This is Part 4 of the series ‘Meet MiCA – the new global standard for crypto-asset regulation’.
When market participants, policy makers and academics started to consider the use of blockchain/DLT to re-organise the traditional financial market, services regarding securities holding and administration were immediately identified as a sector in which the new technology could be applied to the benefit of market efficiency. The securities sector is notoriously inefficient for historic reasons, and after a first wave of measure to lower entry barriers in the early 2000’s it is now probably time to allow for a second, market driven reorganisation of the sector.
However, despite earlier liberalisation of relevant activities, securities business is a very highly regulated area in the EU (and elsewhere), where notably the Settlement Finality Directive, MiFID, and the Central securities depositories regulation apply in addition to more general laws. This results in a situation in which regulation itself may constitute a barrier to enter this market. For instance, developing a DLT-based settlement system would need to require compliance with the aforementioned laws none of which was, however, drafted with decentralised structures in mind. In other words: with hindsight, they are probably not technology neutral.
This is why the DLT Pilot regime complements MiCA: to allow for the development of new types of settlement systems for crypto-assets that represent securities in the sense of MiFID. Think of it as a giant, EU-wide sandbox regime.
This seminar concentrates on the functioning of the pilot regime, what parts of the law are disapplied and how the checks and balances within this regime work. The seminar will also consider the ‘what next?’ that will have to be discussed once the three-years trial period of the pilot will be over.
Philipp Paech is the founder of navigatingfintech.com and a passionate educator, consultant and policy-maker specialising in regulation of financial services for more than 20 years. He is the main author of the 30 Recommendations on Innovation, Regulation and Finance instituted by the EU Commission in 2018, which became one of the base documents of the EU’s current Digital Finance Strategy. He is a leading member of the Unidroit global digital asset expert group. Philipp researches and teaches at London School of Economics and the European University Institute in Florence.
Prof. Filippo Annunziata is an Associate Professor of Financial Markets and Banking Legislation at Bocconi University, since 2007, previously at University of Bologna (since 1998). He holds his teaching courses in English and in Italian, and, since 2007, he teaches at Bocconi University in the top-ranked international course of the University (Finance). At University of Bologna (1998-2007) he also taught Competition Law, and Banking Law. He holds a PhD in Commercial Law and was a tenured researcher of Commercial Law at Bocconi University in the period 1994-1998. He is co-director of the RULES Unit, Baffi-Carefin Centre, Bocconi University, Academic Board Member – European Banking Institute. Academic Member and Fellow – Jean Monnet Centre of Excellence EUSFIL – European Union Sustainable Finance and Law.
Sophie Allain des Beauvais is a policy expert at Banque de France, focusing on payment services and cryptoassets policy. After graduating from LSE with an MSc in International Political Economy, she completed the UK Financial Conduct Authority’s (FCA) graduate programme, where she worked various Strategy and International roles to ensure the UK financial services sector was prepared for the end of the EU withdrawal transition period. Her current research interests relate to financial sector interconnectedness, the social foundations driving the development of cryptoassets worldwide, and the impact of narratives on the economy and regulatory paradigms.
FILIPPO ANNUNZIATA (SPEAKER)
Associate Professor of Financial Markets and Banking Law at Bocconi University
PHILIPP PAECH (HOST)
SOPHIE ALLAIN DES BEAUVAIS (MODERATOR)
Payments Policy Expert at Banque de France
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