ARTs revserse solicitation Flashcards
(19 cards)
What is the Reverse Solicitation Exemption under MiCA?
It allows third-country firms to provide crypto-asset services in the EU if the client exclusively initiates the request.
Under what three conditions can third-country firms offer crypto services in the EU?
(1) Obtaining a CASP license, (2) Benefiting from the 18-month transitional period, (3) Relying on the Reverse Solicitation Exemption.
Can third-country firms advertise or indirectly solicit EU clients?
No, any marketing, advertising, or indirect solicitation (even through affiliates or influencers) is prohibited.
What constitutes a valid client-initiated request under Reverse Solicitation?
The client must explicitly request the service without any prior solicitation or influence from the firm.
Can firms promote additional products or services under Reverse Solicitation?
No, except if they are (1) directly related to the original transaction and (2) of the same type.
How should firms ensure compliance with Reverse Solicitation?
Maintain records proving client-initiated requests and avoid acquiring new EU clients through targeted marketing.
How does MiCA’s Reverse Solicitation compare to MiFID II?
Both require client-initiated services, but MiCA has stricter and broader prohibitions.
How does the UK approach differ from the EU’s MiCA regime?
The UK does not allow Reverse Solicitation; firms must be FCA-authorized or fall under a specific exemption.
What are issuers of Asset-Referenced Tokens (ARTs) required to do under MiCA?
Implement policies to identify, prevent, manage, and disclose conflicts of interest.
What types of conflicts of interest must ART issuers manage?
Those between the issuer and stakeholders, reserve management, third-party service providers, and internal governance.
How should ART issuers handle potential conflicts of interest in governance?
Ensure decisions are impartial, independent, and serve the interests of token holders.
What conflicts arise in managing the reserve of ARTs?
Conflicts in investment decisions, custodianship, and dealing with third parties handling the reserve.
How must ART issuers handle third-party relationships?
Contracts must mandate third parties to comply with the issuer’s conflict-of-interest policies.
What governance measures should ART issuers implement?
Separate management and compliance functions, define clear accountability, and prevent undue influence.
What are the disclosure obligations for ART issuers?
They must publish conflicts of interest policies, risks, and mitigation steps in an accessible format and relevant languages.
What steps must ART issuers take to ensure transparency?
Regularly update conflict disclosures, make them accessible to investors, and ensure clear reporting structures.
What are the key considerations for ART issuers regarding personal transactions?
They must monitor transactions involving management or employees to prevent unfair advantages.
What obligations do ART issuers have for remuneration policies?
Compensation must not incentivize decisions that harm token holders’ interests.
How long must ART issuers keep records of conflicts of interest?
At least five years.
