Regulatory Alerts2024-07-31
ESMA Opinion on the Convergent Application of MiCA to Broker Models
The European Securities and Markets Authority issued this opinion to guide national competent authorities in preventing regulatory arbitrage by Multifunction Crypto-asset Intermediaries seeking to access EU clients while minimizing MiCA compliance. It clarifies that the reverse solicitation exemption must be narrowly applied to stop third-country firms from using EU-authorized brokers as legal covers to solicit clients or route orders to non-EU execution venues. The document mandates rigorous assessment of conflicts of interest, best execution obligations, and group structures to ensure these entities do not become letter-box entities or undermine investor protection.
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