The pilot regime is expected to be rolled out in March 2023.
The European Union has taken a step forward in finalizing rules for operating financial markets revolving around distributed ledger technology (DLT) in anticipation of a pilot launch in early 2023. Legislators and policymakers had pinned their hopes on DLT for filtering out intermediaries in trading activities of various assets like stocks and bonds, but it has given rise to some apprehension regarding retail investors being able to use the benefits since they would have to go through a test initially.
The official guidance from the European Union, indicating to DLT, specified the point for regular people using the platform, stating, “the applicant should clearly indicate to the [national competent authority] for its assessment what are the experiences (e.g., through its education, training, professional experience, etc.) which demonstrate a sufficient level of knowledge of the functioning of the DLT technology.”
The anxiety regarding the assessment has been floating for a while since it could become a hurdle to using DLT technology. On a positive note, the manual from the European Securities and Markets Authority (ESMA) is not compulsory, though a decision not to follow the guidance by any authority would have to be explained in writing. ESMA received responses to the draft guidelines from all stakeholders, including trading venues, securities depositories, and investment firms.