GDF & BC4EU Response to ESMA Knowledge & Competence Consultation
GDF and BC4EU collaborated across their memberships to respond to the ESMA Consultation Paper on Guidelines for the criteria on the assessment of knowledge and competence (K&C) under the Markets in Crypto Assets Regulation (MiCA).
GDF and BC4EU worked with our members to provide a constructive assessment of how to better ensure alignment with MiFID II as well as proportionality and suitability in the implementation of the guidelines. Through this process, the Working Group has identified key areas that may require further drafting consideration or additional guidance for purposes of clarity, proportionality, and effective implementation. The core areas identified are:
1. We caution against a disproportionate approach to K&C under MiCA, in particular in comparison to the level of prescription and scope of MiFID II;
2. In support of point 1, we also encourage greater alignment to regulatory principles and benchmarking to MiFID II;
3. We propose clear guidance on transitional arrangements and realistic timelines for firms to achieve compliance including support for traditional ‘grandfathering’ arrangements and clear transitional regimes for existing staff;
4. We encourage flexibility in training formats and recognition rather than an overly prescriptive approach;
5. We strongly encourage the development of a Cost Benefit Analysis (CBA);
6. We emphasize a need for clarity of the standards and format of mandatory exams including standardisation of qualification equivalence;
7. We support enhancing proportionality by distinguishing high-risk vs low-risk services and also to calibrate for the lower risk presented by non-advisory roles;
8. We emphasize the need for greater clarity on the interpretation of portfolio knowledge;
9. We support the development of industry led best practice for learning pathways or certification;
10. We support additional guidance on supervisory evidence;
11. We support ESMA considering how to strengthen the link to suitability obligations; and
12. We encourage the development of more appropriate models and examples that better reflect the industry (with reference to the Annex).