Article 21 Grant or refusal of the authorisation

Summary What does Article 21 of the MiCA regulation say?

This article is the decision-making endpoint of the authorisation process for issuers of asset-referenced tokens, directly following the assessment and consultation stages set out in Article 20.

Competent authorities are given strict timeframes within which to grant or refuse authorisation, and the article sets out the grounds on which refusal is mandatory — covering concerns around the management body, qualifying shareholders, compliance with the regulation's requirements, and risks to financial stability or market integrity.

Notably, a negative opinion from the ECB or a relevant central bank on monetary policy or payment system grounds is a binding trigger for refusal.

The article also establishes notification and transparency obligations upon reaching a decision, including communication to ESMA, EBA, the ECB, and host Member States.

Important points:

Competent authorities are required to grant or refuse authorisation within 25 working days of receiving the opinions referred to in Article 20, with the decision notified to the applicant within a further five working days.
Competent authorities must refuse authorisation if the ECB or a relevant central bank issues a negative opinion on grounds of risk to payment systems, monetary policy transmission, or monetary sovereignty.
EBA and ESMA are required to jointly issue guidelines on assessing the suitability of management body members and qualifying shareholders of asset-referenced token issuers.

Springlex's summary of the article, a reading aid, not a substitute for the legal text.

1. Competent authorities shall, within 25 working days of receipt of the opinions referred to in Article 20(5), take a fully reasoned decision granting or refusing authorisation to the applicant issuer and, within five working days of taking that decision, notify it to the applicant issuer. Where an applicant issuer is authorised, its crypto-asset white paper shall be deemed to be approved.
1. Competent authorities shall refuse authorisation where there are objective and demonstrable grounds that:
  1. the management body of the applicant issuer might pose a threat to its effective, sound and prudent management and business continuity and to the adequate consideration of the interest of its clients and the integrity of the market;
  2. members of the management body do not meet the criteria set out in Article 34(2);
  3. shareholders and members, whether direct or indirect, that have qualifying holdings do not meet the criteria of sufficiently good repute set out in Article 34(4);
  4. the applicant issuer fails to meet or is likely to fail to meet any of the requirements of this Title;
  5. the applicant issuer’s business model might pose a serious threat to market integrity, financial stability, the smooth operation of payment systems, or exposes the issuer or the sector to serious risks of money laundering and terrorist financing.
1. EBA and ESMA shall, by 30 June 2024, jointly issue guidelines in accordance with Article 16 of Regulation (EU) No 1093/2010 and Article 16 of Regulation (EU) No 1095/2010, respectively, on the assessment of the suitability of the members of the management body of issuers of asset-referenced tokens and of the shareholders and members, whether direct or indirect, that have qualifying holdings in issuers of asset-referenced tokens.
1. Competent authorities shall also refuse authorisation if the ECB or, where applicable, the central bank gives a negative opinion under Article 20(5) on the grounds of a risk posed to the smooth operation of payment systems, monetary policy transmission, or monetary sovereignty.
1. Competent authorities shall, within two working days of granting authorisation, communicate to the single point of contact of the host Member States, to ESMA, to EBA, to the ECB and, where applicable, to the central bank referred to in Article 20(4), the information specified in Article 109(3).
2. ESMA shall make such information available in the register, under Article 109(3), by the starting date of the offer to the public or admission to trading.
1. Competent authorities shall inform EBA, ESMA, the ECB and, where applicable, the central bank referred to in Article 20(4), of all requests for authorisations refused, and provide the underlying reasoning for the decision and, where applicable, an explanation for any deviation from the opinions referred to in Article 20(5).

Relevant recitals

Recital 45 Grounds and consultations for refusing authorisation

A competent authority should refuse authorisation on objective and demonstrable grounds, including where the business model of the applicant issuer of asset-referenced tokens might pose a serious threat to market integrity, financial stability or the smooth operation of payment systems. The competent authority should consult EBA, ESMA, the ECB and, where the issuer is established in a Member State whose official currency is not the euro or where an official currency of a Member State that is not the euro is referenced by the asset-referenced token, the central bank of that Member State before granting or refusing an authorisation. Non-binding opinions of EBA and ESMA should address the classification of the crypto-asset, while the ECB and, where applicable, the central bank of the Member State concerned should provide the competent authority with an opinion on the risks to financial stability, the smooth operation of payment systems, monetary policy transmission or monetary sovereignty. The competent authorities should refuse authorisation in cases where the ECB or the central bank of a Member State gives a negative opinion on the grounds of a risk posed to the smooth operation of payment systems, monetary policy transmission, or monetary sovereignty. Where authorisation is granted to an applicant issuer of asset-referenced tokens, the crypto-asset white paper drawn up by that issuer should also be deemed approved. The authorisation by the competent authority should be valid throughout the Union and should allow the issuer of asset-referenced tokens to offer those crypto-assets on the internal market and to seek an admission to trading. In the same way, the crypto-asset white paper should also be valid for the entire Union, without any possibility for Member States to impose additional requirements.

Recital 46 Binding ECB opinions in specified cases

In several cases where the ECB is consulted under this Regulation, its opinion should be binding insofar as it obliges a competent authority to refuse, withdraw or limit an authorisation of the issuer of asset-referenced tokens or to impose specific measures on the issuer of asset-referenced tokens. Article 263, first paragraph, TFEU provides that the Court of Justice of the European Union (the ‘Court of Justice’) should review the legality of acts of the ECB other than recommendations or opinions. It should be recalled, however, that it is for the Court of Justice to interpret that provision in light of the substance and effects of an opinion of the ECB.

Table of contents

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