The EBA consults on draft technical standards on own funds requirements and stress testing of issuers under MiCAR

EBA has initiated two consultations on draft RTS related to own funds requirements and stress testing for issuers under MiCA. The consultations focus on adjustments to own funds requirements and stress testing for issuers of ARTs and EMTs, including the procedure and timeframe for adjusting own funds requirements for significant ARTs or EMTs.
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The first set of draft RTS on specifying the adjustment of own funds requirements and stress testing of issuers of ARTs and of EMTs (EBA/CP/2023/28) outlines procedures and timeframes for adjusting own funds, criteria for risk assessments, and minimum requirements for stress testing programs. The approach maintains flexibility for competent authorities, considering the dynamic nature of ARTs. While the procedure for issuers to submit compliance plans is more prescriptive, competent authorities have flexibility in granting adjustment timeframes (up to 1 year) and risk assessment criteria. The draft RTS underscore the need for a harmonized approach across EU competent authorities, recognizing the unique characteristics of ARTs and the rapid developments in the sector.
The draft RTS cover the adjustment of own funds requirements and stress testing for issuers of ARTs and significant EMTs, with potential expansion to non-significant EMTs if required by the home Member State’s competent authority, aligning with Article 35 MiCA.
Interested stakeholders can contribute until 8 February 2024, and a public hearing is scheduled for 30 January 2024.
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The second set of draft RTS on specifying the procedure and timeframe to adjust its own funds requirements for issuers of significant ARTs or of EMTs (EBA/CP/2023/29) outlines that issuers of ARTs must adhere to own funds requirements, with a higher obligation (3% instead of 2% of the average reserve assets) for issuers of significant tokens, as mandated by Article 45(5) MiCA.
Issuers of significant tokens face more stringent requirements due to potential challenges in financial stability, monetary policy, and monetary sovereignty. The draft RTS emphasize flexibility for competent authorities, taking into account the novelty of ARTs, the absence of a universal risk assessment framework, and the rapid developments in this sector. The procedure and timeframe for adjustment involve competent authorities providing a timeframe within 25 working days of token classification, issuers submitting a compliance plan within 20 working days, and competent authorities closely monitoring plan implementation, with a maximum adjustment period of 3 months.
Interested stakeholders can contribute until 8 February 2024, and a public hearing is scheduled for 30 January 2024.
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MiCA, in effect since 29 June 2023, regulates crypto-asset issuance and services in the EU. The consultations aim to refine the regulatory framework, with the relevant provisions applicable from 30 June 2024. EBA is tasked with supervising significant ARTs and EMTs, and developing technical standards and guidelines for MiCA compliance.