### (34) adequate disclosure of fees and charges is critically important for the evaluation of the eltifs as a potential investment target by investors. such disclosure is also important where the eltif is marketed to retail investors in the case of master-feeder structures. it is therefore appropriate to require the eltif manager to include in the annual report of the feeder eltif a statement on the aggregate charges of the feeder eltif and the master eltif. ### (34) adequate disclosure of fees and charges is critically important for the evaluation of the eltifs as a potential investment target by investors. such disclosure is also important where the eltif is marketed to retail investors in the case of master-feeder structures. it is therefore appropriate to require the eltif manager to include in the annual report of the feeder eltif a statement on the aggregate charges of the feeder eltif and the master eltif. in order to protect investors from being charged unjustified additional costs , there should be a prohibition on master eltifs charging feeder eltifs subscription and redemption fees.


### (40) in order to give eltif managers sufficient time to adapt to the new requirements , including the requirements pertaining to the marketing of eltifs to investors , this regulation should start to apply six months after its entry into force , ### (40) in order to give eltif managers sufficient time to adapt to the new requirements , including the requirements pertaining to the marketing of eltifs to investors , this regulation should start to apply 12 months after its entry into force ,


### it represents no more than 50 % of the value of the capital of the eltif , and no more than 100 % of the value of the capital of the eltif for eltifs marketed solely to professional investors; ### it represents no more than 30 % of the value of the capital of the eltif , and no more than 100 % of the value of the capital of the eltif for eltifs marketed solely to professional investors;


### 1. the units or shares of an eltif may only be marketed to a retail investor where an assessment of suitability in accordance with article 25 , paragraphs 1 , 2 and 5 , article 25(6) , second and third subparagraph , and article 25(7) of directive 2014/65/eu has been carried out with respect to that investor. ### 1. the units or shares of an eltif shall be marketed to a retail investor only if the following conditions are fulfilled:


### it shall apply from [entry into force + 6 months]. ### it shall apply from [12 months after the date of entry into force of this regulation].


### (5) it is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at union level. the framework creates a system of two interlocked rules , together referred to as the globe rules , through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (etr) of an mne in a given jurisdiction is below the 15 %. in such case , the jurisdiction is considered to be low-taxed. those two rules are called the income inclusion rule (iir) and the undertaxed payment rule (utpr). under this system , the parent entity of an mne located in a member state has the obligation to apply the iir to its share of top-up tax relating to any entity of the group that is low-taxed , whether this is located within or outside the union. the utpr should act as a backstop to the iir through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the iir. ### (5) it is necessary to lay down rules in order to establish an efficient and coherent framework for the global minimum level of taxation at union level. the framework creates a system of two interlocked rules , together referred to as the globe rules , through which an additional amount of tax called a top-up tax should be collected each time that the effective tax rate (etr) of an mne in a given jurisdiction is below a tax rate of at least 15 %. in such case , the jurisdiction is considered to be low-taxed. those two rules are called the income inclusion rule (iir) and the undertaxed payment rule (utpr). under this system , the parent entity of an mne located in a member state has the obligation to apply the iir to its share of top-up tax relating to any entity of the group that is low-taxed , whether this is located within or outside the union. the utpr should act as a backstop to the iir through a reallocation of any residual amount of top-up tax in cases where not the entire amount of top-up tax relating to low-taxed entities could be collected by parent entities through the application of the iir.


### (7) while it is necessary to ensure that tax avoidance practices are discouraged , adverse impacts on smaller mnes in the internal market should be avoided. for this purpose , this directive should only apply to entities located in the union that are members of mne groups or large-scale domestic groups that meet the annual threshold of at least eur 750 000 000 of consolidated revenue. this threshold would be consistent with the threshold of existing international tax rules such as the country-by-country reporting rules9 . entities within the scope of this directive are referred to as constituent entities. certain entities should be excluded from the scope based on their particular purpose and status. excluded entities would be those that are not profit-driven and perform activities in the general interest and which are , for these reasons , not likely to be subject to tax in the member state in which they are located. in order to protect those specific interests , it is necessary to exclude from the scope of the directive governmental entities , international organisations , non-profit organisations and pension funds from the scope of this directive. investment funds and real estate investment vehicles should also be excluded from the scope when they are at the top of the ownership chain , since , for those so-called flow-through entities , the income earned is taxed at the level of the owners. ### (7) while it is necessary to ensure that tax avoidance practices are discouraged , adverse impacts on smaller mnes in the internal market should be avoided. for this purpose , this directive should only apply to entities located in the union that are members of mne groups or large-scale domestic groups that meet the annual threshold of at least eur 750 000 000 of consolidated revenue. this threshold would be consistent with the threshold of existing international tax rules such as the country-by-country reporting rules9 . however , flexibility should be provided for member states willing to apply the globe model rules to smaller entities , ensuring coherence within the single market. entities within the scope of this directive are referred to as constituent entities. certain entities should be excluded from the scope based on their particular purpose and status. excluded entities would be those that are not profit-driven and perform activities in the general interest and which are , for these reasons , not likely to be subject to tax in the member state in which they are located. in order to protect those specific interests , it is necessary to exclude from the scope of the directive governmental entities , international organisations , non-profit organisations and pension funds from the scope of this directive. investment funds and real estate investment vehicles should also be excluded from the scope when they are at the top of the ownership chain , since , for those so-called flow-through entities , the income earned is taxed at the level of the owners.


### (12) the etr of an mne group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to the agreed minimum tax rate of 15 % in order to determine whether the mne group or large-scale domestic group is liable to pay a top-up tax and consequently should apply the iir or the utpr. the minimum tax rate of 15 % agreed by the oecd/g20 inclusive framework on beps reflects a balance amongst corporate tax rates worldwide. in cases where the etr of an mne group falls below the minimum tax rate in a given jurisdiction , the top-up tax should be allocated to the entities in the mne group that are liable to pay the tax in accordance with the application of the iir and the utpr , in order to comply with the globally agreed minimum effective rate of 15 %. in cases where the etr of a large-scale domestic group falls below the minimum tax rate , the upe at the top of the large-scale domestic group should apply the iir in respect of its low-taxed constituent entities , in order to ensure that such group is liable to pay tax at an effective minimum rate of 15 %. ### (12) the etr of an mne group in each jurisdiction where it carries out activities or of a large-scale domestic group should be compared to a minimum tax rate of at least 15 % in order to determine whether the mne group or large-scale domestic group is liable to pay a top-up tax and consequently should apply the iir or the utpr. a minimum tax rate of at least 15 % reflects a balance amongst corporate tax rates worldwide. in cases where the etr of an mne group falls below the minimum tax rate in a given jurisdiction , the top-up tax should be allocated to the entities in the mne group that are liable to pay the tax in accordance with the application of the iir and the utpr , in order to comply with a minimum effective rate of at least 15 %. in cases where the etr of a large-scale domestic group falls below the minimum tax rate , the upe at the top of the large-scale domestic group should apply the iir in respect of its low-taxed constituent entities , in order to ensure that such group is liable to pay tax at an effective minimum rate of at least 15 %.


### (12) ‘minimum tax rate’ means fifteen percent (15 %); ### (12) ‘minimum tax rate’ means at least fifteen percent (15 %);


### a stand-alone institution in the eu and , for the purposes of complying with the obligations of this regulation on the basis of its consolidated situation in accordance with part one , title ii , chapter 2 , an eu parent institution , an eu parent financial holding company and an eu parent mixed financial holding company shall calculate the total risk exposure amount as follows: ### institutions shall calculate the total risk exposure amount as follows:


### a stand-alone institution in the eu and , for the purposes of complying with the obligations of this regulation on the basis of its consolidated situation in accordance with part one , title ii , chapter 2 , an eu parent institution , an eu parent financial holding company and an eu parent mixed financial holding company shall calculate the total risk exposure amount as follows: ### for the purposes of complying with the obligations of this regulation institutions shall calculate the total risk exposure amount as follows:


### for the purposes set out in points (i) and (ii) , the total risk exposure amount shall be calculated in accordance with paragraph 6: ### deleted


### for the purposes of complying with the obligations of this regulation on an individual basis , the total risk exposure amount of an institution which is neither a stand-alone institution in the eu nor a stand-alone subsidiary institution in a member state shall be the un-floored total risk exposure amount calculated in accordance with paragraph 4. ### deleted


### 6. the total risk exposure amount of an entity ‘i’ for the purposes set out in paragraph 3 , point (b) , shall be calculated as follows: ### deleted


### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and strategy of the institutions , with the relevant union policy objectives or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors.; ### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and strategy of the institutions , with the relevant union policy objectives or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors. these plans shall outline the institution's pathway to reduce financed emissions by 55% in 2030 compared to 1990 levels and to have net 0 financed emissions by 2050. these plans shall also outline the institution's pathway to end financing of activities that do significant harm to environmental objectives as stipulated in article 17 of regulation (eu) 2019/852 , reducing the exposure to such activities by at least 50% by 2035 compared to current levels.


### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and strategy of the institutions , with the relevant union policy objectives or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors.; ### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and activities of the institutions , with the objective to achieve climate neutrality by 2050 at the latest , set out in regulation (eu) 2021/1119 of the european parliament and of the council of 30 june 2021 (“european climate law”) , as well as other relevant union policy objectives in relation to environmental , social and governance factors.;


### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and strategy of the institutions , with the relevant union policy objectives or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors.; ### member states shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short , medium and long-term from the misalignment of the business model and strategy of the institutions , with the regulation (eu) 2021/1119 (european climate law) , and other relevant union policy objectives or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors.


### 4. competent authorities shall assess and monitor developments of institutions’ practices concerning their environmental , social and governance strategy and risk management , including the plans to be prepared in accordance with article 76 , as well as the progress made and the risks to adapt their business models to the relevant policy objectives of the union or broader transition trends towards a sustainable economy , taking into account sustainability related product offering , transition finance policies , related loan origination policies , and environmental , social and governance related targets and limits. ### 4. competent authorities shall assess and monitor developments of institutions’ practices concerning their environmental , social and governance strategy and risk management , including the plans to be prepared in accordance with article 76 , as well as the progress made and the risks towards achieving the targets set in accordance with article 76 in order to adapt their business models to the relevant policy objectives of the union or broader transition trends towards a sustainable economy , taking into account sustainability related product offering , transition finance policies , related loan origination policies , and environmental , social and governance related targets and limits.


### 4. competent authorities shall assess and monitor developments of institutions’ practices concerning their environmental , social and governance strategy and risk management , including the plans to be prepared in accordance with article 76 , as well as the progress made and the risks to adapt their business models to the relevant policy objectives of the union or broader transition trends towards a sustainable economy , taking into account sustainability related product offering , transition finance policies , related loan origination policies , and environmental , social and governance related targets and limits. ### 4. competent authorities shall assess and monitor developments of institutions’ practices concerning their environmental , social and governance strategy and risk management , including the plans to be prepared in accordance with article 76 , as well as the progress made towards achieving the targets set in accordance with article 76 in order to adapt their business models to the relevant policy objectives of the union , taking into account sustainability related product offering , transition finance policies , related loan origination policies , and environmental , social and governance related targets and limits.


### minimum standards and reference methodologies for the identification , measurement , management and monitoring of environmental , social and governance risks; ### deleted


### the content of plans to be prepared in accordance with article 76 , which shall include specific timelines and intermediate quantifiable targets and milestones , in order to address the risks from misalignment of the business model and strategy of institutions with the relevant policy objectives of the union , or broader transition trends towards a sustainable economy in relation to environmental , social and governance factors; ### the content of plans to be prepared in accordance with article 76 , which shall include specific timelines and intermediate quantifiable targets and milestones , in order to address the risks from misalignment of the business model and strategy of institutions with the objective to achieve climate neutrality by 2050 at the latest , set out in regulation(eu) 2021/1119 of the european parliament and of the council of 30june 2021 (“european climate law”) , as well as other relevant policy objectives of the union;


### 1. institutions and financial holding companies and mixed financial holding companies , as approved pursuant to article 21a(1) ,(“the entities”) , shall have the primary responsibility for ensuring that members of the management body are at all times of good repute and possess sufficient knowledge , skills and experience to perform their duties and fulfil the requirements set out in paragraphs 2 to 8 of this article. ### 1. institutions and financial holding companies and mixed financial holding companies , as approved pursuant to article 21a(1) ,(“the entities”) , shall have the primary responsibility for ensuring that members of the management body are at all times of good repute , act with honesty , integrity and independence and possess sufficient knowledge , skills and experience to perform their duties and fulfil the requirements set out in paragraphs 2 to 8 of this article. the absence of a criminal conviction or of ongoing prosecutions for a criminal offence shall not in itself be sufficient to fulfil the requirement to be of good repute and act with honesty and integrity.


### executive or non-executive directorships held within the same group. ### executive or non-executive directorships held within the same group and/or in undertakings , including non-financial entities , in which the group holding company holds a qualifying holding when the relevant person is also a director in the group holding company.


### 13. this article and articles 91a to 91d shall be without prejudice to provisions of the member states on the representation of employees in the management body.’; ### 13. this article and articles 91a to 91d shall be without prejudice to provisions of the member states on the representation of employees in the management body and on the management body in its supervisory function as provided for by national law.’;


### 2. the entities shall assess the suitability of members of the management body before those members take up their positions. where the entities conclude , based on the suitability assessment , that the member concerned does not fulfil the criteria and requirements set out in paragraph 1 , the entities shall ensure that the member concerned does not take up the position considered. ### 2. the entities shall assess the suitability of members of the management body before those members take up their positions. by derogation from the first sentence , in case of members of the management body in its supervisory function the assessment can be performed before those members take up their positions or alternatively without undue delay after the appointment. where the entities conclude , based on the suitability assessment , that the member concerned does not fulfil the criteria and requirements set out in paragraph 1 , the entities shall either take measures to mitigate and solve the discrepancy within an appropriate time or ensure that the member concerned does not take up the position considered. if these measures are not successful or according to corporate law not possible , the entity has to inform the competent authority without undue delay.


### however , where it is strictly necessary to replace a member of the management body immediately , the entities may assess the suitability of such replacement members after they have taken up their positions. the entities shall be able to duly justify such immediate replacement. ### deleted


### however , where it is strictly necessary to replace a member of the management body immediately , the entities may assess the suitability of such replacement members after they have taken up their positions. the entities shall be able to duly justify such immediate replacement. ### however , where it is strictly necessary to replace a member of the management body immediately , the entities may assess the suitability of such replacement members after they have taken up their positions. the entities shall duly justify the need for such immediate replacement , and carry out a full assessment after the replacement members have taken up their positions.


### 4. the entities that renew the mandate of members of the management body shall inform in writing the competent authorities within 15 working days of the date of that renewal of the mandate. ### 4. the entities that renew the mandate of members of the management body shall inform the competent authorities with undue delay , the latest within 15 working days of the date of that renewal of the mandate.


### competent authorities shall acknowledge in writing the receipt of the application and the documentation required in accordance with paragraph 2 within two working days. ### deleted


### 3. competent authorities shall acknowledge in writing the receipt of the application and the documentation required in accordance with paragraph 2 within two working days. ### 3. competent authorities shall acknowledge in writing the receipt of the application and the documentation required in accordance with paragraph as soon as possible.


### competent authorities shall complete the assessment referred to in paragraph 1 within 80 working days (‘assessment period’) as from the date of the written acknowledgement referred to in the first subparagraph of this paragraph. ### deleted


### 4. competent authorities that request from the entities additional information or documentation , including interviews or hearings , may extend the assessment period for a maximum of 40 working days. however , the assessment period shall not exceed 120 working days. request for additional information or documentation shall be made in writing and shall be specific. the entities shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. ### deleted


### 4. competent authorities that request from the entities additional information or documentation , including interviews or hearings , may extend the assessment period for a maximum of 40 working days. however , the assessment period shall not exceed 120 working days. request for additional information or documentation shall be made in writing and shall be specific. the entities shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. ### 4. competent authorities that request additional information or documentation from the entities or other authorities or which conduct interviews or hearings , may extend the assessment period for a maximum of 40 working days. however , the assessment period shall not exceed 120 working days. request for additional information or documentation shall be made in writing and shall be specific. the entities shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. failure by the entities to provide the requested information within this deadline shall result in the procedure being closed without any further assessment by the competent authority. the closure of the procedure shall be without prejudice to the possibility for the entity to submit a new application.


### 5. as soon as any new facts or other issues that may affect the suitability of the member of the management body are known to the entities or the relevant member of the management body , the entities shall inform without undue delay the relevant competent authorities thereof. ### deleted


### 6. competent authorities shall not reassess the suitability of members of the management body when their mandate is renewed , unless relevant information that is known to competent authorities has changed and such change may affect the suitability of the member concerned. ### deleted


### 6. competent authorities shall not reassess the suitability of members of the management body when their mandate is renewed , unless relevant information that is known to competent authorities has changed and such change may affect the suitability of the member concerned. ### 6. where the competent authority becomes aware that relevant information concerning the suitability of the member of the management body has changed and such change may affect the suitability of the member concerned , the competent authority shall reassess the suitability of the member of the management. competent authorities shall not automatically reassess the suitability of members of the management body when their mandate is renewed.


