Skip to the text
In this act Article 5 of 11

Article 5 — Design of stress testing programme

Financial servicesLevel 2RTSMiCAIn forceOfficial source

5(1)

1.Issuers of asset-referenced tokens or e-money tokens shall ensure that their stress testing programme is viable and realistic, and that stress testing results in informed decision-making at all management level on all existing and potential risks having material impact on the financial situation of the issuer.

Copy link
5(2)

2.Issuers of asset-referenced tokens or e-money tokens shall regularly review and assess their stress testing programme to determine its effectiveness, robustness and suitability both with regard to the risk characteristics of the relevant issuer itself and that of the relevant tokens issued and shall keep it updated. This assessment shall be made on an annual basis and shall fully reflect the external and internal conditions.

Copy link
5(3)

3.When designing the stress testing programme, issuers of asset-referenced tokens or e-money tokens shall consider all the following elements:

Copy link
5(3)(a)
a)the effectiveness of the programme in meeting its intended purposes;
Copy link
5(3)(b)
b)the need for improvements;
Copy link
5(3)(c)
c)the identified risk factors, reasoning for and design of relevant scenarios, model assumptions and the sensitivity of results to these assumptions, as well as the role of expert judgement to ensure that it is accompanied by sound analysis;
Copy link
5(3)(d)
d)the model performance, including its performance on out-of-sample data, such as data that were not used for model development;
Copy link
5(3)(e)
e)how to incorporate possible solvency-liquidity adverse loops;
Copy link
5(3)(f)
f)the adequacy of possible interlinkages between solvency stress tests and liquidity stress tests;
Copy link
5(3)(g)
g)feedback received from competent authorities in the context of their supervisory or other stress tests;
Copy link
5(3)(h)
h)the adequacy of the data infrastructure (systems implementation and data quality);
Copy link
5(3)(i)
i)the appropriate level of involvement of senior management and the management body;
Copy link
5(3)(j)
j)all assumptions including business and/or managerial assumptions, and management actions envisaged, based on the purpose, type and result of the stress testing, including an assessment of the feasibility of management actions in stress situations and a changing business environment;
Copy link
5(3)(k)
k)the adequacy and transparency of the relevant documentation.\
Copy link
5(4)

4.The stress testing programme shall be appropriately documented for all types of stress tests carried out.

Copy link
5(5)

5.The stress testing programme shall be evaluated across the organisation, for instance by the risk committee and internal auditors. Business units not responsible for the design and application of the programme or external experts shall also contribute to the assessment of this process, taking into account the relevant expertise for specific subjects.

Copy link
5(6)

6.Issuers of asset-referenced tokens or e-money tokens shall ensure, both for the initial design and for the assessment of the stress testing programme, that an effective dialogue has taken place with the involvement of experts from all business areas of the issuer and that the programme and its updates have been properly reviewed by the senior management and management body of the issuer, who are also responsible for monitoring its execution and oversight.

Copy link