A recent report highlights the impending impact of the
European Union’s Markets in Crypto Assets Regulation (MiCA) on cryptocurrency
trading surveillance. Commissioned by Eventus, the report, “The Impact of
MiCA on Crypto Market Surveillance: Insights and Challenges,” draws from
interviews with senior executives at 68 firms involved in crypto trade, conducted
by Acuiti.
MiCA Compliance: Progress and Challenges
MiCA, a pioneering regulatory framework within a major
financial jurisdiction, is prompting a surge in efforts to establish
comprehensive market surveillance systems across the industry. The regulation,
akin to the EU’s Market Abuse Regulation (MAR), mandates stringent requirements
for market participants, ushering in new operational standards.
According to the findings, only 9% of surveyed firms fully
comply with MiCA requirements, with a significant 25% yet to commence
preparations. As MiCA’s implementation deadline approaches at year’s end, firms
are urged to ascertain their regulatory scope promptly and initiate compliance
measures.
Despite challenges, such as identifying suitable third-party
software vendors and navigating compliance costs, the report notes a growing
sophistication in market surveillance practices. Even among firms initially
excluded from MiCA’s scope, 57% already employ robust surveillance systems.
“For firms that are not already operating under MIFID
II, MiCA will present a significant operational lift to become compliant, and
it is no surprise that we found that firms were looking to third-party vendors
to assist them in their preparations,” said Ross Lancaster Head of
Research at Acuiti.
“There is a relative lack of awareness among some areas
in the market as to who is in scope, which will need to be addressed if firms
are going to have time to get ready for compliance.”
Outsourcing Trends and Compliance Costs
The study highlights consultations on MiCA’s final technical
standards, revealing that 25% of affected firms have yet to initiate
preparations, while others are at various stages of readiness. Notably, 64% of
firms intend to outsource system development, anticipating challenges in vendor
selection and resource allocation.
Key concerns among firms anticipating MiCA’s impact include
compliance costs and securing qualified personnel, reflecting broader industry
adjustments to regulatory mandates. As regulations change, industry leaders must adjust to new
rules under MiCA.
This article was written by Tareq Sikder at www.financemagnates.com.
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