### 7. where members of the management body do not fulfil the requirements set out in article 91(1) to (8) at all times or where the entities do not comply with the obligations and deadlines laid down in paragraphs 2 or 4 of this article , member states shall ensure that competent authorities have the necessary powers to: ### 7. where members of the management body do not fulfil the requirements set out in article 91(1) to (8) at all times , member states shall ensure that competent authorities have the necessary powers to:


### prevent such members to be part of the management body; ### prevent members of the management body from carrying out activities;


### remove such members from the management body; ### remove such members from the management body , in urgent cases without a suspensive effect of formal objections or legal proceedings by the entity or the person itself;


### remove such members from the management body; ### suspend or remove such members from the management body;


### 8. in accordance with paragraphs 1 to 7 , competent authorities shall carry out the suitability assessment before members of the management body take up their positions in the following entities: ### deleted


### however , where it is strictly necessary to replace a member of the management body immediately , competent authorities may carry out the suitability assessment of members of the management body after they take up their positions. the entities shall be able to duly justify such immediate replacement. ### however , where it is strictly necessary to replace a member of the management body immediately , competent authorities may carry out the suitability assessment of members of the management body after they take up their positions. the entities shall duly justify the need for such immediate replacement.


### 9. for the purposes of paragraph 2 , eba shall develop draft regulatory technical standards specifying information or accompanying documents required to be submitted to the competent authorities for performing the suitability assessment. ### deleted


### 10. eba shall develop draft implementing technical standards on standard forms , templates and procedures for the provision of the information referred to in paragraph 2. ### deleted


### 10. eba shall develop draft implementing technical standards on standard forms , templates and procedures for the provision of the information referred to in paragraph 2. ### 10. eba shall develop draft implementing technical standards on standard forms , templates and procedures for the provision of the information referred to in paragraph 2. when developing the draft implementing technical standards , eba shall take into account existing practices and tools.


### 3. competent authorities shall acknowledge in writing the receipt of the application and the documentation required in accordance with paragraph 2 within two working days. ### 3. competent authorities shall acknowledge in writing the receipt of the application and the documentation required in accordance with paragraph 2 as soon as possible.


### 4. competent authorities that request from the entities referred to paragraph 1 additional information or documentation , including interviews or hearings , may extend the assessment period for maximum 40 working days. however , the assessment period shall not exceed 120 working days. request for additional information or documentation shall be made in writing and shall be specific. the entities referred to paragraph 1 shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. ### 4. competent authorities that request additional information or documentation from the entities referred to in paragraph 1 or from other authorities or which conduct interviews or hearings , may extend the assessment period for maximum 40 working days. however , the assessment period shall not exceed 120 working days. request for additional information or documentation shall be made in writing and shall be specific. the entities referred to paragraph 1 shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. failure by the entities to provide the requested information within this deadline shall result in the procedure being closed without any further assessment by the competent authority. the closure of the procedure shall be without prejudice to the possibility for the entity to submit a new application.


### 5. as soon as any new facts or other issues that may affect the suitability of the member of the management body are known to the entities referred to in paragraph 1 or the relevant member of the management body , the entities referred to in that paragraph shall inform without undue delay the relevant competent authorities thereof. ### 5. as soon as any new facts or other issues that may affect the suitability of the heads of internal control functions and the chief financial officer are known to the entities referred to in paragraph 1 or the relevant member of the management body , the entities referred to in that paragraph shall inform without undue delay the relevant competent authorities thereof. where the competent authority becomes aware that relevant information concerning the suitability of the heads of internal control functions and the chief financial officer has changed and such change may affect the suitability of the heads or officer concerned , the competent authority shall reassess their suitability.


### remove such heads or officer; ### suspend or remove such heads or officer;


### 8. eba shall develop draft implementing technical standards on standard forms , templates and procedures for the provision of the information referred to in paragraph 2. ### 8. eba shall develop draft implementing technical standards on standard forms , templates and procedures for the provision of the information referred to in paragraph 2. when developing the draft implementing technical standards , eba shall take into account existing practices and tools.


### 9. the review and evaluation performed by competent authorities shall include the assessment of institutions’ governance and risk management processes for dealing with environmental , social and governance risks , as well as of the institutions’ exposures to environmental , social and governance risks. in determining the adequacy of institutions’ processes and exposures , competent authorities shall take into account the business models of those institutions.; ### 9. the review and evaluation performed by competent authorities shall include:


### (1) the commission’s communication on a digital finance strategy32 aims to ensure that the union’s financial services legislation is fit for the digital age , and contributes to a future-ready economy that works for the people , including by enabling the use of innovative technologies. the union has a stated and confirmed policy interest in developing and promoting the uptake of transformative technologies in the financial sector , including blockchain and distributed ledger technology (dlt). ### (1) the commission’s communication on a digital finance strategy32 aims to ensure that the union’s financial services legislation is fit for the digital age , and contributes to a future-ready economy that works for the people , including by enabling the use of innovative technologies. the union has a stated and confirmed policy interest in developing and promoting the uptake of transformative technologies in the financial sector , including blockchain and distributed ledger technology (dlt) , provided this transformation is fully in line with the objectives of the eu green deal and based on climate friendly technologies.


### (2) in finance , crypto-assets are one of the major dlt applications. crypto-assets are digital representations of value or rights that have the potential to bring significant benefits to both market participants and consumers. by streamlining capital-raising processes and enhancing competition , issuances of crypto-assets can allow for a cheaper , less burdensome and more inclusive way of financing small and medium-sized enterprises (smes). when used as a means of payment , payment tokens can present opportunities in terms of cheaper , faster and more efficient payments , in particular on a cross-border basis , by limiting the number of intermediaries. ### (2) in finance , crypto-assets are one of the major dlt applications. crypto-assets are digital representations of value or rights that have the potential to bring significant benefits to both market participants and consumers. by streamlining capital-raising processes and enhancing competition , issuances of crypto-assets can allow for a cheaper , less burdensome and more inclusive way of financing small and medium-sized enterprises (smes). blockchain is also a ground-breaking technology that will open a wide range of options for start-ups and smes and that can also improve the public sector services for the citizens. when used as a means of payment , payment tokens can present opportunities in terms of cheaper , faster and more efficient payments , in particular on a cross-border basis , by limiting the number of intermediaries.


### (4) the lack of an overall union framework for crypto-assets can lead to a lack of users’ confidence in those assets , which will hinder the development of a market in those assets and can lead to missed opportunities in terms of innovative digital services , alternative payment instruments or new funding sources for union companies. in addition , companies using crypto-assets will have no legal certainty on how their crypto-assets will be treated in the different member states , which will undermine their efforts to use crypto-assets for digital innovation. the lack of an overall union framework on crypto-assets could also lead to regulatory fragmentation , which will distort competition in the single market , make it more difficult for crypto-asset service providers to scale up their activities on a cross-border basis and will give rise to regulatory arbitrage. the crypto-asset market is still modest in size and does not yet pose a threat to financial stability. it is , however , likely that a subset of crypto-assets which aim to stabilise their price by linking their value to a specific asset or a basket of assets could be widely adopted by consumers. such a development could raise additional challenges to financial stability , monetary policy transmission or monetary sovereignty. ### (4) the lack of an overall union framework for crypto-assets can lead to a lack of users’ confidence in those assets , which will hinder the development of a market in those assets and can lead to missed opportunities in terms of innovative digital services , alternative payment instruments or new funding sources for union companies. the eu should be a global leader on this matter and should provide adequate funding for this technology while being prudent with the risks associated with this technology. in addition , companies using crypto-assets will have no legal certainty on how their crypto-assets will be treated in the different member states , which will undermine their efforts to use crypto-assets for digital innovation. the lack of an overall union framework on crypto-assets could also lead to regulatory fragmentation , which will distort competition in the single market , make it more difficult for crypto-asset service providers to scale up their activities on a cross-border basis and will give rise to regulatory arbitrage. the crypto-asset market is still modest in size and does not yet pose a threat to financial stability. it is , however , likely that a subset of crypto-assets which aim to stabilise their price by linking their value to a specific asset or a basket of assets could be widely adopted by consumers. such a development could raise additional challenges to financial stability , monetary policy transmission or monetary sovereignty.


