Global DCA Applauds ESMA Efforts to Support Distributed Ledger Technology (DLT) in European Financial Markets – Global DCA

Global DCA Applauds ESMA Efforts to Support Distributed Ledger Technology (DLT) in European Financial Markets

Global DCA Applauds ESMA Efforts to Support Distributed Ledger Technology (DLT) in European Financial Markets

Through this response, the Global DCA applauded the European Union’s efforts to enable and support the application of Distributed Ledger Technology (DLT) to financial markets. We believe that DLT has the potential to significantly impact innovation and competition in financial markets. The European Securities and Markets Authority (ESMA) is absolutely correct in recognizing the potential that DLT has to improve securities settlements. In many ways, settlements illustrate a perfect use case for DLT and highlight the many benefits that may accrue to the European securities markets, financial sector, and economy.

What was the focus of this Call for Evidence?

The Regulation on a pilot regime for market infrastructures based on distributed ledger technology (DLT) (“the DLT Pilot”) aims at developing the trading and settlement for ‘tokenised’ securities. The DLT Pilot requires ESMA to assess whether the regulatory technical standards (RTS) developed under MiFIR relative to certain pre- and post-trade transparency and data reporting requirements need to be amended to being effectively applied also to securities issued, traded and recorded on DLT. This call for evidence sought feedback from stakeholders on the need to amend the RTS on pre- and post-trade transparency and data reporting requirements in the context of the DLT Pilot.

What was the Global DCA’s Response?

The Global Digital Asset & Cryptocurrency Association’s response focused on the following key aspects:

  • Overview and Benefits of DLT in Financial Markets
    • Key considerations in assessing the appropriateness and performance of a DLT solution
    • Benefits of DLT in improving settlements
    • The importance of interoperability
  • Considerations for a Successful DLT Pilot
    • Strong leadership on importance of DLT
    • Assurance that any rules regarding deployment of DLT in securities markets work equitably for all EU Members
    • Role of the DLT pilot in nurturing the role of SMEs / MSMEs in European Economy

Please CLICK below to read the full response!