The European Securities and Markets Authority (ESMA) has published a report “The Distributed Ledger Technology (DLT) Applied to Securities Markets”.

The report’s conclusion is that it is premature to fully appreciate the changes that DLT may introduce, and that any regulatory action would be precipitate. ESMA has not identified any major impediments in the current European Union regulatory framework that would need to be addressed in the short term to allow for the first applications of DLT to securities markets to emerge in a scenario where DLT would be used to optimise processes within the current market structure.

However, a number of concepts, e.g. the legal certainty attached to DLT records or settlement finality, may require clarification. Also ESMA appreciates that broader legal issues, such as securities ownership, company law, insolvency law or competition/antitrust law may have an impact on the deployment of DLT.

For a full copy of the report, please click here.