Commission Delegated Regulation (EU) 2024/1507 of 22 February 2024 supplementing Regulation (EU) 2023/1114 of the European Parliament and of the Council by specifying the criteria and factors to be taken into account by the European Securities Markets Authority, the European Banking Authority and competent authorities in relation to their intervention powers

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 (1), and in particular Article 103(8), Article 104(8) and Article 105(7) thereof,

Whereas:

(1) A list of criteria and factors to be taken into account by competent authorities, ESMA and the EBA in determining when there is a significant investor concern or threat to the orderly functioning and integrity of markets in crypto-assets or to the stability of the whole or part of the financial system of the Union or of at least one Member State should be established to ensure a consistent approach while permitting appropriate action to be taken where unforeseen adverse events or developments occur. The competent authorities, ESMA and the EBA should identify the criteria and factors that are relevant for a specific case, and then perform an assessment of those criteria and factors determined to be most relevant to that case. That should not prevent the competent authorities, ESMA and the EBA from using a temporary intervention power where only one of the factors or criteria leads to such a concern or threat.

(2) The provisions in this Regulation are closely linked, since they deal with the product intervention powers vested in the competent authorities, ESMA and the EBA. To ensure coherence between those provisions that should enter into force at the same time, and in order to facilitate a comprehensive view of the criteria for stakeholders and, in particular, for ESMA, the EBA and competent authorities exercising the intervention powers, it is necessary to include these provisions in a single Delegated Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Criteria and factors for the purposes of ESMA temporary intervention powers

ESMA shall take into account the following factors and criteria for the purpose of determining whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of markets in crypto-assets or to the stability of the whole or part of the financial system in the Union:

(e) the particular features or components of the crypto-asset other than an asset-referenced token or e-money token or the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens;

(k) whether there is insufficient or unreliable information about a crypto-asset other than an asset-referenced token or e-money token, provided either by the issuer or the offeror or service provider, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the crypto-asset other than an asset-referenced token or e-money token;

(l) whether the crypto-asset other than an asset-referenced token or e-money token or the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;

(m) whether the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens would significantly compromise the integrity of the price formation process in the market concerned, such that the price or value of the crypto-asset other than an asset-referenced token or e-money token in question is no longer determined according to legitimate market forces of supply and demand, or such that market participants are no longer able to rely on the prices formed in that market or in the volumes of trading as a basis for their investment decisions;

(o) whether the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens poses a particularly high risk to the resilience or smooth operation of markets and their infrastructure;

(p) whether the crypto-asset other than an asset-referenced token or e-money token or the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens poses a high risk of disruption to financial institutions deemed to be important to the financial system of the Union;

(q) the relevance of the distribution of the crypto-asset other than an asset-referenced token or e-money token as a funding source for the issuer;

(r) whether a crypto-asset other than an asset-referenced token or e-money token or an activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens poses risks to the market or its underlying infrastructure, including DLT networks used for their issuance, storage and transfer;

(s) whether a crypto-asset other than an asset-referenced token or e-money token or an activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens could threaten investors’ confidence in the financial system.

Article 2

Criteria and factors for the purposes of the EBA temporary intervention powers

The EBA shall take into account the following factors and criteria to determine whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of markets in crypto-assets or to the stability of the whole or part of the financial system in the Union:

(e) the particular features or components of the asset-referenced token or e-money token or the activity or practice related to asset-referenced tokens or e-money tokens;

(k) whether there is insufficient or unreliable information about an asset-referenced token or e-money token, provided either by the issuer or the offeror or service provider, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the asset-referenced token or e-money token;

(l) whether the asset-referenced token or e-money token or the activity or practice related to asset-referenced tokens or e-money tokens poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;

(m) whether the asset-referenced token or e-money token or the activity or practice related to asset-referenced tokens or e-money tokens would leave the Union economy vulnerable to risks;

(o) whether the activity or practice related to asset-referenced tokens or e-money tokens poses a particularly high risk to the resilience or smooth operation of markets, the payment system and their infrastructures;

(p) whether the asset-referenced token or e-money token or the activity or practice related to asset-referenced tokens or e-money tokens poses a high risk of disruption to financial institutions deemed to be important to the financial system of the Union;

(q) the relevance of the distribution of the asset-referenced token or e-money token as a funding source for the issuer;

(r) whether an asset-referenced token or e-money token or an activity or practice related to asset-referenced tokens or e-money tokens poses risks to the market or payment systems infrastructure;

(s) whether an asset-referenced token or an activity or practice related to asset-referenced tokens or e-money tokens could threaten investors’ confidence in the financial system.

Article 3

Criteria and factors for the purpose of intervention by competent authorities

Competent authorities shall take into account the following factors and criteria to determine whether there is a significant investor protection concern or a threat to the orderly functioning and integrity of markets in crypto-assets or to the stability of the whole or part of the financial system within at least one Member State:

(e) the particular features or components of the crypto-asset or the activity or practice related to crypto-assets;

(k) whether there is insufficient or unreliable information about a crypto-asset, provided either by the issuer or the offeror or service provider, to enable market participants at whom it is targeted to make an informed decision, taking into account the nature and type of the crypto-asset;

(l) whether the crypto-asset or the activity or practice related to crypto-assets poses a high risk to the performance of transactions entered into by participants or investors in the relevant market;

(m) whether the activity or practice related to crypto-assets would significantly compromise the integrity of the price formation process in the market concerned such that the price or value of the crypto-asset in question is no longer determined according to legitimate market forces of supply and demand, or such that market participants are no longer able to rely on the prices formed in that market or in the volumes of trading as a basis for their investment decisions;

(n) whether the crypto-asset or the activity or practice related to crypto-assets would leave the national economy vulnerable to risks;

(p) whether a crypto-asset or the activity or practice related to crypto-assets poses a particularly high risk to the resilience or smooth operation of markets and their infrastructure;

(q) whether the crypto-asset or the activity or practice related to crypto-assets poses a high risk of disruption to financial institutions deemed to be important to the financial system of the Member State of the relevant competent authority;

(r) the relevance of the distribution of the crypto-asset as a funding source for the issuer;

(s) whether a crypto-asset or an activity or practice related to crypto-assets poses risks to the market or payment systems infrastructure, including trading, clearing and settlement systems;

(t) whether a crypto-asset or an activity or practice related to crypto-assets could threaten investors’ confidence in the financial system.

Article 4

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 22 February 2024.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 150, 9.6.2023, p. 40, ELI: http://data.europa.eu/eli/reg/2023/1114/oj.