On 13 May 2024, the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) published its first MiCAR newsletter. The newsletter sets out insights from the pre-scan procedures the AFM offers to potential Crypto-Assets Service Providers (CASPs) under the Regulation on markets in crypto-assets (MiCAR).
In February 2024, the AFM invited interested parties to partake in the MiCAR pre-scan procedure. The AFM reports that various potential CASPs used this opportunity to gain insights into any future licence application they may make. The AFM shares the following five insights for the MiCAR license application:
- Potential CASPs should provide clear legal argumentation on the regulatory scope of activities and considerations.
- For the licence application, the potential CASP is responsible for adequately describing their services combined with a sound legal analysis detailing which MiCAR services are offered.
- As potential CASPs offer services of a technically, legally, and operationally complex nature, the AFM recommends that potential CASPs in their application provide flow charts and other visual representations that clarify their services. This will enable the AFM to properly assess (the regulatory scope of) the services for which authorization is being requested.
- CASPs should be detailed and concrete in their activities, policies and procedures.
- The AFM will assess whether a potential CASP’s activities, policies and procedures are compliant with MiCAR’s requirements.
- Potential CASPs should include DORA implementation in their license application.
- As the Digital Operational Resilience Act (DORA) enters into force on 17 January 2025, the AFM expects CASPs to create DORA-compliant policies and procedures which should be implemented in a timely manner.
- Potential CASPs must adequately identify, prevent and manage conflicts of interest.
- The AFM expects CASPs to take adequate measures to identify, prevent, mitigate and manage conflicts of interest. Conflict of interests risks may arise, for example, with dual roles at the board level.
- Potential CASPs should take notice of market abuse detection and reporting requirements.
- Persons professionally arranging or executing transactions (PPAETs) in crypto-assets should have in place effective arrangements, systems and procedures to prevent and detect market abuse according to Article 92 MiCAR.
- AFM will check in a licence application whether these policies and procedures are present and will assess the content.
- CASPs operating a trading platform.
- Reception and transmission of orders for crypto-assets on behalf of clients.
- Execution of orders for crypto-assets on behalf of clients.
- Providing portfolio management on crypto-assets.
- Exchange of crypto-assets for funds.
- Exchange of crypto-assets for other crypto assets.
- Persons dealing on own account in crypto-assets on a professional basis or as part of their business activity.
Since 22 April 2024, potential CASPs may submit a MiCAR licence application with the AFM.