AUSTRIA trends and deve LoPments

Contributed by: Markus Fellner, Florian Kranebitter and Florian Henöckl, Fellner Wratzfeld & Partners

nificant results in specific additional obligations for issuers such as:

• a remuneration policy for sound and effective risk management;

• crypto-asset service providers being permitted to hold tokens in custody;

• the monitoring of liquidity needs to meet redemption requests or the exercise of rights; and

• establishing a liquidity management policy and procedures.

DLT-Pilot

By introducing the DLT-Pilot regime the European Parliament aims to ensure that EU financial services legislation will be fit for the digital age and contribute to a future-ready economy that works for the people, including by enabling the use of innovative technologies. The aim of the DLT-Pilot is to temporarily exempt certain distributed ledger technology (DLT) market infrastructures from some of the specific requirements of EU financial services legislation in connection with trading and settlement of transactions in crypto-assets, which would otherwise qualify as financial instruments.

The DLT-Pilot regulates the requirements of DLT market infrastructures and their operators such as granting and withdrawing specific permissions to operate DLT market infrastructures (Article 1 of the DLT-Pilot). A DLT market infrastructure could be either a DLT multilateral trading facility, a DLT settlement system or a DLT trading and settlement system.

Article 3 of the DLT-Pilot sets out that DLT financial instruments shall only be admitted to trading on a DLT market infrastructure or be recorded on a DLT market infrastructure under certain conditions. These conditions are:

• shares, the issuer of which has a market capitalisation, or a tentative market capitalisation, of less than EUR500 million; or

• bonds, other forms of securitised debt, including depositary receipts in respect of such securities, or money market instruments, with an issue size of less than EUR1 billion, or units in collective investment undertakings covered by Article 25(4), point (a) (iv), of Directive 2014/65/EU, the market value of the assets under management of which is less than EUR500 million.

Thus, the aggregate market value of all the DLT financial instruments shall not exceed EUR6 billion.

Specific regulation (requirements and exemptions) exists in the DLT-Pilot for DLT multilateral trading facilities (Article 4, DLT-Pilot), DLT settlement systems (Article 5, DLT-Pilot) and DLT trading and settlement systems (Article 6, DLT-Pilot).

By excluding certain DLT market infrastructures from current financial regulation the DLT-Pilot creates a test environment for new developments in the financial sector. Through its limited application (Article 3 of the DLT-Pilot), the regulation provides that only specific instruments may be tested under the new regime; other instruments must follow the current legislation. The new approach certainly enhances the appeal of technological developments in the financial sector and encourages businesses to test their technical developments under real conditions in a financial market.

Dora

The European Parliament aims to raise the level of harmonisation on digital resilience components, by introducing requirements on information and communication technology (ICT) risk