Financial Regulatory News
Financial Regulatory News

Short, hands-on, up to date

MiCAR in Practice: BaFin Issues Guidance on Crypto Services

At the beginning of the year, the German Federal Financial Supervisory Authority (“BaFin“) released a guidance document on crypto-asset services under the new EU Regulation on Markets in Crypto-Assets (“MiCAR“). This regulation has been directly applicable to crypto service providers in the EU since December 30, 2024.

The guidance provides clarifications on the licensing requirements for crypto services and the obligations for providers. Key points include:

  • Definitions of Crypto Services: BaFin specifies which crypto services are subject to licensing and connects these to the well-established investment services under MiFID II.
  • Licensing of Crypto-Asset Service Providers: The guidance includes [...]

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EMIR 3: Active Accounts, clearing threshold and exemptions

On December 4, 2024, EU Regulation 2024/2987 (“EMIR 3”), amending EU Regulation 648/2012 on the European Market Infrastructure (“EMIR”), was published in the EU Official Journal. EMIR 3 will enter into force on December 24, 2024, although certain provisions will remain subject to the Regulatory Technical Standards that will be published by the European Securities and Markets Commission (“ESMA”).

EMIR 3 introduces a requirement for certain EU counterparties to open and maintain an account with a central counterparty (“CCP”) established in the EU, and makes targeted amendments relating to the clearing thresholds and certain exemptions.

Origins of EMIR 3

[...]

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An Overview of the New Consumer Credit Directive

One year after the new EU Consumer Credit Directive (Directive 2023/2225) came into force, questions remain: When will it be implemented? What will be regulated? How is the business community reacting? The directive brings significant changes and extensions in an effort to strengthen consumer protection and meet the challenges of digitization. But does it really provide consumers with the desired added value and protection, or does it prevent innovative, successful business models – from which consumers benefit – via overregulation?

Key Contents of the Directive

The new directive significantly expands the scope of application for consumer credit and covers [...]

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Navigating EU Sanctions: How Investment Funds and Corporates Can Meet the ‘Best Efforts’ Standard

Co-Authors:  Raminta DereskeviciuteSabine NaugèsMichal Chajdukowski Ludovica Rabitti

With the introduction of the 14th sanctions package, entities established in the European Union are required to ‘undertake their best efforts to ensure’ that non-EU subsidiaries they own or control do not undermine EU Regulation 833/2014 imposing EU sanctions against Russia, or EU Regulation 765/2006 imposing EU sanctions against Belarus. This obligation stretches to EU citizens, including those located outside the European Union, who control corporate and fund structures around the world.

The term ‘best efforts’ is not explicitly [...]

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The DORA Deadline – How to prepare, and how to use legal AI for DORA contract review

Financial Services (FS) firms need to comply with the EU’s new Digital Operational Resilience Regulation (DORA) until January 17, 2025. Compliance isn’t optional, it’s the law.

In this webinar, we spoke about what DORA meant for clients and how to use legal AI for contract review and remediation.

The following topics were discussed:

  • What DORA is and who it applies to
  • What Financial Services firms need to do before January 2025
  • What contract review and remediation work needs to be done
  • How McDermott uses legal AI with BRYTER Extract for DORA contract review and remediation.

You can find [...]

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DORA Check

Digital threats and cyberattacks are increasing every year. In 2023, digital threats caused damages of more than €200 billion in Germany, of which 72% resulted from cyberattacks (source: Bitkom, study on economic protection 2023). To counter the threat to the system-critical financial sector, the EU has decided to implement a uniform, high level of security. The  Digital Operational Resilience Act (DORA)  is the answer.

The regulation on digital operational resilience is intended to reduce the risks arising from the ever-increasing dependence on information and communication technology in the financial sector. In particular, DORA is expected to reduce the risk [...]

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ZuFinG II – The Next Step Towards Strengthening Germany as a Financial Hub?

Following the initial steps with the Future Financing Act (“ZuFinG I“), the Federal Ministry of Finance presented the draft of the Second Future Financing Act (“ZuFinG II-E” and “Draft Bill“) on 27 August 2024. The Draft Bill aims to further develop the German financial market and revise some of the existing regulations. The primary focus is on facilitating access to the capital markets and relieving financial actors from excessive bureaucracy.

New Regulations for Payment Service Providers Regarding Customer Funds

Payment service providers are required to safeguard customer funds they receive according to the methods outlined in the German Payment Services Supervision [...]

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Dubai and Abu Dhabi Firms Involved in Crypto: Regulatory Pitfalls to Avoid When Dealing with EU or UK Clients

Co-Authors: Vlad MalyMichal Chajdukowski

Continuing developments in the crypto regulatory sphere have significantly increased the attractiveness of Dubai and Abu Dhabi for crypto firms with global ambitions. Firms should remember, however, that they may also need to comply with the EU or UK crypto regulatory regimes, especially when engaging with clients or investors from these jurisdictions.

In this article, we summarise recent crypto developments in the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), and discuss the pitfalls crypto firms should avoid when dealing with EU or UK clients.

Recent [...]

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