EP publishes draft report on a pilot regime based on distributed ledger technology

As part of its Digital Finance package, the European Commission published a draft Regulation regarding a pilot regime for market structures based on distributed ledger technology (the “DLT Pilot Regime”).

The proposed Regulation aims at providing a mechanism for allowing market infrastructures to experiment with certain restricted use of DLT. More specifically, firms already authorized to operate specific market infrastructures would be allowed to apply for specific temporary exemptions from certain restrictions and requirements in financial services legislation, and thus be permitted to restructure their activities making use of DLT. The experience and understanding gained by supervisory authorities regarding the application of current EU financial services legislation to DLT-based market infrastructures is expected to inform future legislative developments.