Art. 3 Conflicts of interest potentially detrimental to clients | RTS on CASP conflicts of interest | MiCA

Article 3 complements Article 2 by shifting the focus from internal conflicts within the crypto-asset service provider itself to conflicts that arise specifically in the context of serving clients.

Where Article 2 deals with identifying conflicts that may affect the provider's own objectivity and impartiality, Article 3 sets out the criteria crypto-asset service providers must consider when identifying conflicts of interest that could damage client interests.

In essence, it provides a checklist of scenarios that signal a potential misalignment between the provider's (or a connected person's) interests and those of the client.

Important points:

Identify conflicts of interest that could damage client interests by assessing whether the crypto-asset service provider or any connected person stands to gain financially or otherwise at a client's expense.
Consider whether the provider has a divergent interest in the outcome of a service, an incentive to favour one client over another, or carries out the same business as a client.
Consider receipt of third-party inducements, whether monetary or non-monetary, as a potential source of conflict when providing services to clients.

For the purposes of identifying the conflicts of interest that arise when providing crypto-asset services and that may damage the interests of clients, crypto-asset service providers shall take into account whether the crypto-asset service provider or any connected person:

is likely to make a financial gain, avoid a financial loss, or receive another benefit, at the expense of the client;
has an interest in the outcome of a crypto-asset service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome;
has a financial or other incentive to favour the interest of one or more clients over the interests of another client;
carries out the same business as the client;
receives or will receive from a person other than the client an inducement in relation to a service provided to the client, in the form of monetary or non-monetary benefits or services.

Article 3 Conflicts of interest potentially detrimental to clients

Relevant recitals