The European Securities and Markets Authority (ESMA) has issued guidelines under the Markets in Crypto-Assets Regulation (MiCA) focusing on two key areas: the Suitability Requirements for Crypto-Asset Services and the Format of Periodic Statements for Portfolio Management.
Suitability Requirements for Crypto-Asset Services
These guidelines detail the obligations of crypto-asset service providers (CASPs) when offering advice or portfolio management services. Specifically, CASPs must assess clients' knowledge and experience in investing, their financial situation (including the ability to bear losses), investment objectives (including risk tolerance), and their basic understanding of the risks associated with crypto-assets. This assessment ensures that any recommendations or decisions made on behalf of clients align with their individual profiles and risk appetites.
Format of Periodic Statements for Portfolio Management
For CASPs providing portfolio management services, the guidelines specify the format and content of periodic statements to be provided to clients. These statements should offer a fair and balanced review of the activities undertaken, the performance of the portfolio during the reporting period, and an updated assessment of how these activities align with the client's preferences and objectives. The guidelines aim to standardize these statements to enhance transparency and investor protection.
These guidelines are part of ESMA's broader effort to harmonize practices across the EU, ensuring consistent application of MiCA's provisions and bolstering investor protection in the rapidly evolving crypto-asset market.
Originally published 27 March 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
