Article 2 Programme of operations: information on the business model, strategy and risk profile

For the purposes of Article 18(2), point (d), of Regulation (EU) 2023/1114, the application for authorisation shall contain a programme of operations setting out the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;’s business model, strategy and risk assessment for three years following the granting of the authorisation.

1. information on the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;’s business activities, including:

   1. main features of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; for which the authorisation is sought, including all of the following:

      1. the name and type of asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; that the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; intends to issue and for which authorisation to offer to the publicmeans a communication to persons in any form, and by any means, presenting sufficient information on the terms of the offer and the crypto-assets to be offered so as to enable prospective holders to decide whether to purchase those crypto-assets; or to seek admission to trading is sought;

      2. specification as to whether the authorisation is sought for an offer to the publicmeans a communication to persons in any form, and by any means, presenting sufficient information on the terms of the offer and the crypto-assets to be offered so as to enable prospective holders to decide whether to purchase those crypto-assets; or an admission to trading of such asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;;

      3. description of the mechanism through which the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; is issued, including the smart contracts together with an explanatory document on their functioning, the method of payment to buy the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;, and the distribution channels, in particular the crypto-asset service providersmeans a legal person or other undertaking whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services in accordance with Article 59; executing selling orders or crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; exchange platforms;

      4. where an agreement by the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; is entered into for the distribution of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;, the name and contact details of the distributors and description of the roles, responsibilities, rights and obligations of both the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; and the distributors, including the law applicable to the agreement;

      5. description of the mechanism through which the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; is redeemed, including, where applicable, the indication whether crypto-asset service providersmeans a legal person or other undertaking whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services in accordance with Article 59; will be involved in the execution of the redemption;

      6. the protocol or consensus mechanismmeans the rules and procedures by which an agreement is reached, among DLT network nodes, that a transaction is validated; used for validating transactions, including the description of the settlement finality features;

      7. the single or the multiple distributed ledger technologyor ‘DLT’ means a technology that enables the operation and use of distributed ledgers; (DLT) where the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; is issued and the interoperability bridges between such different DTLs that are available at the time of the application for authorisation, as indicated in the white paper;

   2. any already existing, outstanding asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;, e-money token, crypto-assetsmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; or other digital assets issued by the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;, with the indication of the related outstanding amounts, the networks and markets where those are distributed and traded, the amount, composition, custody arrangements and custodians of the related reserve of assetsmeans the basket of reserve assets securing the claim against the issuer;, or safeguarding requirements for e-money tokens, as applicable;

   3. any other financial and non-financial activity that is carried out by the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; and that the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; intends to continue to carry out in case the authorisation is granted, and the interaction among such activities, if any;

   4. where the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; belongs to a group, an overview of the organisation and structure of that group, describing the activities of the entities in the group and indicating the parent undertakings, financial holding companies as defined in Article 4(1), point (20), of Regulation (EU) No 575/2013 of the European Parliament and of the Council(⁹)Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1, ELI: http://data.europa.eu/eli/reg/2013/575/oj)., mixed financial holding companies as defined in Article 4(1), point (21), of that Regulation, and investment holding companies as defined in Article 4(1), point (20a), of that Regulation, within the group, as well as any authorisation, registration or other licences granted by a competent authoritymeans one or more authorities:designated by each Member State in accordance with Article 93 concerning offerors, persons seeking admission to trading of crypto-assets other than asset-referenced tokens and e-money tokens, issuers of asset-referenced tokens, or crypto-asset service providers;designated by each Member State for the application of Directive 2009/110/EC concerning issuers of e-money tokens; in the financial sector held by any such group entity or by the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;;

2. description of the business environment where the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; will operate, focusing on the crypto-assetmeans a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology; and payment sectors, including:

   1. the main existing market players and principal peers;

   2. the likely development of the business environment and any related potential risks;

   3. an analysis of the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;’s competitive position in the market;

3. description of the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets;’s overall business strategy and, where the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; belongs to a group, the overall group strategy, including:

   1. explanation of the strategic goals;

   2. indication of the key business drivers;

   3. indication of any identified competitive advantage, including any prior experience in the digital sector, size and scalability of the business, DLT specificities, including permissioned or permissionless access to the blockchain network granted by the network owner or governing arrangements, related validation protocols and consensus mechanismsmeans the rules and procedures by which an agreement is reached, among DLT network nodes, that a transaction is validated; or the planned number of transactions per second;

   4. description of the target customers, including retail, corporate, institutional, small and medium enterprises, public entities, of the target markets and geographical distribution, including the list of host Member Statesmeans the Member State where an offeror or person seeking admission to trading has made an offer to the public of crypto-assets or is seeking admission to trading, or where a crypto-asset service provider provides crypto-asset services, where different from the home Member State; as referred to in Article 18(2), point (r), of Regulation (EU) 2023/1114;

   5. a risk assessment covering the actual or potential risks that the planned business may be exposed to, including:

      1. business risk factors, such as failure to reach the minimum target subscription goal of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; issuance, where provided;

      2. operational risk, fraud, ICT and cyber-security risks;

      3. financial risks including liquidity risk, market and credit risk;

      4. risks related to the significant third-party providers;

      5. inherent and residual risks of money laundering and terrorist financing, also having regard to the mechanisms and arrangements relating to the issuance, redemption and distribution of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;;

   6. matrix resulting from the interaction of the strengths, weaknesses, opportunities and threats of the business strategy.

For the purposes of point (a)(i)(4), where, upon being granted authorisation, the applicant issuermeans an issuer of asset-referenced tokens or e-money tokens who applies for authorisation to offer to the public or seeks the admission to trading of those crypto-assets; intends to appoint by consent and in writing other entities to carry out the offer to the publicmeans a communication to persons in any form, and by any means, presenting sufficient information on the terms of the offer and the crypto-assets to be offered so as to enable prospective holders to decide whether to purchase those crypto-assets; or the admission to trading of the asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies;, the application for authorisation shall include policies and procedures clarifying, inter alia, that the responsibility for the compliance with Title III of Regulation (EU) 2023/1114 will remain with the issuermeans a natural or legal person, or other undertaking, who issues crypto-assets; of an asset-referenced tokenmeans a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; that has been granted authorisation and that such other entities will be subject to the conduct and marketing requirements laid down in Article 16(1), second subparagraph, of that Regulation.