EU MiCA Guidelines: Ensuring Suitability and Integrity for Crypto-Asset Management Bodies
The Markets in Crypto-Assets Regulation (MiCAR) requires that members of the management body of issuers of asset-referenced tokens (ARTs) and crypto-asset service providers (CASPs), are suitable and of sufficiently good repute.
On June 27th, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published their joint guidelines to provide further clarity on these requirements.
The suitability requirement applies at the moment of authorization and on an ongoing basis. These guidelines are applicable for all board structures, and therefore not dependent on the board structure used by the entity, either unitary, dual board, or other structures.
Suitability of Members of the Management Body
The suitability assessment includes evaluating whether members have the appropriate knowledge, skills, and experience, both individually and collectively, to perform their duties and that they commit sufficient times to their role. For instance, the authorities require that members of the management body have an up-to-date understanding of the business activities and risks of the ART issuer or CASP, a clear understanding of the governance arrangements, and awareness of any conflicts of interest that may exist between the ART issuer or CASP and its stakeholders.
Members of the management body of ART issuers and CASPs must not have been convicted of offenses related to money laundering, terrorist financing, or any other offenses that would affect their good repute. All members must be of sufficiently good repute and integrity at all times, irrespective of the business activities.
Where the management body consists of both a management and a supervisory function, the guidelines apply to both.
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Note: The guideline also gives guidance on the suitability assessment of shareholders and members (whether direct or indirect) with qualifying holdings in issuers of ARTs and CASPs.
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