ESMA Guidelines on standard forms, formats and templates for applications for authorisation to operate a DLT market infrastructure

29 January 2025
Ref.: 2411102

Circular no. 5/2025
To:
Securities firms, central securities depositories and operators of trading venues for financial instruments.

Subject: ESMA Guidelines on standard forms, formats and templates for applications for authorisation to operate a market infrastructure for financial instruments based on distributed ledger technology.

The Financial Supervisory Authority of the Central Bank of Iceland has adopted guidelines on standard forms, formats and templates for applications for authorisation to operate a market infrastructure for financial instruments based on distributed ledger technology.1 The guidelines are issued on the basis of Regulation (EU) 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology (DLT)2 which is implemented in Act No. 56/2024 on market infrastructures for financial instruments based on distributed ledger technology (the DLT Act). The guidelines are issued by the European Securities and Markets Authority (ESMA).

The guidelines are addressed to supervisory authorities and to entities intending to apply for authorisation to operate a market infrastructure for financial instruments based on distributed ledger technology. The purpose of the guidelines is to promote consistent, efficient and effective supervisory practices within the European financial system, as well as to ensure a common, uniform and consistent application for applications for authorisation to operate DLT market infrastructures. Furthermore, the main objective of the guidelines is to introduce standard forms, formats and templates for applications for authorisation to operate DLT market infrastructures.

The DLT Regulation applies to financial services, more specifically trading in financial instruments based on distributed ledger technology and the settlement of such transactions. The DLT Regulation establishes a pilot regime for the issuance, trading in financial instruments based on distributed ledger technology (DLT financial instruments), the settlement of such transactions and the operation of DLT market infrastructures. DLT market infrastructures include DLT trading venues for financial instruments, DLT settlement systems and DLT trading and settlement systems.3

[1] Guidelines on standard forms, formats and templates to apply for permission to operate a DLT market infrastructure: ESMA70-460-213.

[2] Regulation (EU) 2022/858 of the European Parliament and of the Council of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology and amending Regulations (EU) No. 600/2014 and (EU) No. 909/2014 and Directive 2014/65/EU.

[3] For already operating securities firms, market operators and central securities depositories, as well as new entities intending to operate DLT market infrastructures, which seek authorisation to use DLT in their operations on the basis of the proposed legislation, this applies, as appropriate, in accordance with the provisions of the Act on markets for financial instruments and the Act on central securities depositories, settlement and electronic registration of financial instruments, taking into account the Act on market infrastructures for financial instruments based on distributed ledger technology.

The Financial Supervisory Authority grants and withdraws specific authorisations and exemptions to operate market infrastructures for financial instruments based on distributed ledger technology pursuant to Article 5 of Act No. 56/2024, cf. also Act No. 115/2021 on markets for financial instruments and Act No. 7/2020 on central securities depositories, settlement and electronic registration of financial instruments. The guidelines contain checklists and templates for authorisation applications, specify what such applications must contain and describe the presentation of application data. Furthermore, it addresses how supervisory authorities shall arrange the exchange of information on matters related to DLT.

According to the third paragraph of Article 16 of the ESA Regulations, which were implemented by Act No. 24/2017 on the European System of Financial Supervision, competent authorities and the relevant supervised entities shall make every effort to comply with the guidelines of the supervisory authorities and general recommendations. The purpose of the guidelines is to establish consistent, efficient and effective supervisory practices within the European financial system, as well as to ensure a common, uniform and consistent application of legislation within the European Economic Area.

This circular will be published on the Central Bank's website together with a link to the English version of the guidelines. The Financial Supervisory Authority of the Central Bank will also rely on the guidelines in its supervisory practices.

The Financial Supervisory Authority directs the recipients of this circular, as well as others concerned, to familiarise themselves with the aforementioned ESMA guidelines should they intend to apply for authorisation to operate DLT market infrastructures.

Yours faithfully,
CENTRAL BANK OF ICELAND

Linda Kolbrún Björgvinsdóttir
Managing Director
Conduct Supervision

Katla Dögg Sævaldsdóttir
Legal Counsel
Conduct Supervision