Sibos vox pop: crypto custody and regulation

Sibos, the annual technology conference, takes place this week online and with the theme of ‘Recharging Global Finance’. Though centred mainly on banking, Sibos – which is organised by the banking cooperative Swift – also considers developments relevant to the funds industry and so we asked a number of professional some Sibos-linked questions, starting today Alain Rocher (pictured), head of knowledge management, strategy and market infrastructure, Societe Generale Securities Services.

Will it become obligatory for custodians to have a crypto custody service?

Yes and no, because it all depends firstly on the nature of the cryptoassets concerned and secondly on the meaning given to the term ‘custody’. With regards to cryptoassets, it seems essential to distinguish cryptoassets with an issuer such as security tokens, utility tokens or even stablecoins and cryptoassets without an identifiable issuer such as cryptocurrencies like bitcoin and ethereum. Custody in the classic sense of the term is only possible for tokens with an issuer. For tokens without an issuer, it would be more relevant to speak of ‘position-keeping’ within the meaning of the Ucits and AIF directives. Concerning cryptoassets, when classic custody is not possible, record-keeping is the best option.

What is the most important regulatory development facing asset servicers?

It’s not an easy question because the notion of importance is a bit subjective, as it can depend on the asset services offered but also on regulatory news. However, many consider MiFID/MiFIR, (Market in Financial Instruments regulation) to be the ‘flagship’ of the different regulations governing our businesses. That said, all regulations are of course important. Regarding more particularly our asset services for management companies, it is the Ucits and AIFM directives that structure these activities the most. Currently, our regulatory concerns focus on ‘sustainable finance’ given the very ambitious objectives of Europe and on ‘digital finance’ given the possible impact of new technologies on our intermediation services.

© 2021 funds europe

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