C.1. Application of the proportionality principle

The proportionality principle aims to match governance arrangements consistently with the individual risk profile and business model of issuers of ARTs and CASPs, taking into account the individual position within the management body for which an assessment is made so that the objectives of the regulatory requirements, i.e. that the member is suitable regarding the specific position individually and suitable to be part of the collective management body, are effectively met.

Issuers of ARTs, CASPs and competent authorities should take into account the size of the issuer of ARTs or the CASP, its internal organisation and the nature, scale, and complexity of the assets issued and the services provided when assessing the individual and collective sufficient knowledge, experience and skills of members of the management body and that members individually are capable of committing sufficient time to effectively perform their duties in parallel to other obligatory time commitments they have.

Issuers of significant ARTs should have more sophisticated suitability policies and assessment processes as compared to issuers of non-significant ARTs. The same applies to CASPs, considering their size and the class of crypto asset services provided in accordance with Annex IV of MiCA.

All members of the management body of issuers of ARTs and CASPs should be of sufficiently good repute and have honesty and integrity regardless of the firm’s size, internal organisation and the nature, scope and complexity of its activities, and the duties and responsibilities of the specific position.

For the purpose of applying the principle of proportionality when assessing the suitability of members as regards the knowledge and experience criteria as well as the members ability to commit sufficient time, the following criteria should be taken into account by issuers of ARTs, CASPs and competent authorities:

• a. the size of the issuer of ARTs or of the CASP in terms of the balance sheet total,
• b. the legal form of the issuer of ARTs or CASP and if it is listed or not,
• c. whether the issuer of ARTs or CASP is part of a group, and if so, the proportionality assessment for the group,
• d. the nature and complexity of all business activities,
• e. whether cross borders activities are provided and the size of the operations in each jurisdiction,
• f. in the case of an issuer of ARTs the following additional criteria:

• g. In the case of a CASP the following additional criteria: