Art. 32 Identification, prevention, management and disclosure of conflicts of interest | MiCA regulation | MiCA

This article places conflict of interest obligations squarely on issuers of asset-referenced tokens.

It requires them to have policies and procedures in place to identify, prevent, manage, and disclose conflicts of interest across a broad range of relationships — from shareholders and management body members to employees, token holders, and third-party service providers.

A specific callout is made for conflicts arising from the management and investment of the reserve of assets, which connects this article directly to the reserve requirements established in Article 36.

The article also imposes a public disclosure obligation, requiring issuers to publish conflict of interest information on their website in enough detail for prospective holders to make informed purchasing decisions.

EBA is tasked with developing the technical standards that will flesh out how the policies and disclosures must be structured in practice.

Important points:

Implement and maintain policies and procedures to identify, prevent, manage, and disclose conflicts of interest across all key internal and external relationships.
Conflicts of interest arising from the management and investment of the reserve of assets require particular attention.
Publish conflict of interest disclosures on your website in sufficient detail for prospective token holders to make informed purchasing decisions.

1. Issuers of asset-referenced tokens shall implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest between themselves and:
  1. their shareholders or members;
  2. any shareholder or member, whether direct or indirect, that has a qualifying holding in the issuers;
  3. the members of their management body;
  4. their employees;
  5. the holders of asset-referenced tokens; or
  6. any third party providing one of the functions as referred in Article 34(5), first subparagraph, point (h).
1. Issuers of asset-referenced tokens shall, in particular, take all appropriate steps to identify, prevent, manage and disclose conflicts of interest arising from the management and investment of the reserve of assets referred to in Article 36.
1. Issuers of asset-referenced tokens shall, in a prominent place on their website, disclose to the holders of their asset-referenced tokens the general nature and sources of conflicts of interest referred to in paragraph 1 and the steps taken to mitigate them.
1. The disclosure referred to in paragraph 3 shall be sufficiently precise to enable the prospective holders of their asset-referenced tokens to take an informed purchasing decision about the asset-referenced tokens.
1. EBA shall develop draft regulatory technical standards to further specify:
  1. the requirements for the policies and procedures referred to in paragraph 1;
  2. the details and methodology for the content of the disclosure referred to in paragraph 3.
2. EBA shall submit the draft regulatory technical standards referred to in the first subparagraph to the Commission by 30 June 2024.
3. Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

Article 32 Identification, prevention, management and disclosure of conflicts of interest

Relevant recitals