Stakeholder opinion on the use of distributed ledger technology for securities trading and settlements is under examination by the European Securities and Markets Authority (ESMA).
In fact, the European Union’s securities regulator has issued a “request for evidence”. Allowing stakeholders to comment on the regulations for regulatory technical standards (RTS) on reporting and transparency for the DLT trial. Which slated to start next year.
The main responsibilities of ESMA are to improve EU investor protection, improve financial markets, and increase member collaboration.
The purpose of the EU regulator’s call for evidence is to examine if trading transparency. As well, data reporting regulations need to be modified to apply to tokenized securities that run on DLT.
The goal is to “allow more efficient, safe, and cost-effective management of data stored on DLTs. While retaining its quality, usability, and comparability”, according to the ESMA website.
Stakeholders also urged to share their thoughts on how to deliver data on “transactions, financial instruments. In addition to transparency” to regulators.
The EU regulator will assess whether RTS adjustments required after receiving the feedback. If this is the case, the ESMA will consult again before submitting a final draught for approval to the European Commission.
Solid regulations of digital assets across the European Union are crucial
In July 2021, the French government proposed that the European Securities and Markets Authority (ESMA) regulate activities and offer consistent regulations relating to digital assets across the European Union. According to the Autorité des marchés financiers, the development of regulations is a “prerequisite to a strong and autonomous European Union capable of competing on a worldwide scale”.
In September 2021, the European Securities and Markets Authority (ESMA) released research identifying increased risk-taking behaviour. As well as expected market enthusiasm as reasons for crypto asset volatility in the first half of 2021. Raising concerns about investor safety.