### (5) a dedicated and harmonised framework is therefore necessary at union level to provide specific rules for crypto-assets and related activities and services and to clarify the applicable legal framework. such harmonised framework should also cover services related to crypto-assets where these services are not yet covered by union legislation on financial services. such a framework should support innovation and fair competition , while ensuring a high level of consumer protection and market integrity in crypto-asset markets. a clear framework should enable crypto-asset service providers to scale up their business on a cross-border basis and should facilitate their access to banking services to run their activities smoothly. it should also ensure financial stability and address monetary policy risks that could arise from crypto-assets that aim at stabilising their price by referencing a currency , an asset or a basket of such. while increasing consumer protection , market integrity and financial stability through the regulation of offers to the public of crypto-assets or services related to such crypto-assets , a union framework on markets in crypto-assets should not regulate the underlying technology and should allow for the use of both permissionless and permission-based distributed ledgers. ### (5) a dedicated and harmonised framework is therefore necessary at union level to provide specific rules for crypto-assets and related activities and services and to clarify the applicable legal framework. such harmonised framework should also cover services related to crypto-assets where these services are not yet covered by union legislation on financial services. such a framework should support innovation and fair competition , while ensuring a high level of consumer protection and market integrity in crypto-asset markets. a clear framework should enable crypto-asset service providers to scale up their business on a cross-border basis and should facilitate their access to banking services to run their activities smoothly. it should also ensure financial stability and address monetary policy risks that could arise from crypto-assets that aim at stabilising their price by referencing a currency , an asset or a basket of such. while increasing consumer protection , market integrity and financial stability through the regulation of offers to the public of crypto-assets or services related to such crypto-assets , a union framework on markets in crypto-assets should ensure that the underlying technology are climate friendly and in line with the eu green deal objectives.


### (7) crypto-assets issued by central banks acting in their monetary authority capacity or by other public authorities should not be subject to the union framework covering crypto-assets , and neither should services related to crypto-assets that are provided by such central banks or other public authorities. ### (7) crypto-assets and central bank money issued based on dlt or in digital form by central banks acting in their monetary authority capacity or by other public authorities should not be subject to the union framework covering crypto-assets , and neither should services related to crypto-assets and central bank money issued based on dlt or in digital form that are provided by such central banks or other public authorities.’


### (9) a distinction should be made between three sub-categories of crypto-assets , which should be subject to more specific requirements. the first sub-category consists of a type of crypto-asset which is intended to provide digital access to a good or service , available on dlt , and that is only accepted by the issuer of that token (‘utility tokens’). such ‘utility tokens’ have non-financial purposes related to the operation of a digital platform and digital services and should be considered as a specific type of crypto-assets. a second sub-category of crypto-assets are ‘asset-referenced tokens’. such asset-referenced tokens aim at maintaining a stable value by referencing several currencies that are legal tender , one or several commodities , one or several crypto-assets , or a basket of such assets. by stabilising their value , those asset-referenced tokens often aim at being used by their holders as a means of payment to buy goods and services and as a store of value. a third sub-category of crypto-assets are crypto-assets that are intended primarily as a means of payment aim at stabilising their value by referencing only one fiat currency. the function of such crypto-assets is very similar to the function of electronic money , as defined in in article 2 , point 2 , of directive 2009/110/ec of the european parliament and of the council35 . like electronic money , such crypto-assets are electronic surrogates for coins and banknotes and are used for making payments. these crypto-assets are defined as ‘electronic money tokens’ or ‘e-money tokens’. ### (9) a distinction should be made between three sub-categories of crypto-assets , which should be subject to more specific requirements. the first sub-category consists of a type of crypto-asset which is intended to provide digital access to a good or service , available on dlt , and that is only accepted by the issuer of that token (‘utility tokens’). such ‘utility tokens’ have non-financial purposes related to the operation of a digital platform and digital services and should be considered as a specific type of crypto-assets. a second sub-category of crypto-assets are ‘asset-referenced tokens’. such asset-referenced tokens aim at maintaining a stable value by referencing several currencies that are legal tender , one or several commodities or a basket of such assets. by stabilising their value , those asset-referenced tokens often aim at being used by their holders as a means of payment to buy goods and services and as a store of value. a third sub-category of crypto-assets are crypto-assets that are intended primarily as a means of payment aim at stabilising their value by referencing only one fiat currency. the function of such crypto-assets is very similar to the function of electronic money , as defined in in article 2 , point 2 , of directive 2009/110/ec of the european parliament and of the council35 . like electronic money , such crypto-assets are electronic surrogates for coins and banknotes and are used for making payments. these crypto-assets are defined as ‘electronic money tokens’ or ‘e-money tokens’.


### (10) despite their similarities , electronic money and crypto-assets referencing a single fiat currency differ in some important aspects. holders of electronic money as defined in article 2 , point 2 , of directive 2009/110/ec are always provided with a claim on the electronic money institution and have a contractual right to redeem their electronic money at any moment against fiat currency that is legal tender at par value with that currency. by contrast , some of the crypto-assets referencing one fiat currency which is legal tender do not provide their holders with such a claim on the issuers of such assets and could fall outside the scope of directive 2009/110/ec. other crypto-asset referencing one fiat currency do not provide a claim at par with the currency they are referencing or limit the redemption period. the fact that holders of such crypto-assets do not have a claim on the issuers of such assets , or that such claim is not at par with the currency those crypto-assets are referencing , could undermine the confidence of users of those crypto-assets. to avoid circumvention of the rules laid down in directive 2009/110/ec , any definition of ‘e-money tokens’ should be as wide as possible to capture all the types of crypto-assets referencing one single fiat currency that is legal tender. to avoid regulatory arbitrage , strict conditions on the issuance of e-money tokens should be laid down , including the obligation for such e-money tokens to be issued either by a credit institution as defined in regulation (eu) no 575/2013 of the european parliament and of the council36 , or by an electronic money institution authorised under directive 2009/110/ec. for the same reason , issuers of such e-money tokens should also grant the users of such tokens with a claim to redeem their tokens at any moment and at par value against the currency referencing those tokens. because e-money tokens are also crypto-assets and can also raise new challenges in terms of consumer protection and market integrity specific to crypto-assets , they should also be subject to rules laid down in this regulation to address these challenges to consumer protection and market integrity. ### (10) to avoid circumvention of the rules laid down in directive 2009/110/ec , any definition of ‘e-money tokens’ should be as wide as possible to capture all the types of crypto-assets referencing one single fiat currency that is legal tender. to avoid regulatory arbitrage , strict conditions on the issuance of e-money tokens should be laid down , including the obligation for such e-money tokens to be issued either by a credit institution as defined in regulation (eu) no 575/2013 of the european parliament and of the council36 , or by an electronic money institution authorised under directive 2009/110/ec. holders of electronic money as defined in article 2 , point 2 , of directive 2009/110/ec are always provided with a claim on the electronic money institution and have a contractual right to redeem their electronic money at any moment against fiat currency that is legal tender at par value with that currency. because e-money tokens are also crypto-assets and can also raise new challenges in terms of consumer protection and market integrity specific to crypto-assets , they should also be subject to rules laid down in this regulation to address these challenges to consumer protection and market integrity.


### (12) it is necessary to lay down specific rules for entities that provide services related to crypto-assets. a first category of such services consist of ensuring the operation of a trading platform for crypto-assets , exchanging crypto-assets against fiat currencies that are legal tender or other crypto-assets by dealing on own account , and the service , on behalf of third parties , of ensuring the custody and administration of crypto-assets or ensuring the control of means to access such crypto-assets. a second category of such services are the placing of crypto-assets , the reception or transmission of orders for crypto-assets , the execution of orders for crypto-assets on behalf of third parties and the provision of advice on crypto-assets. any person that provides such crypto-asset services on a professional basis should be considered as a ‘crypto-asset service provider’. ### (12) it is necessary to lay down specific rules for entities that provide services related to crypto-assets. a first category of such services consist of ensuring the operation of a trading platform for crypto-assets , exchanging crypto-assets against fiat official currencies that are legal tender or other crypto-assets by dealing on own account , and the service , on behalf of third parties , of ensuring the custody and administration of crypto assets or ensuring the control of means to access to such crypto-assets. a second category of such services are the placing of crypto-assets , the reception or transmission of orders for crypto-assets , the execution of orders for crypto-assets on behalf of third parties and the provision of advice on crypto-assets. any person that provides such crypto-asset services on a professional basis should be considered as a ‘crypto-asset service provider’.


