MiCAR’s Next Step: Key Transparency Requirements for CASPs

The European Commission has adopted a Delegated Regulation that complements the Markets in Crypto-assets Regulation (MiCAR). This Regulation establishes regulatory technical standards that specify how CASPs should present transparency data. The regulation covers pre-trade data (including bid and ask prices and depth of trading interest) and post-trade data (including price, volume and time of executed transactions).

The regulation will be subject to review by the Council of the European Union and the European Parliament. If no objections are raised, it will be published in the Official Journal of the European Union and take effect 20 days thereafter.

Key Provisions:

The regulation outlines specific requirements for Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs), considering their different operating models.
CASPs will be required to disclose bid and offer prices and the depth of trading interest based on the type of trading system used.
CASPs must publish all transaction information, including any modifications or cancellations of previously reported trades.
Data must be presented separately for pre-trade and post-trade information, with the option to disaggregate by individual crypto-asset or group by asset type.

The recommendation of ECOVIS ProventusLaw:

Optimize real-time transaction reporting: Implement robust mechanisms for the immediate publication of transaction details, with a maximum delay of 30 seconds after execution. This includes establishing an infrastructure to manage and distribute this information on time.
Develop comprehensive reporting capabilities: design and maintain systems that publish full transaction details, including any changes or cancellations to previously published trade reports. Ensure that all reporting is comprehensive and transparent to meet post-trade transparency requirements.
Ensure data segmentation and disaggregation: develop the ability to separate pre-trade and post-trade information, with options for data disaggregation by individual crypto-assets or grouping by asset type. This approach will facilitate compliance and increase transparency for all market participants.
Address different requirements for CEXs and DEXs: Financial institutions operating or planning to operate both centralised and decentralised exchanges should adapt their systems and processes to reflect the specific regulatory obligations of each model. This includes reviewing operational workflows and ensuring that reporting and disclosure mechanisms are aligned with the different requirements for CEXs and DEXs.