Consob has informed that the UK supervisory authority Financial Conduct Authority (FCA) has issued new rules that will apply to all companies that market cryptoassets to consumers in the United Kingdom.
The new rules are published at the following link.
As of 8 October 2023 cryptoassets will fall under the scope of the solicitation/financial promotion scheme.
The definition of financial promotion is broad and applies to a wide variety of communications made by a business, including its website, mobile applications, social media posts and online advertising.
The regime has extraterritorial effect over a wide geographical scope. Financial promotions originated outside the UK but which may have an effect on UK consumers fall within the scope of the financial promotion scheme. This also applies if the promotion is not aimed exclusively at UK consumers.
When the regime comes into force, there will be four ways to communicate legally promoting cryptoassets to UK consumers:
- The promotion is carried out by an individual authorized by the FCA;
- The promotion is made by an unauthorized person but approved by a person authorized by the FCA;
- The Promotion is communicated by a person with a cryptoasset business relationship registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLRs”);
- The promotion otherwise complies with the exemption conditions of the Financial Promotion Order.
Promotions which are not made using one of these routes will breach section 21 of the Financial Services and Markets Act 2000 (FSMA) and will be a criminal offense punishable by a prison sentence of up to two years, an unlimited fine or both.
Promotions communicated through channels 1, 2 or 3 must comply with FCA rules.
The rules for financial promotions of cryptoassets are contained in document PS23/6.
For cryptoassets, the Authority has adopted an approach consistent with that adopted for other high-risk investments. This requires firms to use specific risk warnings (with a 24-hour cooling-off/withdrawal period) in their investment journeys, in addition to the general requirement that offers made are fair, clear and not misleading.
ESMA has published a supervisory briefing on understanding the definition of advice under MiFID II.
ESMA reviewed and updated the CESR Q&A on Understanding the Definition of Advice under MiFIDII to align it with new business models and recent technological developments.
The Q&A document is issued in the form(at) of a supervisory briefing and intended for use by the National Competent Authorities (NCAs) in their supervisory activities.
The supervisory briefing, among other topics, covers:
- The provision of personal recommendations and whether other forms of information could constitute investment advice;
- Guidance on when recommendations will be viewed as based on a view of a person’s circumstances;
- Perimeter issues around the definition of personal recommendation;
- Issues around the form of communication, including use of social media posts.
ESMA has issued a Public Statement on the sustainability disclosure expected to be included in prospectuses.
The statement sets out ESMA’s expectations on how the specific disclosure requirements of the Prospectus Regulation in relation to sustainability-related matters in equity and non-equity prospectuses should be satisfied considering the Environmental, Social and Governance (ESG) transition. This will help to:
- ensure that national competent authorities (NCAs) take a coordinated approach to the scrutiny of sustainability-related disclosure in prospectuses;
- provide issuers and their advisors with an understanding of the disclosure that NCAs will expect them to include in their prospectuses; and
- support investors’ ability to make an informed investment decision considering the importance of disclosure relating to sustainability-related matters.
ESMA has published its Final Report on the review of the technical standards for passporting under Article 34 of MiFID II.
ESMA’s proposals include targeted amendments to the existing RTS and ITS that would add new information requirements to the list of details investment firms have to provide at the passporting stage.
ESMA has published its first consultation package under the Markets in Crypto-Assets Regulation.
In this first of three consultation packages, ESMA is seeking input on proposed rules for crypto-asset service providers (CASPs), in particular related to their authorisation, identification and management of conflicts of interests and also how CASPs should address complaints.
In addition, ESMA aims to gather more insight on respondents’ current and planned activities, as a fact-finding exercise to better understand the EU crypto-asset markets and their future development. These questions relate to elements such as the expected turnover of the respondents, the number of white papers they plan to publish and the use of on-chain vs off-chain trading. The input to this part of the consultation will remain confidential and will serve to calibrate certain proposals to be inserted in the second and third consultation package.
The consultation will end on 20 September 2023.
The paper focuses on the cyber risk component, and it is a further step in enhancing EIOPA’s bottom-up insurance stress testing framework.