### (13) to ensure that all offers to the public of crypto-assets , other than asset-referenced tokens or e-money tokens , in the union , or all the admissions of such crypto-assets to trading on a trading platform for crypto-assets are properly monitored and supervised by competent authorities , all issuers of crypto-assets should be legal entities. ### (13) to ensure that all offers to the public of crypto-assets , other than asset-referenced tokens or e-money tokens , in the union , or all the admissions of such crypto-assets to trading on a trading platform for crypto-assets are properly monitored and supervised by competent authorities , all issuers of crypto-assets should be legal entities whose corporate structure should not incorporate entities established in either non cooperative jurisdictions for tax purposes or high risk third countries.


### (13) to ensure that all offers to the public of crypto-assets , other than asset-referenced tokens or e-money tokens , in the union , or all the admissions of such crypto-assets to trading on a trading platform for crypto-assets are properly monitored and supervised by competent authorities , all issuers of crypto-assets should be legal entities. ### (13) to ensure that all offers to the public of crypto-assets , other than asset-referenced tokens or e-money tokens , in the union , or all the admissions of such crypto-assets to trading on a trading platform for crypto-assets are properly monitored and supervised by competent authorities , all issuers of crypto-assets should be legal entities. the european commission needs to address crypto-currency mining and should monitor crypto-currency mining activities in the eu while initiating information campaigns for citizens with regard to miners that use computer resources of users without their consent.


### (14) in order to ensure consumer protection , prospective purchasers of crypto-assets should be informed about the characteristics , functions and risks of crypto-assets they intend to purchase. when making a public offer of crypto-assets in the union or when seeking admission of crypto-assets to trading on a trading platform for crypto-assets , issuers of crypto-assets should produce , notify to their competent authority and publish an information document (‘a crypto-asset white paper’) containing mandatory disclosures. such crypto-asset white paper should contain general information on the issuer , on the project to be carried out with the capital raised , on the public offer of crypto-assets or on their admission to trading on a trading platform for crypto-assets , on the rights and obligations attached to the crypto-assets , on the underlying technology used for such assets and on the related risks. to ensure fair and non-discriminatory treatment of holders of crypto-assets , the information in the crypto-asset white paper , and where applicable in any marketing communications related to the public offer , shall be fair , clear and not misleading. ### (14) in order to ensure consumer protection , prospective purchasers of crypto-assets should be informed about the characteristics , functions and risks of crypto-assets they intend to purchase. when making a public offer of crypto-assets in the union or when seeking admission of crypto-assets to trading on a trading platform for crypto-assets , issuers of crypto-assets should produce , notify to their competent authority and publish an information document (‘a crypto-asset white paper’) containing mandatory disclosures. such crypto-asset white paper should contain general information on the issuer , on the project to be carried out with the capital raised , on the public offer of crypto-assets or on their admission to trading on a trading platform for crypto-assets , on the rights and obligations attached to the crypto-assets , on the underlying technology used for such assets and on the related risks. to ensure fair and non-discriminatory treatment of holders of crypto-assets , the information in the crypto-asset white paper , and where applicable in any marketing communications related to the public offer , shall be fair , clear and not misleading. this white paper should be approved by the competent authority.


### (15) in order to ensure a proportionate approach , the requirements to draw up and publish a crypto-asset white paper should not apply to offers of crypto-assets , other than asset-referenced tokens or e-money tokens , that are offered for free , or offers of crypto-assets that are exclusively offered to qualified investors as defined in article 2 , point (e) , of regulation (eu) 2017/1129 of the european parliament and of the council37 and can be exclusively held by such qualified investors , or that , per member state , are made to a small number of persons , or that are unique and not fungible with other crypto-assets. ### deleted


### (16) small and medium-sized enterprises and start-ups should not be subject to excessive administrative burdens. offers to the public of crypto-assets in the union that do not exceed an adequate aggregate threshold over a period of 12 months should therefore be exempted from the obligation to draw up a crypto-asset white paper. however , eu horizontal legislation ensuring consumer protection , such as directive 2011/83/eu of the european parliament and of the council38 , directive 2005/29/ec of the european parliament and of the council39 or the council directive 93/13/eec of 5 april 1993 on unfair terms in consumer contracts40 , including any information obligations contained therein , remain applicable to these offers to the public of crypto-assets where involving business-to-consumer relations. ### (16) small and medium-sized enterprises and start-ups should not be subject to excessive administrative burdens. however , eu horizontal legislation ensuring consumer protection , such as directive 2011/83/eu of the european parliament and of the council38 , directive 2005/29/ec of the european parliament and of the council39 or the council directive 93/13/eec of 5 april 1993 on unfair terms in consumer contracts40 , including any information obligations contained therein , remain applicable to these offers to the public of crypto-assets where involving business-to-consumer relations.


### (19) undue administrative burdens should be avoided. competent authorities should therefore not be required to approve a crypto-asset white paper before its publication. competent authorities should , however , after publication , have the power to request that additional information is included in the crypto-asset white paper , and , where applicable , in the marketing communications. ### (19) although undue administrative burdens should be avoided , a crypto-asset white paper should be approved by the competent authority before its publication. furthermore , competent authorities should , after publication , have the power to request that additional information is included in the crypto-asset white paper , and , where applicable , in the marketing communications.


### (21) crypto-asset white papers and , where applicable , marketing communications that have been duly notified to a competent authority should be published , after which issuers of crypto-assets should be allowed to offer their crypto-assets throughout the union and to seek admission for trading such crypto-assets on a trading platform for crypto-assets. ### (21) crypto-asset white papers and , where applicable , marketing communications that have been duly notified to and been approved by a competent authority should be published , after which issuers of crypto-assets should be allowed to offer their crypto-assets throughout the union and to seek admission for trading such crypto-assets on a trading platform for crypto-assets.


### (22) in order to further ensure consumer protection , the consumers who are acquiring crypto-assets , other than asset-referenced tokens or e-money tokens , directly from the issuer or from a crypto-asset service provider placing the crypto-assets on behalf of the issuer should be provided with a right of withdrawal during a limited period of time after their acquisition. in order to ensure the smooth completion of an offer to the public of crypto-assets for which the issuer has set a time limit , this right of withdrawal should not be exercised by the consumer after the end of the subscription period. furthermore , the right of withdrawal should not apply where the crypto-assets , other than asset-referenced tokens or e-money tokens , are admitted to trading on a trading platform for crypto-assets , as , in such a case , the price of such crypto-assets would depend on the fluctuations of crypto-asset markets. ### (22) in order to further ensure consumer protection , the consumers who are acquiring crypto-assets , other than asset-referenced tokens or e-money tokens , directly from the issuer or from a crypto-asset service provider placing the crypto-assets on behalf of the issuer should be provided with a right of withdrawal during a limited period of time after their acquisition. the right of withdrawal can be exercised again in case of changes to the white paper , in order to protect the consumer and this until the end of the subscription period. furthermore , the right of withdrawal should not apply where the crypto-assets , other than asset-referenced tokens or e-money tokens , are admitted to trading on a trading platform for crypto-assets , as , in such a case , the price of such crypto-assets would depend on the fluctuations of crypto-asset markets.


### (25) asset-referenced tokens aim at stabilising their value by reference to several fiat currencies , to one or more commodities , to one or more other crypto-assets , or to a basket of such assets. they could therefore be widely adopted by users to transfer value or as a means of payments and thus pose increased risks in terms of consumer protection and market integrity compared to other crypto-assets. issuers of asset-referenced tokens should therefore be subject to more stringent requirements than issuers of other crypto-assets. ### (25) asset-referenced tokens aim at stabilising their value by reference to several fiat currencies , to one or more commodities , or to a basket of such assets. they could therefore be widely adopted by users to transfer value or as a means of payments and thus pose increased risks in terms of consumer protection and market integrity compared to other crypto-assets. issuers of asset-referenced tokens should therefore be subject to more stringent requirements than issuers of other crypto-assets.


### (27) to ensure the proper supervision and monitoring of offers to the public of asset-referenced tokens , issuers of asset-referenced tokens should have a registered office in the union. ### (27) to ensure the proper supervision and monitoring of offers to the public of asset-referenced tokens , issuers of asset-referenced tokens should have a registered office in the union and its corporate structure should not incorporate entities established in either non cooperative jurisdictions for tax purposes or high risk third countries.


