France’s stock market regulator – Autorité des Marchés Financiers (AMF) – has started aligning its rules in line with the European Union’s Markets in Crypto-Assets (MiCA) regime. In a 10 August blog post, the AMF laid out its new amendments to the local crypto regulations.
The changes involved the introduction of a new enhanced registration framework for Digital Asset Service Providers (DASPs). Along with this, tweaks and amendments were also made to align local DASP licensing requirements with MiCA rules. These are set to be applied from 1 January 2024.
As a part of the same, DASPs seeking a licence in the country will be evaluated for a wide range of requirements. The AMF said that this would include things like “adequate security and internal control systems, systems for managing conflicts of interest, clear, accurate and non-misleading information, public pricing policies, specific custody provisions (segregation of client assets vs. own assets), prohibition on using client assets without their express prior consent, agreement signed with clients, resilient and secure IT system.”
A ban on using client assets without their express prior consent, a signed agreement with clients, and a resilient and secure IT system are some of the other new requirements that would be expected in the new regulations.
When Europe’s landmark crypto regulation MiCA was passed at the European Parliament in April this year, the French watchdog welcomed the regulation saying that it would help in increasing the competitiveness of French and European players by “creating a harmonised framework in Europe” while also ensuring better protection for investors.
Back then, the AMF said it would look into a possible “fast-track” route for registered providers as a part of its transition from domestic regulation to the Europe-wide rules.
The crypto regulation regime that has been in place in the country requires all firms to complete “simple” registration. They can also opt for a higher level of authorisation which requires more disclosure, which is similar to the obligations that firms will face under MiCA.
However, none of the firms registered in the country have yet opted for the enhanced form of authorisation. It was decided in January this year that the firms registered under the simple system could continue operating as they are until the introduction of MiCA, which is expected to take place in January 2025. However, this option is not open for new entrants who will need to gain a full licence if they launch in 2024 or later.
