The European Securities and Markets Authority (ESMA) launched a general consultation on instructions to assess knowledge and efficiency for professionals who provide encrypted asset services within the framework of markets in regulating encrypted assets (MICA).
Consultation, published on February 17, aims to unify the qualifications and expertise required for individuals who provide advice to customers or inform customers about digital assets.
The minimum efficiency standards
The guidelines project determines clear criteria for professional qualifications, work experience, and continuous education for employees who work for CASPS.
Under the proposal, individuals who provide investment advice in encrypted assets must meet the strictly competent requirements of those who provide basic media services.
ESMA explained that the advisers must get a higher education degree or their equivalent, and they are subject to no less than 160 hours of vocational training, and they have at least one year of relevant experience. Those who provide general information about encrypted assets will require a professional qualification of at least 80 hours and six months of experience under supervision.
All professionals must undergo the evaluation exam and complete continuous training – at least 10 hours annually for information providers and 20 hours for consultants – to ensure that their knowledge remains updated.
The guidelines also emphasize the importance of understanding the risk of encryption, including market fluctuations, cybersecurity threats, Blockchain governance, and liquidity risk associated with major assets.
In addition, ESMA suggests that companies make annual internal reviews to assess employee compliance with these standards.
Organizational effects
This consultation comes at a time when MICA provisions that govern the services of encrypted assets through the European Union enter full implementation in 2025. The regulation seeks to create a corresponding legal framework for digital assets, cover transparency, protect the investor and monitor wisdom.
ESMA noticed that the growth of the encryption industry calls for higher operating standards to ensure that investors remain protected.
According to the regulation:
“The rapid expansion of the encryption markets has increased the risks, especially for retailers. Ensuring that service providers maintain the basis of experience is crucial to protecting investors and market safety.”
The guidelines are closely in line with the current MIFID II bases for financial markets but provide encryption considerations, reflecting the unique nature of Blockchain assets.
Market participants, including winners, investors, financial institutions and industry societies, are called to make notes on proposed standards.
ESMA will accept the comments until April 22, 2025, and the final guidelines are expected to be published in the third quarter of the year.
Source: https://cryptoslate.com/esma-launcles-consultation-to-define-crypto-visor-standers-across-europe/