### (28) offers to the public of asset-referenced tokens in the union or seeking an admission of such crypto-assets to trading on a trading platform for crypto-assets should be possible only where the competent authority has authorised the issuer of such crypto-assets and approved the crypto-asset white paper regarding such crypto-assets. the authorisation requirement should however not apply where the asset-referenced tokens are only offered to qualified investors , or when the offer to the public of asset-referenced tokens is below a certain threshold. credit institutions authorised under directive 2013/36/eu of the european parliament and of the council41 should not need another authorisation under this regulation in order to issue asset-referenced tokens. in those cases , the issuer of such asset-referenced tokens should be still required to produce a crypto-asset white paper to inform buyers about the characteristics and risks of such asset-referenced tokens and to notify it to the relevant competent authority , before publication. ### (28) offers to the public of asset-referenced tokens in the union or seeking an admission of such crypto-assets to trading on a trading platform for crypto-assets should be possible only where the competent authority has authorised the issuer of such crypto-assets and approved the crypto-asset white paper regarding such crypto-assets.


### (29) a competent authority should refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should consult the eba and esma and , where the asset-referenced tokens is referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with a non-binding opinion on the prospective issuer’s application. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements. ### (29) a competent authority should refuse authorisation where the prospective issuer of asset-referenced tokens’ business model may pose a serious threat to financial stability , monetary policy transmission and monetary sovereignty. the competent authority should consult the eba and esma and , where the asset-referenced tokens is referencing union currencies , the european central bank (ecb) and the national central bank of issue of such currencies before granting an authorisation or refusing an authorisation. the eba , esma , and , where applicable , the ecb and the national central banks should provide the competent authority with a binding opinion on the prospective issuer’s application. where authorising a prospective issuer of asset-referenced tokens , the competent authority should also approve the crypto-asset white paper produced by that entity. the authorisation by the competent authority should be valid throughout the union and should allow the issuer of asset-referenced tokens to offer such crypto-assets in the single market and to seek an admission to trading on a trading platform for crypto-assets. in the same way , the crypto-asset white paper should also be valid for the entire union , without possibility for member states to impose additional requirements.


### (30) to ensure consumer protection , issuers of asset-referenced tokens should always provide holders of asset-referenced tokens with clear , fair and not misleading information. the crypto-asset white paper on asset-referenced tokens should include information on the stabilisation mechanism , on the investment policy of the reserve assets , on the custody arrangements for the reserve assets , and on the rights provided to holders. where the issuers of asset-referenced tokens do not offer a direct claim or redemption right on the reserve assets to all the holders of such asset-referenced tokens , the crypto-asset white paper related to asset-referenced tokens should contain a clear and unambiguous warning in this respect. marketing communications of an issuer of asset-referenced tokens should also include the same statement , where the issuers do not offer such direct rights to all the holders of asset-referenced tokens. ### (30) to ensure consumer protection , issuers of asset-referenced tokens should always provide holders of asset-referenced tokens with clear , fair and not misleading information. the crypto-asset white paper on asset-referenced tokens should include information on the stabilisation mechanism , on the investment policy of the reserve assets , on the custody arrangements for the reserve assets , and on the rights provided to holders.


### (34) issuers of asset-referenced tokens should have robust governance arrangements , including a clear organisational structure with well-defined , transparent and consistent lines of responsibility and effective processes to identify , manage , monitor and report the risks to which they are or might be exposed. the management body of such issuers and their shareholders should have good repute and sufficient expertise and be fit and proper for the purpose of anti-money laundering and combatting the financing of terrorism. issuers of asset-referenced tokens should also employ resources proportionate to the scale of their activities and should always ensure continuity and regularity in the performance of their activities. for that purpose , issuers of asset-referenced tokens should establish a business continuity policy aimed at ensuring , in the case of an interruption to their systems and procedures , the performance of their core payment activities. issuers of asset-referenced tokens should also have a strong internal control and risk assessment mechanism , as well as a system that guarantees the integrity and confidentiality of information received. ### (34) issuers of asset-referenced tokens should have robust governance arrangements , including a clear organisational structure with well-defined , transparent and consistent lines of responsibility and effective processes to identify , manage , monitor and report the risks to which they are or might be exposed. the management body of such issuers and their shareholders should have good repute and sufficient expertise and be fit and proper for the purpose of anti-money laundering and combatting the financing of terrorism. issuers of asset-referenced tokens should also employ resources proportionate to the scale of their activities and should always ensure continuity and regularity in the performance of their activities. for that purpose , issuers of asset-referenced tokens should establish a business continuity policy aimed at ensuring , in the case of an interruption to their systems and procedures , the performance of their core payment activities. issuers of asset-referenced tokens should also have a strong internal control and risk assessment mechanism , as well as a system that guarantees the integrity and confidentiality of information received. information on governance arrangements should be sent together with the draft white paper to the competent authority and should be assessed during the white paper approval process.


### (35) issuers of asset-referenced tokens are usually at the centre of a network of entities that ensure the issuance of such crypto-assets , their transfer and their distribution to holders. issuers of asset-referenced tokens should therefore be required to establish and maintain appropriate contractual arrangements with those third-party entities ensuring the stabilisation mechanism and the investment of the reserve assets backing the value of the tokens , the custody of such reserve assets , and , where applicable , the distribution of the asset-referenced tokens to the public. ### (35) issuers of asset-referenced tokens are usually at the centre of a network of entities that ensure the issuance of such crypto-assets , their transfer and their distribution to holders. issuers of asset-referenced tokens should therefore be required to establish and maintain appropriate contractual arrangements with those third-party entities ensuring the stabilisation mechanism and the investment of the reserve assets backing the value of the tokens , the custody of such reserve assets , and , where applicable , the distribution of the asset-referenced tokens to the public. the corporate structure of issuers of asset referenced tokens should not incorporate entities established in either non cooperative jurisdictions for tax purposes or high risk third countries.


### (36) to address the risks to financial stability of the wider financial system , issuers of asset-referenced tokens should be subject to capital requirements. those capital requirements should be proportionate to the issuance size of the asset-referenced tokens and therefore calculated as a percentage of the reserve of assets that back the value of the asset-referenced tokens. competent authorities should however be able to increase or decrease the amount of own fund requirements required on the basis of , inter alia , the evaluation of the risk-assessment mechanism of the issuer , the quality and volatility of the assets in the reserve backing the asset-referenced tokens or the aggregate value and number of asset-referenced tokens. ### (36) to address the risks to financial stability of the wider financial system , issuers of asset-referenced tokens should be subject to capital requirements. those capital requirements should be proportionate to the issuance size of the asset-referenced tokens and therefore calculated as a percentage of the reserve of assets that back the value of the asset-referenced tokens. competent authorities should however be able to increase the amount of own fund requirements required on the basis of , inter alia , the evaluation of the risk-assessment mechanism of the issuer , the quality and volatility of the assets in the reserve backing the asset-referenced tokens or the aggregate value and number of asset-referenced tokens.


### (39) to protect holders of asset-referenced tokens against a decrease in value of the assets backing the value of the tokens , issuers of asset-referenced tokens should invest the reserve assets in secure , low risks assets with minimal market and credit risk. as the asset-referenced tokens can be used as a means of payment , all profits or losses resulting from the investment of the reserve assets should be borne by the issuer of the asset-referenced tokens. ### (39) to protect holders of asset-referenced tokens against a decrease in value of the assets backing the value of the tokens , issuers of asset-referenced tokens should invest the reserve assets in secure , low risks assets with minimal market , concentration and credit risk. as the asset-referenced tokens can be used as a means of payment , all profits or losses resulting from the investment of the reserve assets should be borne by the issuer of the asset-referenced tokens.


### (40) some asset-referenced tokens may offer all their holders rights , such as redemption rights or claims on the reserve assets or on the issuer , while other asset-referenced tokens may not grant such rights to all their holders and may limit the right of redemption to specific holders. any rules regarding asset-referenced tokens should be flexible enough to capture all those situations. issuers of asset-referenced tokens should therefore inform the holders of asset-referenced tokens on whether they are provided with a direct claim on the issuer or redemption rights. where issuers of asset-referenced tokens grant direct rights on the issuer or on the reserve assets to all the holders , the issuers should precisely set out the conditions under which such rights can be exercised. where issuers of asset-referenced tokens restrict such direct rights on the issuer or on the reserve assets to a limited number of holders of asset-referenced tokens , the issuers should still offer minimum rights to all the holders of asset-referenced tokens. issuers of asset-referenced tokens should ensure the liquidity of those tokens by concluding and maintaining adequate liquidity arrangements with crypto-asset service providers that are in charge of posting firm quotes on a predictable basis to buy and sell the asset-referenced tokens against fiat currency. where the value of the asset-referenced tokens varies significantly from the value of the reserve assets , the holders of asset-referenced tokens should have a right to request the redemption of their asset-referenced tokens against reserve assets directly from the issuer. issuers of asset-referenced tokens that voluntarily stop their operations or that are orderly wound-down should have contractual arrangements in place to ensure that the proceeds of the reserve assets are paid to the holders of asset-referenced tokens. ### (40) issuers of asset-referenced tokens should ensure the liquidity of those tokens by concluding and maintaining adequate liquidity arrangements with crypto-asset service providers that are in charge of posting firm quotes on a predictable basis to buy and sell the asset-referenced tokens against fiat currency. where the value of the asset-referenced tokens varies significantly from the value of the reserve assets , the holders of asset-referenced tokens should have a right to request the redemption of their asset-referenced tokens against reserve assets directly from the issuer. issuers of asset-referenced tokens that voluntarily stop their operations or that are orderly wound-down should have contractual arrangements in place to ensure that the proceeds of the reserve assets are paid to the holders of asset-referenced tokens.


### (50) crypto-asset services should only be provided by legal entities that have a registered office in a member state and that have been authorised as a crypto-asset service provider by the competent authority of the member state where its registered office is located. ### (50) crypto-asset services should only be provided by legal entities that have a registered office in a member state and that have been authorised as a crypto-asset service provider by the competent authority of the member state where its registered office is located and its corporate structure should not incorporate entities established in either non cooperative jurisdictions for tax purposes or high risk third countries.


### (51) this regulation should not affect the possibility for persons established in the union to receive crypto-asset services by a third-country firm at their own initiative. where a third-country firm provides crypto-asset services at the own initiative of a person established in the union , the crypto-asset services should not be deemed as provided in the union. where a third-country firm solicits clients or potential clients in the union or promotes or advertises crypto-asset services or activities in the union , it should not be deemed as a crypto-asset service provided at the own initiative of the client. in such a case , the third-country firm should be authorised as a crypto-asset service provider. ### (51) this regulation should not affect the possibility for persons established in the union to receive crypto-asset services by a third-country firm at their own exclusive initiative. where a third-country firm provides crypto-asset services at the own exclusive initiative of a person established in the union , the crypto-asset services should not be deemed as provided in the territory of the union. where a third-country firm solicits clients or potential clients in the union or promotes or advertises crypto-asset services or activities in the union , it should not be deemed as a crypto-asset service provided at the own exclusive initiative of the client. in such a case , the third-country firm should be authorised as a crypto-asset service provider. a practise whereby a third-country firm includes general clauses in its terms of business or through the use of online pop-up “i agree” boxes whereby clients state that any transaction is executed on the exclusive initiative of the client , should not deemed as an attempt to circumvent the rules of this regulation.


### (54) some firms subject to union legislation on financial services should be allowed to provide crypto-asset services without prior authorisation. credit institutions authorised under directive 2013/36/eu should not need another authorisation to provide crypto-asset services. investment firms authorised under directive 2014/65/eu to provide one or several investment services as defined under that directive similar to the crypto-asset services they intend to provide should also be allowed to provide crypto-asset services across the union without another authorisation. ### deleted


### (64) it is necessary to ensure users’ confidence in crypto-asset markets and market integrity. it is therefore necessary to lay down rules to deter market abuse for crypto-assets that are admitted to trading on a trading platform for crypto-assets. however , as issuers of crypto-assets and crypto-asset service providers are very often smes , it would be disproportionate to apply all the provisions of regulation (eu) no 596/2014 of the european parliament and of the council44 to them. it is therefore necessary to lay down specific rules prohibiting certain behaviours that are likely to undermine users’ confidence in crypto-asset markets and the integrity of crypto-asset markets , including insider dealings , unlawful disclosure of inside information and market manipulation related to crypto-assets. these bespoke rules on market abuse committed in relation to crypto-assets should be applied , where crypto-assets are admitted to trading on a trading platform for crypto-assets. ### (64) it is necessary to ensure users’ confidence in crypto-asset markets and market integrity. it is therefore necessary to lay down rules to deter market abuse for crypto-assets that are admitted to trading on a trading platform for crypto-assets.


### (77) in order to avoid disrupting market participants that provide services and activities in relation to crypto-assets that have been issued before the entry into force of this regulation , issuers of such crypto-assets should be exempted from the obligation to publish a crypto-asset white paper and other applicable requirements. however , those transitional provisions should not apply to issuers of asset-referenced tokens , issuers of e-money tokens or to crypto-asset service providers that , in any case , should receive an authorisation as soon as this regulation enters into application. ### deleted


### 1. issuers of asset-references tokens shall at all times constitute and maintain a reserve of assets. ### 1. issuers of asset-references tokens shall at all times constitute and maintain a reserve of assets. the aggregate value of reserve assets shall always be at least equal to the aggregate face value of the claims on the issuer from holders of asset-referenced tokens in circulation. for the purpose of calculating the aggregate face value of tokenholders’ claims , and for any valuation of the reserve assets under paragraph 5 , article 30(11) , point (c) of article 35(2a) , article 41 and article 42 , the face value of claims , and the value of funds and other reserve assets , including other crypto-assets , shall be expressed in the same official currency.


### contain a detailed assessment of the risks , including credit risk , market risk and liquidity risk resulting from the reserve assets; ### contain a detailed assessment of the risks , including credit risk , market risk , concentration risk and liquidity risk resulting from the reserve assets;


### describe the procedure to purchase asset-referenced tokens and to redeem such tokens against the reserve assets , and list the persons or categories of persons who are entitled to do so. ### describe the procedure to purchase asset-referenced tokens and to redeem such tokens against the reserve assets.


### 5. without prejudice to article 30(11) , issuers of asset-referenced tokens shall mandate an independent audit of the reserve assets every six months , as of the date of its authorisation as referred to in article 19. ### 5. without prejudice to article 30(11) , issuers of asset-referenced tokens shall mandate an independent audit of the reserve assets every six months , as of the date of its authorisation as referred to in article 19.


### 7. the credit institutions and crypto-asset service providers that have been appointed as custodians in accordance with paragraph 3 shall not carry out activities with regard to issuers of asset-referenced tokens that may create conflicts of interest between those issuers , the holders of the asset-referenced tokens , and themselves unless all of the following conditions have been complied with: ### 7. the credit institutions and crypto-asset service providers that have been appointed as custodians in accordance with paragraph 3 shall not carry out other activities with regard to issuers of asset-referenced tokens.


### the credit institutions or the crypto-asset service providers have functionally and hierarchically separated the performance of their custody tasks from their potentially conflicting tasks; ### deleted


### the potential conflicts of interest have been properly identified , managed , monitored and disclosed by the issuer of the asset-referenced tokens to the holders of the asset-referenced tokens , in accordance with article 28. ### deleted


### 1. issuers of asset-referenced tokens that invest a part of the reserve assets shall invest those reserve assets only in highly liquid financial instruments with minimal market and credit risk. the investments shall be capable of being liquidated rapidly with minimal adverse price effect. ### 1. issuers of asset-referenced tokens that invest a part of the reserve assets shall invest those reserve assets only in highly liquid financial instruments with minimal market , credit and concentration risk. the investments shall be capable of being liquidated rapidly with minimal adverse price effect.


### 1. issuers of asset-referenced tokens shall establish , maintain and implement clear and detailed policies and procedures on the rights granted to holders of asset-referenced tokens , including any direct claim or redemption rights on the issuer of those asset-referenced tokens or on the reserve assets. ### deleted


### 1. issuers of asset-referenced tokens shall establish , maintain and implement clear and detailed policies and procedures on the rights granted to holders of asset-referenced tokens , including any direct claim or redemption rights on the issuer of those asset-referenced tokens or on the reserve assets. ### 1. issuers of asset-referenced tokens shall redeem these tokens at the request of any holder at all times at a price that is not lower than the face value of the holder’s claim on the issuer.


### 2. where holders of asset-referenced tokens are granted rights as referred to in paragraph 1 , issuers of asset-referenced tokens shall establish a policy setting out: ### deleted


### 2. where holders of asset-referenced tokens are granted rights as referred to in paragraph 1 , issuers of asset-referenced tokens shall establish a policy setting out: ### 2. by way of derogation from paragraph 1: (a) the issuer of an asset-referenced token may , in accordance with the applicable national law and subject to the conditions set out in the crypto-asset white paper , temporarily suspend the redemption of its tokens. in the event of a temporary suspension , the issuer shall , without delay , communicate its decision to its home member state competent authorities. (b) the issuer’s home member state may allow its competent authorities to require the suspension of the redemption of tokens in the interest of the tokenholders or of the public. the temporary suspension referred to in point (a) of the first subparagraph shall be provided for only in exceptional cases where circumstances so require and where suspension is justified having regard to the interests of the tokenholders.


