ESMA: posted on May 28, 2024 several Question and Answer inside MICA Regulations MIFIR and UCITS Directivei.e.
- In the context of the Markets in Crypto Assets (MiCA) Regulation;
- ESMA Q&A n. 2181/2024: Where should he publish a? CASP: which exchanges crypto-assets for cash or other crypto-assets at a “fixed price or method of determining the price of crypto-assets” as required by art. IPR 77. Where they must publish “information about the transactions they conclude, such as transaction volumes and prices”, as required by art. 77(4) of the Criminal Code
For ESMA, the CASPs providing the service cryptocurrency exchange funds or other cryptocurrencies must publish the required information in accordance with clauses 2 and 4 of art. 77, in a publicly accessible location (such as their website) that is accessible to anyone without registration.
Moreover, prices are published according to art. Section 77(2) of the MiCA must include all the elements that allow the party to clearly foresee the price at which the exchange will take place; Information published in accordance with Art. Clause 77(4), regarding the operations carried out, must remain available for a sufficient time, at least until midnight of the next working day.
- In the context of Financial Instruments Market Regulation (MiFIR).
a) As it should be accumulatorsi.e derivative contracts whereby the buyer undertakes to purchase a predetermined number of underlying financial instruments at a predetermined daily price for a certain “cumulative” period.
(b) FI shall report on individual actions was carried out at the time of settlement of the cumulative contract.
(c) The FI shall report transactions with third parties provide the financial instruments to be sold to the buyer of the accumulator?
d) come on should be reported cumulative contract?
According to ESMA.
(a) For the purpose of reporting transaction data, accumulators shall be classified as: forward or options, depending on whether or not they include option features (such as a knockout price or an exchange ratio).
b) No.
(c) and (d) yes, they should be reported, and for methods, refer to the attached table on how to report accumulators (see appendix)
- In the context of the Directive on Undertakings for Collective Investment in Transferable Securities (UCITS)
- ESMA Q&A n. 2173/2024: to be manager applies an additional reference pointer to the model performance fee (eg, a barrier rate in addition to a High-Water Mark model or a benchmark model), should a minimum performance reference period be applied to an additional reference indicator?
For ESMA the minimum execution reference periodAccording to points 40-42 of the guidelines, should be applied performance fee model.
However, the administrator is not required to apply the minimum performance reference period to the additional reference indicator, provided that:
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- that final combination (ie the performance fee model plus an additional benchmark) does not result in increased fees for investors compared to using the performance fee model alone.
- ill performance fee model (except for the additional benchmark indicator) is consistent with the fund’s objectives, strategy and investment policy in accordance with Guideline 2. According to point 46 of the guidelines, the prospectus must provide relevant information.
For ESMA, according to point 18 of the guidelines, the head of the FA must be able to: show to the NCA that the performance fee model of the fund he manages is a reasonable incentive for the manager and is consistent with investors’ interests.
In this context, as a general principle, when s investment policy of the investment fund requires active management of the fund, and the determination of allocations to the underlying funds has a significant impact on the performance of the fund, performance fees for the investment fund manager may be considered justified.
Assessment of how performance fees are justified In light of the fund’s investment policy, it should be reflected in the fund’s documents, including the fund’s rules or articles of association, and may, if necessary, be reviewed by the NCA on a case-by-case basis.
