Article 4 Segregation of the liquidity management policy and procedures

This article acts as a scoping and separation rule that governs how the requirements established in Articles 2 and 3 must be applied in practice.

It makes clear that the liquidity management framework is not a one-size-fits-all exercise: issuers must apply those requirements individually for each token they issue, tailoring their approach to the specific assets referenced and their correlation with the corresponding reserve of assets.

On top of this, the article draws a firm boundary between token-related liquidity management and any other liquidity policies the issuer may operate for its wider business activities.

Important points:

• Apply the liquidity risk requirements from Articles 2 and 3 separately for each asset-referenced token or e-money token issued, accounting for the specific assets referenced and their correlation with the relevant reserve of assets.
• Ensure that the liquidity management policies and procedures for token issuance are kept entirely separate, in content and form, from those covering any other activities of the issuer.
• The segregation requirement applies to all issuers of asset-referenced tokens or e-money tokens subject to this Regulation.