### the fees applied by the issuers of asset-referenced tokens when the holders exercise those rights. ### deleted


### the fees referred to in point (e) shall be proportionate and commensurate with the actual costs incurred by the issuers of asset-referenced tokens. ### deleted


### 3. where issuers of asset-referenced tokens do not grant rights as referred to in paragraph 1 to all the holders of asset-referenced tokens , the detailed policies and procedures shall specify the natural or legal persons that are provided with such rights. the detailed policies and procedures shall also specify the conditions for exercising such rights and the obligations imposed on those persons. ### deleted


### 4. issuers of asset-referenced tokens that do not grant rights as referred to in paragraph 1 to all the holders of such asset-referenced tokens shall put in place mechanisms to ensure the liquidity of the asset-referenced tokens. for that purpose , they shall establish and maintain written agreements with crypto-asset service providers authorised for the crypto-asset service referred to in article 3(1) point (12). the issuer of asset-referenced tokens shall ensure that a sufficient number of crypto-asset service providers are required to post firm quotes at competitive prices on a regular and predictable basis. ### deleted


### where the market value of asset-referenced tokens varies significantly from the value of the reference assets or the reserve assets , the holders of asset-referenced tokens shall have the right to redeem the crypto-assets from the issuer of crypto-assets directly. in that case , any fee applied for such redemption shall be proportionate and commensurate with the actual costs incurred by the issuer of asset-referenced tokens. ### deleted


### 5. the eba shall , in close cooperation with esma , develop draft regulatory technical standards specifying: ### deleted


### 1. the eba shall classify asset-referenced tokens as significant asset-referenced tokens on the basis of the following criteria , as specified in accordance with paragraph 6 and where at least three of the following criteria are met: ### 1. the eba shall classify asset-referenced tokens as significant asset-referenced tokens on the basis of the following criteria , as specified in accordance with paragraph 6 and where at least two of the following criteria are met:


### 3. issuers of significant asset-referenced tokens shall assess and monitor the liquidity needs to meet redemption requests or the exercise of rights , as referred to in article 34 , by holders of asset-referenced tokens. for that purpose , issuers of significant asset-referenced tokens shall establish , maintain and implement a liquidity management policy and procedures. that policy and those procedures shall ensure that the reserve assets have a resilient liquidity profile that enable issuer of significant asset-referenced tokens to continue operating normally , including under liquidity stressed scenarios. ### 3. issuers of significant asset-referenced tokens shall assess and monitor the liquidity needs to meet redemption requests or the exercise of rights , as referred to in article 34 , by holders of asset-referenced tokens. for that purpose , issuers of significant asset-referenced tokens shall establish , maintain and implement a liquidity management policy and procedures. that policy and those procedures shall ensure that the reserve assets have a resilient liquidity profile that enable issuer of significant asset-referenced tokens to continue operating normally , including under liquidity stressed scenarios.


### 4. the percentage referred to in article 31(1) , point (b) , shall be set at 3% of the average amount of the reserve assets for issuers of significant asset-referenced tokens. ### 4. the percentage referred to in article 31(1) ,point (b) , shall be set at 3 % of the average amount of the reserve assets for issuers of significant asset-referenced tokens. in addition , issuers of significant asset-referenced tokens shall conduct , on a regular basis , stress testing that shall take into account severe but plausible financial (such as interest rate shocks) stress scenarios and non-financial(such as operational risk) stress scenarios. where an issuer of significant asset referenced tokens offers two or more categories of crypto-asset tokens and/or provides crypto-asset services , these stress tests shall cover all of these activities in a comprehensive and holistic manner. based on the outcome of such stress tests , the eba where relevant , may impose additional own funds requirements on top of the 3%requirement.


### for the purpose of point (a) , an ‘electronic money institution’ as defined in article 2(1) of directive 2009/110/ec shall be authorised to issue ‘e-money tokens’ and e-money tokens shall be deemed to be ‘electronic money’ as defined in article 2(2) of directive 2009/110/ec. ### deleted


### 2. paragraph 1 shall not apply to: ### deleted


### 5. issuers of e-money tokens shall prominently state the conditions of redemption , including any fees relating thereto , in the crypto-asset white paper as referred to in article 46. ### 5. issuers of e-money tokens shall prominently state the conditions of redemption including any fees relating thereto , in the crypto-asset white paper as referred to in article 46. issuers will also refrain from issuing crypto-assets on a protocol that uses a proof-of-work mechanism.


### 6. redemption may be subject to a fee only if stated in the crypto-asset white paper. any such fee shall be proportionate and commensurate with the actual costs incurred by issuers of e-money tokens. ### 6. redemption may be subject to a fee only if stated in the crypto-asset white paper and only in any of the following cases:


### the information on the underlying technology and standards met by the issuer of e-money tokens allowing for the holding , storing and transfer of such e-money tokens; ### the information on the underlying technology and standards met by the issuer of e-money tokens allowing for the holding , storing and transfer of such e-money tokens; as well as the guarantee that these tokens are not generated by a proof of work mechanism.


### 7. the crypto-asset white paper shall be drawn up in at least one of the official languages of the home member state or in a language customary in the sphere of international finance. ### 7. the crypto-asset white paper shall be drawn up in at least one of the official languages of the home member state and in a language customary in the sphere of international finance.


### funds received by issuers of e-money tokens in exchange of e-money tokens and that are invested in secure , low-risk assets in accordance with article 7(2) of directive 2009/110/ec shall be invested in assets denominated in the same currency as the one referenced by the e-money token. ### funds received by issuers of e-money tokens in exchange of e-money tokens and that are invested in secure , low-risk assets in accordance with article 7(2) of directive 2009/110/ec shall be invested in highly liquid financial instruments with minimal market and credit risks in accordance with article 34(4) of this regulation , instead of article 7(2) of directive2009/110/ec , denominated in the same currency as the one referenced by the e-money token.’


### 1. the eba shall classify e-money tokens as significant e-money tokens on the basis of the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , and where at least three of those criteria are met. ### 1. the eba after consultation of the ecb and the relevant central banks of member states whose currency is not the euro shall classify e-money tokens as significant e-money tokens on the basis of the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , and where at least two of those criteria are met.


### 2. competent authorities of the issuer’s home member state shall provide the eba with information on the criteria referred to in article 39(1) of this article and specified in accordance with article 39(6) on at least a yearly basis. ### 2. competent authorities of the issuer’s home member state shall provide the eba , the ecb and the relevant central banks of member states whose currency is not the euro with information on the criteria referred to in article 39(1) and specified in accordance with article 39(6) on at least a yearly basis.


### 3. where the eba is of the opinion that e-money tokens meet the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , the eba shall prepare a draft decision to that effect and notify that draft decision to the issuers of those e-money tokens and the competent authority of the issuer’s home member state. the eba shall give issuers of such e-money tokens and their competent authorities the opportunity to provide observations and comments in writing prior the adoption of its final decision. the eba shall duly consider those observations and comments. ### 3. where the eba , after consultation of the ecb and the relevant central banks of member states whose currency is not the euro , is of the opinion that e-money tokens meet the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , the eba shall prepare a draft decision to that effect and notify hat draft decision to the issuers of those e-money tokens and the competent authority of the issuer’s home member state. the eba shall give issuers of such e-money tokens and their competent authorities the opportunity to provide observations and comments in writing prior the adoption of its final decision. the eba , after consultation of the ecb and the relevant central banks of member states whose currency is not the euro , shall duly consider those observations and comments.


### 2. where , on the basis of the programme of operation , the eba is of the opinion that the e-money tokens meet the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , the eba shall prepare a draft decision to that effect and notify that draft decision to the competent authority of the issuer or applicant issuer’s home member state. ### 2. where , on the basis of the programme of operation , the eba , after consultation of the ecb and the relevant central banks of member states whose currency is not the euro , is of the opinion that the e-money tokens meet the criteria referred to in article 39(1) , as specified in accordance with article 39(6) , the eba shall prepare a draft decision to that effect and notify that draft decision to the competent authority of the issuer or applicant issuer’s home member state. the eba shall give the competent authority of the issuer or applicant issuer’s home member state the opportunity to provide observations and comments in writing prior the adoption of its final decision. the eba , after consultation of the ecb and the relevant central banks of member states whose currency is not the euro , shall duly consider those observations and comments.