Title I - Application of the proportionality principle

Issuers of ARTs and competent authorities should have regard to the principle of proportionality when applying and implementing these guidelines with a view to ensuring that the governance arrangements are consistent with the individual risk profile of the issuer of ARTs and the group, where applicable, commensurate with its size and internal organisation, relevant to its business model, suitable for the nature, scale and complexity of its activities and sufficient to effectively achieve the objectives of the relevant regulatory requirements and provisions.

For the purpose of applying the principle of proportionality and to ensure the appropriate implementation of the governance requirements of Regulation (EU) 2023/1114 as further specified by these Guidelines, issuers of ARTs and competent authorities should take into account the following criteria:

• a. the size of the issuer of ARTs in terms of the balance sheet total;
• b. the legal form of the issuer of ARTs;
• c. whether the issuer of ARTs is listed or not;
• d. the classification of the asset-referenced token issued as significant or non-significant pursuant to Articles 43 and 44 and Articles 56 and 57 of Regulation (EU) 2023/1114
• e. the specifics, volume and number of ARTs issued;
• f. whether the ARTs issued are admitted to trading;
• g. the consensus mechanism used to issue and validate the ARTs;
• h. the nature and complexity of all business activities;
• i. the type of authorised activities and the services performed;
• j. whether cross borders activities are provided and the size of the operations in each jurisdiction;
• k. the size of the reserve of assets;
• l. the type and complexity of the assets a token is referenced to;
• m. whether the holders of ART are retail holders or not;
• n. the use of third-party service providers;
• o. the distribution channels used, including the ones provided by third-party service providers; and
• p. the existing information and communication technology (ICT) systems, including business continuity measures and the use of ICT third-party entities as referred to in paragraph 5, first subparagraph, point (h), Article 34 of Regulation (EU) 2023/1114.

Issuers of ARTs that are managed by a single natural person should have alternative arrangements in place which ensure the sound and prudent management of such issuers and the adequate consideration of governance arrangements including by providing for adequate checks and balances in decision making.