Investment firms authorized under MiFID II directive would be entitled to provide crypto-asset services, having a special treatment under the Regulation on Markets in Crypto-assets (“MiCA”) which exempts such type of entities from the general authorization regime required for the other companies that provide services regarding crypto-assets.
The services to be provided by the investment firm should be equivalent to the investment services and activities for which they are already authorised. In this regard, the below chart contains the equivalence relationship between investment and crypto services:
The detail of the entities that would be providing crypto-asset services would be published in special register established by European Sales and Marketing Association (ESMA) and additionally it shall communicate -through its single contact of the Member State where authorisation was granted- the services which it would provide in other Member States.
Furthermore, it would be necessary to comply with prudential requirements (mainly regarding the safeguards and insurance policies) and with the organizational requirements (such as, management good repute and competence, skilled personnel, risk assessment). The majority part of said requirements are usually already met within the obtainment of the investment firm authorization granted by the Member State, but it would be recommendable to adjust existent internal policies, capital requirements and insurance policies coverage in order to include the relevant reference to the crypto-asset services to be rendered thereby.
It should be noted that the referred exception only applies just regarding to the authorization process, being necessary to comply in full with all the remaining provisions of MiCA for the rendering of crypto-assets services.
In view of the foregoing, certain similarities could be noticed between the legal regime applicable (i) to the issuance and commercialization of crypto assets regulated under MiCA and (ii) to the financial instruments. In this regard, the Spanish legislation has recently incorporated security tokens -which are expressly excluded from MiCA- in the definition of the financial instruments. Having already an EU directive (i.e. MiFID II) covering all the aspects of the financial instruments which has been implemented in the Member States, we understand that the European Commission, instead of amending the current rulings, has just enacted a new Regulation with direct application in each Member State addressing other types of crypto-assets.
Notwithstanding the foregoing, as it could be observed the management of both crypto-assets and financial instruments (including security tokens) has been entrusted, inter alia, to investment firms, where the remaining types of crypto tokens with underlying assets, such as, electronic money and debt securitizations has been distributed between the already existent EU and national legislations applicable to said underlying assets.