form with a DLT SS/TSS that has applied for the exemption from Article 3 CSDR?
8. Should an entity that applies for a permission to operate a DLT TSS provide both the DLT MTF and DLT SS services?
Under which circumstances can an entity apply for the permission to operate a DLT MTF, without the need to operate a DLT TSS? Who can perform the settlement of transactions in DLT financial instruments, the initial recording of DLT financial instruments or the safekeeping services in relation to DLT financial instruments, in case an entity applies for the permission to operate a DLT MTF and not a DLT TSS?
9. Should ‘e-money tokens’ under the DLTR be interpreted under the MiCA definition of ‘e-money tokens’? Could settlement in e-money tokens be used by DLT MI operators even before MICA enters into force?
Does the issuer of the e-money tokens have to be authorised under EMD?
Is it correct that a DLT SS/TSS operator does not need an authorisation as a credit institution or payment services institution if it uses e-money tokens for cash settlement that are issued by a duly authorised institution? If the DLT SS/TSS receives and forwards e-money tokens from clients for settlement purposes, is it correct that this would not qualify as a service under MiCA?
Would e-money tokens used to support settlement on a DLT MI be allowed to be issued on a blockchain other than DLT MI? Is the answer different depending on the type of DLT MI (DLT MTF, DLT SS, DLT TSS)?
10. When does the exemption from Article 40 of CSDR have to be requested under the DLTR?
11. In addition to the DLT TSS/SS operators, should the DLTR exemption from Article 9 of CSDR on internalised settlement reporting also apply to the DLT TSS/SS participants if they perform settlement on the DLT TSS/SS?
*Please note that the questions labeled „New Question“ in the table are not really new questions compared to the previous version (published on 20 January 2023)