In this act Article 1 of 4
Article 1 — Criteria and factors for the purposes of ESMA temporary intervention powers
Financial servicesLevel 2Delegated RegulationMiCAIn forceOfficial source
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:
1(a)
a)the degree of complexity of the crypto-asset other than an asset-referenced token or e-money token or the type of activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens in relation to the type of client, as assessed in accordance with point (c), involved in the activity or practice, or to whom the crypto-asset other than an asset-referenced token or e-money token is marketed or sold, taking into account, in particular, the following:
Copy link1(a)(i)
i)the degree of transparency of costs and charges associated with the crypto-asset other than an asset-referenced token or e-money token, the activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens and, in particular, the lack of transparency resulting from multiple layers of costs and charges;
Copy link1(a)(iii)
iii)whether the crypto-asset other than an asset-referenced token or e-money token or service is bundled with other products or services;
Copy link1(b)(iii)
iii)the probability, scale and nature of any detriment, including the amount of loss potentially suffered;
Copy link1(b)(viii)
viii)the average amount invested by each client in the crypto-asset other than an asset-referenced token or e-money token;
Copy link1(c)
c)the type of clients involved in an activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens or to whom a crypto-asset other than an asset-referenced token or e-money token is marketed or sold, considering the following:
Copy link1(c)(ii)
ii)clients’ skills and abilities, including the level of education, experience with similar crypto-assets other than asset-referenced tokens or e-money tokens or selling practices;
Copy link1(c)(iv)
iv)clients’ core financial objectives, including pension saving and home ownership financing;
Copy link1(d)
d)the degree of transparency of the crypto-asset other than an asset-referenced token or e-money token or the type of activity or practice related to crypto-assets other than asset-referenced tokens or e-money tokens, considering the following:
Copy link1(d)(ii)
ii)the use of techniques drawing clients’ attention but not necessarily reflecting the suitability or overall quality of the product or service;
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iv)the use of product names or terminology or other information by implying a greater level of security or return than those which are actually possible or likely, or which imply product features that do not exist;
Copy link1(e)
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;
Copy link1(f)
f)the existence and degree of disparity between the expected return or profit for investors and the risk of loss in relation to 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, taking into account, in particular, the following:
Copy link1(f)(i)
i)the structuring costs of such crypto-assets other than asset-referenced tokens or e-money tokens, activity or practice and other costs;
Copy link1(g)
g)the ease and cost with which investors are able to sell the relevant crypto-asset other than an asset-referenced token or e-money token or switch to another crypto-asset or product, taking into account, in particular, the following:
Copy link1(h)
h)the pricing and associated costs 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, taking into account, in particular, either of the following:
Copy link1(i)
i)the selling practices associated with the crypto-asset other than an asset-referenced token or e-money token, taking into account, in particular, the following:
Copy link1(i)(ii)
ii)the information, marketing or other promotional material associated with the investment;
Copy link1(i)(iv)
iv)whether the decision to buy is secondary or tertiary following an earlier purchase;
Copy link1(j)
j)the financial and business situation of the issuer or of a service provider of a crypto-asset other than an asset-referenced token or e-money token, taking into account, in particular, either of the following:
Copy link1(j)(i)
i)the financial situation of the issuer or of the provider of services related to a crypto-asset other than an asset-referenced token or e-money token;
Copy link1(j)(ii)
ii)the transparency of business situation of the issuer or of the provider of services related to a crypto-asset other than an asset-referenced token or e-money token;
Copy link1(k)
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;
Copy link1(l)
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;
Copy link1(m)
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;
Copy link1(n)
n)whether the characteristics of a crypto-asset other than an asset-referenced token or e-money token make it particularly susceptible to being used for the purposes of financial crime and, in particular whether those characteristics could potentially encourage the use of the crypto-asset other than an asset-referenced token or e-money token for the following:
Copy link1(o)
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;
Copy link1(p)
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;
Copy link1(q)
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;
Copy link1(r)
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;
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