MiCAR under the microscope - Part 6: Acquisition of qualifying holdings of CASPs and ART issuers

In this sixth instalment, we delve further into the regulatory framework established by MiCAR, looking at the acquisition of qualifying holdings of Issuers of Asset-Referenced Tokens (ART Issuers) and Crypto-asset Service Providers (CASPs). The acquisition of qualifying holdings in these entities is subject to a non-opposition regime by the competent authorities. The MiCAR regime, inspired by MiFID II and CRD IV, applies to both domestic and foreign investors and is similar to the regulatory frameworks for other financial entities like investment firms and credit institutions. Notably, the regime does not apply to CASPs listed under Article 60 of MiCAR, which includes financial entities such as credit institutions, MiFID II investment firms, asset management companies, central securities depositories and electronic money institutions, that remain subject to their pre-existing regulatory frameworks.

Non-opposition process and criteria

The non-opposition process requires the proposed acquirer to notify the competent authority supervising the ART Issuer or CASP. The competent authority must acknowledge receipt within two working days, and the assessment period then lasts 60 working days from this acknowledgment. During this period, the competent authority may request additional information, suspending the assessment for up to 20 working days (extendable by 30 days for non-EU acquirers). If the competent authority opposes the acquisition, it must notify the proposed acquirer within two working days, providing detailed reasons. If no opposition is made within the specified period, the acquisition is deemed approved. The assessment criteria include the reputation of the proposed acquirer, qualifications of key personnel, financial soundness, regulatory compliance, and risks related to money laundering and terrorist financing. The competent authority can oppose the acquisition based on reasonable grounds or if the information provided is incomplete or false. 

Practical considerations and recommendations

Practical considerations for investors include the importance of aggregating, at the parent level, the direct holdings of each of its subsidiaries for indirect acquisitions and the recommendation to have a prior call with the competent authority to clarify submission requirements. Although MiCAR does not mandate a pre-formal meeting with the competent authority, it is often market practice or a legal requirement in some jurisdictions. To ensure clarity and to avoid any potential disputes, investors should seek formal approval from the competent authority even if the acquisition is deemed approved after the 60 working days lapse. Additionally, the European Supervisory Authorities (ESAs) “Joint guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector”, though not formally extended to ART Issuers and CASPs, provide useful guidance to investors for determining qualifying holdings in an ART Issuer or CASP. 

For more detail, read “MiCAR under the microscope - Part 6: Acquisition of qualifying holdings of CASPs and ART Issuers”.