Funds Europe published an article on the DLT pilot scheme, which seeks to highlight the importance of this regulation for asset managers, whether this transitional regime will help to accelerate the development of tokenization and how the ESMA project can work with other similar initiatives.
The Distributed Ledger Technology (DLT) Pilot Regime came into effect on March 23, 2023. It is a transitional European regulatory regime that should lead to tokenization standards for traditional financial instruments and to the harmonization of rules applicable to market participants. Funds Europe asked Eliane Méziani, Senior Advisor at CACEIS, James Haskell, Chief Operating Officer of Etradig Software, and Laurent Marochini, Head of Innovation of SGSS Luxembourg about the new law.
The article attempts to evaluate the importance of this regulation for asset managers, to assess the contribution of this transitional regime in the context of the development of tokenization, and to understand how the ESMA project can work with other similar initiatives.
More specifically, it aims to work out the value of this Pilot Scheme by answering the following questions:
- How important is the DLT pilot scheme for asset managers and investors?
- Will it provide legal certainty for market participants and investors regarding the use of the DLT?
- Will this lead to further development of DLT-based infrastructures?
- Will this accelerate the use of tokenization?
- Should it be coherent or interoperable with other similar initiatives such as the UK's FMI sandbox?