[ESMA70-460-189 ] Q&As DLT Pilot Regulation

The European Securities and Markets Authority (ESMA) has published an updated Questions and Answers (Q&A) document on the Distributed Ledger Technology (DLT) pilot regime. This includes the following new questions:
Topic 3, „Transaction Reporting“:
Question 6 (page 11): According to Article 26(5) of MiFIR, TVs shall report on behalf of firms that are not subject to the transaction reporting regime. In a DLT MTF or TSS operating under the DLT Pilot regime, the DLT MTF or DLT TSS may admit natural persons as members executing transactions. How should DLT MTFs or DLT TSS report on behalf of natural persons that are not subject to Article 26 of MiFIR?
Answer 6: In case the reporting exemption is granted by the NCA to the DLT MTF/TSS in the context of the DLTR, NCAs can request the DLT MTF/TSS to provide the access to all relevant data concerning natural persons executing transactions. NCAs should request as a compensatory measure that DLT MTFs/TSSs provide the relevant regulatory information through an adapted version of RTS 22. The adapted RTS 22 template would require DLT MTFs/TSSs to populate its LEI in Field 4 “Executing entity identification code” and, given that natural persons are expected to always trade on own account on these platforms, the template would require the National ID of the natural person executing the transaction to be populated in the respective Field 7 “Buyer identification code” and/or Field 16 “Seller identification code” as described in the tables below.
The tables can be found on pages 12-13 in the document.
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Topic 4, „Financial Instruments Reference Data“:
Question 3 (page 15): How should Field 5 of RTS 23 “Issuer or operator of the trading venue identifier” be populated for DLT financial instruments that are the digital representation of a previously issued financial instrument?
Answer 3: Where the full set of characteristics of the DLT financial instrument remain the same as the traditional financial instrument, with the only difference being the technology used for the respective issuances, the issuer of the DLT instrument should be the same as that of the preexisting financial instrument that is represented by the DLT one. Its LEI should thus be reported in Field 5 of RTS 23.
Question 4 (page 15): How should Field 5 of RTS 23 “Issuer or operator of the trading venue identifier” be populated for DLT financial instruments within Article 3(1)(a) and (b) DLTR that are exclusively created on the DLT and do not represent a previously issued financial instrument?
Answer 4: As for the case of non-DLT shares, bonds and other forms of securitised debt, including depositary receipts, Field 5 should be populated with the LEI of the legal entity which issues or proposes to issue the financial instrument within the meaning of the Prospectus Regulation and, in case of depositary receipts, the entity which issues the debt instrument represented in line with MAR Article 3(1)(21).
NEW Topic 6, „Transparency“
Question 1 (page 16): Which identification code should be provided by trading venues, investment firms and approved publication arrangements (APA) in the reporting fields for the purpose of the post trade transparency obligations under RTS 1 and RTS 2 in the context of DLT instruments?
Answer 1: For the purpose of post-trade transparency reports, in order to identify equity or equity-like instruments (including DLT instruments), as per Table 3 of Annex I of RTS 1, and non-equity instruments (including DLT instruments) as per Table 2 of Annex II of RTS 2, trading venues, investment firms and APAs are required to populate the “instrument identification code field” with the ISIN code. Nevertheless, in order to provide for more granular instrument information on DLT instruments, ESMA recommends that trading venues, investment firms and APAs complement the identification code provided by including the Digital Token Identifier (DTI) when publishing post-trade information. The DTI would be reported as an optional additional field.