The European Securities and Markets Authority (ESMA) is seeking stakeholder input on the use of distributed ledger technology for securities trading and settlements. 

The European Union’s securities regulator recently published a “call for evidence” to invite stakeholders to share their feedback on the regulations for regulatory technical standards (RTS) on reporting and transparency on the DLT pilot expected to be implemented next year. 

Some of the main functions of ESMA include strengthening the protection for EU investors, enhancing financial markets, and fostering cooperation between members. 

With the call for evidence, the EU regulator’s objective is to see whether regulatory standards concerning trade transparency and data reporting need to be revised to apply to tokenized securities running on DLT.

According to ESMA’s official website, the aim is to “ensure more efficient, secure, and cost-effective management of the data stored on DLTs while preserving its quality, usability and comparability.”

Stakeholders are called to also share their views on ways to provide regulators with information pertaining to “transactions, financial instruments data, and transparency data.” 

After sending in the feedback, the EU regulator will determine whether amendments to the RTS are required. If so, the ESMA will once again consult before submitting a final draft to the European Commission for implementation.

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