The recent pilot regime established by the Financial Markets Authority (AMF) provides an innovative framework for the intermediation of financial securities in market infrastructures based on DLT technology (Distributed Ledger Technology). This new regulation clearly outlines the conditions for intermediation between securities owners and the relevant infrastructures, while establishing the obligations imposed on intermediation service providers. The main objective is to promote innovation while preserving investor protection and market integrity.
The objectives of the pilot regime
The pilot regime is part of an initiative to modernize market practices, accompanied by European regulation, notably Regulation (EU) 2022/858. This framework allows for the experimentation of new exchange and settlement mechanisms that leverage new technologies to make these operations more efficient. Thus, the regime paves the way for new approaches regarding stocks, bonds, and shares of collective investment undertakings (UCITS), in a secure environment for all stakeholders.
The intermediation criteria defined by the AMF
The AMF has established specific criteria to regulate the intermediation of financial securities within the pilot regime. These criteria define the obligations of intermediation service providers, who must act in compliance with regulatory requirements. Among these requirements is the necessity to obtain a specific authorization before operating within this pilot framework. This authorization is essential to ensure that market infrastructures meet the quality and safety standards necessary for the smooth operation of transactions.
The relationship between securities owners and market infrastructures
The implementation of the pilot regime strengthens the relationship between securities owners and market infrastructures utilizing DLT technology. The AMF has outlined the fundamental role of intermediation, which facilitates the transfer of property rights on these securities while ensuring that the processing of operations is smooth and secure. The intermediary must therefore be able to navigate between the needs of investors and the demands of market infrastructures, while ensuring transparency and traceability of operations.
Investor protection and market integrity
One of the main challenges of the pilot regime established by the AMF is to ensure investor protection. The measures taken are intended to guarantee transaction security and prevent any form of fraud. At the same time, the regulatory framework aims to maintain market integrity by ensuring that all transactions carried out within these infrastructures are based on rigorous protocols and comply with established standards. These actions aim to strengthen investor confidence in new technologies and encourage their adoption.
The evolution prospects of the pilot regime
The pilot regime is designed to evolve and adapt over time. The AMF and other financial authorities, such as the Bank of France and the ACPR, closely monitor the impact of these new regulations on financial markets. Specific entry points have been defined for actors wishing to submit their application and benefit from exemptions and compensatory measures. This demonstrates a willingness to support innovative projects while ensuring a balance between innovation and regulation.
For a deeper understanding of the issues related to DLT technology and the regulations in force, you can consult articles such as this analysis on myths around blockchain, or explore how blockchain is used in various sectors via this link: the use of blockchain. You can also discover innovative projects in the sector, such as those described in our article on Nicolas Bets and his approach to blockchain in art and photography.
