September 16, 2019

September 16, 2019

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ESMA and EBA Respond to Letter From European Commission on Cryptoassets Work

On August 20, the European Securities and Markets Authority (ESMA) published a letter written jointly with the European Banking Authority (EBA) and addressed to the European Commission (EC) relating to cryptoassets. The letter responds to a letter from the Commission dated July 19.

The letter begins by welcoming the EC’s work responding to issues identified in the January 2019 reports by ESMA and the EBA on cryptoassets and initial coin offerings (for more information, see the January 11, 2019 edition of Corporate & Financial Weekly Digest). ESMA and the EBA agree that it is vital that further work progresses urgently to inform any actions taken by the new EC.

The letter goes on to state that, as well as continuously monitoring market developments, ESMA and the EBA have a number of work streams underway relating to cryptoassets. At the international level, they are engaging with the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the Financial Action Task Force (FATF), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO). This work is intended to help inform a common approach at international level, for example, on matters such as the prudential treatment of banks’ exposures to cryptoassets, as well as the regulatory treatment of cryptoasset exchanges and trading platforms.

At the EU level, ESMA and the EBA will shortly launch a new stock-taking exercise of national regimes applicable to cryptoassets. This will include questions relating to the regulatory treatment of stablecoins, in the light of their increasing prominence. The letter adds that stablecoins also will be discussed at an event of the European Forum for Innovation Facilitators (EFIF) in September, along with a range of other financial technologies. The discussions at the EFIF level are intended to enhance national competent authorities’ understanding of the underlying technologies and their application in the financial services sector, and to promote a common regulatory and supervisory approach.

The letter is available here.

©2019 Katten Muchin Rosenman LLP

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John Ahern, Financial Attorney, London, Katten Law Firm
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John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
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Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
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Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
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Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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