Article 81 Providing advice on crypto-assets and providing portfolio management of crypto-assets

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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; or providing portfolio management of crypto-assetsmeans managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets; shall assess whether the crypto-asset servicesmeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients; or 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; are suitable for their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; or prospective clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, taking into consideration their knowledge and experience in investing in 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;, their investment objectives, including risk tolerance, and their financial situation including their ability to bear losses.

1. provided on an independent basis;

2. based on a broad or on a more restricted analysis of different 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;, including whether the advice is limited to 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; issued or offered by entities having close linksmeans close links as defined in Article 4(1), point (35), of Directive 2014/65/EU; with the crypto-asset service providermeans 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; or any other legal or economic relationships, such as contractual relationships, that risk impairing the independence of the advice provided.

1. assess a sufficient range of 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; available on the market which must be sufficiently diverse to ensure that the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’s investment objectives can be suitably met and which must not be limited to 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; issued or provided by:

   1. that same crypto-asset service providermeans 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;;

   2. entities having close linksmeans close links as defined in Article 4(1), point (35), of Directive 2014/65/EU; with that same crypto-asset service providermeans 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;; or

   3. other entities with which that same crypto-asset service providermeans 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; has such close legal or economic relationships, such as contractual relationships, as to pose a risk of impairing the independent basis of the advice provided;

2. not accept and retain fees, commissions or any monetary or non-monetary benefits paid or provided by any third party or a person acting on behalf of a third party in relation to the provision of the service to clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;.

Notwithstanding point (b) of the first subparagraph, minor non-monetary benefits that are capable of enhancing the quality of crypto-asset servicesmeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients; provided to a clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; and that are of such a scale and nature that they do not impair compliance with a crypto-asset service providermeans 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;’s obligation to act in the best interests of its clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; shall be permitted in cases where they are clearly disclosed to the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;.

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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; shall also provide prospective clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; with information on all costs and related charges, including the cost of advice, where applicable, the cost of 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; recommended or marketed to the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; and how the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; is permitted to pay for the 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;, also encompassing any third-party payments.

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; providing portfolio management of crypto-assetsmeans managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets; shall not accept and retain fees, commissions or any monetary or non-monetary benefits paid or provided by an issuermeans a natural or legal person, or other undertaking, who issues crypto-assets;, offerormeans a natural or legal person, or other undertaking, or the issuer, who offers crypto-assets to the public;, person seeking admission to trading, or any third party, or a person acting on behalf of a third party, in relation to the provision of portfolio management of 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; to their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;.

1. is designed to enhance the quality of the relevant service to the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;; and

2. does not impair compliance with the crypto-asset service providermeans 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;’s obligation to act honestly, fairly and professionally in accordance with the best interests of its clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;.

The existence, nature and amount of the payment or benefit referred to in paragraph 4, or, where the amount cannot be ascertained, the method of calculating that amount, shall be clearly disclosed to the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, in a manner that is comprehensive, accurate and understandable, prior to the provision of the relevant crypto-asset servicemeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients;.

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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; shall ensure that natural persons giving advice or information about 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 a crypto-asset servicemeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients;, on their behalf possess the necessary knowledge and competence to fulfil their obligations. Member States shall publish the criteria to be used for assessing such knowledge and competence.

For the purposes of the suitability assessment referred to in paragraph 1, 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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; or providing portfolio management of crypto-assetsmeans managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets; shall obtain from their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; or prospective clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; the necessary information regarding their knowledge of, and experience in, investing, including in 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;, their investment objectives, including risk tolerance, their financial situation including their ability to bear losses, and their basic understanding of the risks involved in purchasing 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;, so as to enable 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; to recommend to clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; or prospective clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; whether or not the 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; are suitable for them and, in particular, are in accordance with their risk tolerance and ability to bear losses.

1. the value of 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; might fluctuate;

2. the 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; might be subject to full or partial losses;

3. the 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; might not be liquid;

4. where applicable, the 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; are not covered by the investor compensation schemes under Directive 97/9/EC;

5. the 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; are not covered by the depositmeans a deposit as defined in Article 2(1), point (3), of Directive 2014/49/EU; guarantee schemes under Directive 2014/49/EU.

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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; or portfolio management of 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; shall establish, maintain and implement policies and procedures to enable them to collect and assess all information necessary to conduct the assessment referred to in paragraph 1 for each clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;. They shall take all reasonable steps to ensure that the information collected about their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; or prospective clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; is reliable.

Where clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; do not provide the information required pursuant to paragraph 8, or where 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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; or portfolio management of 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; consider that the crypto-asset servicesmeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients; or 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; are not suitable for their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, they shall not recommend such crypto-asset servicesmeans any of the following services and activities relating to any crypto-asset:providing custody and administration of crypto-assets on behalf of clients;operation of a trading platform for crypto-assets;exchange of crypto-assets for funds;exchange of crypto-assets for other crypto-assets;execution of orders for crypto-assets on behalf of clients;placing of crypto-assets;reception and transmission of orders for crypto-assets on behalf of clients;providing advice on crypto-assets;providing portfolio management on crypto-assets;providing transfer services for crypto-assets on behalf of clients; or 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;, nor begin the provision of portfolio management of such 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;.

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; providing advice on crypto-assetsmeans offering, giving or agreeing to give personalised recommendations to a client, either at the client’s request or on the initiative of the crypto-asset service provider providing the advice, in respect of one or more transactions relating to crypto-assets, or the use of crypto-asset services; or portfolio management of 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; shall regularly review for each clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; the suitability assessment referred to in paragraph 1 at least every two years after the initial assessment made in accordance with that paragraph.

1. include an updated information on the assessment referred to in paragraph 1; and

2. provide an outline of the advice given.

The report on suitability referred to in the first subparagraph shall make clear that the advice is based on the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’s knowledge and experience in investing in 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;, the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’s investment objectives, risk tolerance, financial situation and ability to bear losses.

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; providing portfolio management of crypto-assetsmeans managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more crypto-assets; shall provide periodic statements to their clientsmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, in an electronic format, of the portfolio management activities carried out on their behalf. Those periodic statements shall contain a fair and balanced review of the activities undertaken and of the performance of the portfolio during the reporting period, an updated statement of how the activities undertaken meet the preferences, objectives and other characteristics of the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;, as well as an updated information on the suitability assessment referred to in paragraph 1 or its review under paragraph 12.

The periodic statement referred to in the first subparagraph of this paragraph shall be provided every three months, except in cases where a clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; has access to an online system where up-to-date valuations of the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’s portfolio and updated information on the suitability assessment referred to in paragraph 1 can be accessed, and the crypto-asset service providermeans 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; has evidence that the clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services; has accessed a valuation at least once during the relevant quarter. Such online system shall be deemed an electronic format.

1. the criteria for the assessment of clientmeans any natural or legal person to whom a crypto-asset service provider provides crypto-asset services;’s knowledge and competence in accordance with paragraph 2;

2. the information referred to in paragraph 8; and

3. the format of the periodic statement referred to in paragraph 14.