{"release":{"id":"a4f2a0495fe55b47323883f82977a9b34ab66171ec9623e39925d3a7045b6c81","published":"2026-11-01T16:41:30Z","pinned":false},"limits":{"coverage":{"history":"current_only","held_since":"2024-03-08","gaps":[],"covered":["ESMA Q&A 2127 — Q&A — Scope of Article 3(1)(b) of DLTR [Answer Published] L3"],"not_covered":["national guidance","court decisions"]},"freshness":{"release_id":"a4f2a0495fe55b47323883f82977a9b34ab66171ec9623e39925d3a7045b6c81","release_published":"2026-11-01T16:41:30Z","checked_at":"2026-10-26","checked_against":"the ESMA publication"},"truncation":null,"failures":[],"incomplete":[]},"page":{"path":"/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr","url":"https://www.headlesslaw.com/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr","title":"ESMA Q&A 2127 — Q&A — Scope of Article 3(1)(b) of DLTR [Answer Published]","family":"l3","work_id":"spaces/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr","status":"answer published","force_status":null,"date_state":"current","requested_date":null,"as_of":"2026-11-01","applies_from":null,"application":null,"version_label":"ESMA Q&A register, 8 March 2024","check":{"against":"the ESMA publication","on":"2026-10-26"},"check_result":"matched","official_url":"https://www.esma.europa.eu/publications-data/questions-answers/2127","valid_from":"0001-01-01","valid_until":null,"revision":1,"content_id":"e4d71889e9dccd58","change_date":null,"nearest_versions":["2024-03-08"],"first_text_date":null,"correction_applies":false,"versions":["2024-03-08"],"version_url":"https://www.headlesslaw.com/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr/versions/2024-03-08","revision_url":"https://www.headlesslaw.com/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr/versions/2024-03-08/rev/e4d71889e9dccd58","versions_url":"https://www.headlesslaw.com/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr/versions","relations_url":"https://www.headlesslaw.com/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr/relations","source_line":"Answer by ESMA, published in its Q&A tool · not legislation · published 8 Mar 2024 [Answer Published]","attribution":{"prepared_by":"ESMA","published_by":"ESMA","published_in":"ESMA Q&A tool","document_type":"qa_answer","legal_nature":"not_legislation","addressees":"not stated in the document","dates":{"published_on":"2024-03-08","question_submitted_on":"2024-03-08","locators":{"published_on":"ESMA Q&A Excel export ESMA_QA_2127, column 'Esma responses', date line","question_submitted_on":"ESMA Q&A Excel export ESMA_QA_2127, column 'Date of submission'"}},"adoption":null}},"provenance":{"official_url":"https://www.esma.europa.eu/publications-data/questions-answers/2127","check":{"result":"matched","checked_at":"2026-10-26","against":"the ESMA publication"},"repo_path":"spaces/dlt-pilot/level-3/q-and-a/esma/esma-qa-2127-scope-of-article-3-1-b-of-dltr.md","body_sha256":"301382d6b706a071681f5dae6c2c74498f879a44d33934e0344e68959cba1440"},"units":[],"markdown":"---\ntitle: \"ESMA Q&A 2127 — Q&A — Scope of Article 3(1)(b) of DLTR [Answer Published]\"\nshortTitle: \"ESMA Q&A 2127 — Q&A — Scope of Article 3(1)(b) of DLTR [Answer Published]\"\nanswer_id: ESMA_QA_2127\ntopic: \"DLT financial instruments\"\nstatus: \"Answer Published\"\ntype: qa\ninstrument_type: qa\nauthority: ESMA\nbinding: false\nbinding_character: non_binding\nlegal_status: in_force\nregulation: \"DLT Pilot\"\ndlt_level3: true\nmica_level2: false\nlegal_basis: \"DLT Pilot\"\ndate: 8 March 2024\nsource_link: https://www.esma.europa.eu/publications-data/questions-answers/2127\nlifecycle: \"Answer Published\"\ntext_version: \"ESMA Q&A register, 8 March 2024\"\nsource_url: \"https://www.esma.europa.eu/publications-data/questions-answers/2127\"\ncheck_status: matched\nverified: true\nlast_checked: 2026-10-26\nchecked_against: \"the ESMA publication\"\nsource:\n  prepared_by: \"ESMA\"\n  published_by: \"ESMA\"\n  published_in: \"ESMA Q&A tool\"\n  evidence:\n    prepared_by: \"ESMA Answer\"\n    locator: \"ESMA Q&A entry ESMA_QA_2127: field 'ESMA Answer', no 'Answer provided by' line\"\ndocument_type: \"qa_answer\"\nlegal_nature: \"not_legislation\"\naddressees: \"not stated in the document\"\ndates:\n  published_on: \"2024-03-08\"\n  question_submitted_on: \"2024-03-08\"\n  locators:\n    published_on: \"ESMA Q&A Excel export ESMA_QA_2127, column 'Esma responses', date line\"\n    question_submitted_on: \"ESMA Q&A Excel export ESMA_QA_2127, column 'Date of submission'\"\nlifecycle_label: \"Answer Published\"\n---\n\n**Answer by ESMA, published in its Q&A tool · not legislation · published 8 Mar 2024 [Answer Published]**\n\n*Answer Published · ESMA Q&A register, 8 March 2024 · Checked against the ESMA publication on 26 Oct 2026 · [Official source](https://www.esma.europa.eu/publications-data/questions-answers/2127)*\n\n| | |\n|---|---|\n| **Full title** | ESMA Q&A 2127 — Q&A — Scope of Article 3(1)(b) of DLTR \\[Answer Published\\] |\n| **Prepared by** | ESMA |\n| **Published by** | ESMA, in the ESMA Q&A tool |\n| **Reference** | ESMA_QA_2127 |\n| **Document type** | Q&A |\n| **Legal nature** | Not legislation |\n| **Addressees** | Not stated in the document |\n| **Dates** | Published 8 March 2024; question submitted 8 March 2024 |\n| **Legal basis** | DLT Pilot |\n| **Related instruments** | None recorded |\n| **Text on this page** | Word for word — the full text of the ESMA publication |\n\n**Scope of Article 3(1)(b) of DLTR**\n\n### Question\n\nHow should the following provision in Art. 3(1)(b) of DLTR (on the admissibility of bonds and other forms of securitised debt) be understood: “\\[...\\] excluding those that embed a derivative or incorporate a structure which makes it difficult for the client to understand the risk involved \\[...\\]”?\n\n***\n\n### Answer\n\nRecital 23 of DLTPR sets out that the reason for the limitation in the types of instruments eligible for admission to trading or recording on a DLT market infrastructure is to strike a balance between allowing innovation and experimentation in a sound regulatory environment and preserving investor protection, market integrity and financial stability.\n\nThe recital links this limitation in the scope of eligible instruments to the scope of instruments covered by the execution-only exemption set out in Article 25(4) of Directive 2014/65/EU.\n\nArticle 3(1) of DLTPR lays down some further limitations with regard to the eligible financial instruments as compared to the scope of said Article 25(4). Nevertheless, based on recital 23 of DLTPR and by broadly reflecting the wording of the said Article 25(4), Article 3(1) DLTPR ought to be interpreted in light of the scope of the execution-only exemption, including the quoted provision of Article 3(1)(b).\n\nWhether a particular instrument qualifies under Article 3(1)(b) DLTPR should be determined on a case-by-case basis taking into account all the characteristics of the financial instrument as well as supervisory practice in the context of the scope limitations applicable to the execution-only exemption. To ensure ex ante legal clarity on the scope of eligible financial instruments under Article 3 of DLTPR, national competent authorities should make sure, to the extent possible, that such practice is made public or available to prospective applicants to the DLT Pilot Regime so that they can determine what financial instruments may be admitted to or recorded on DLT market infrastructures.\n\nDisclaimer in relation to the answers provided by the European Commission in accordance with Article 16b(5) of the ESMA Regulation: these answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.\n\n***\n\n**Source:** [ESMA original document](https://www.esma.europa.eu/publications-data/questions-answers/2127)\n"}