4.2 General principles and objectives of the redemption plan

Where the issuer has more than one outstanding issuance of ARTs or EMTs, the redemption plan of each ART or EMT token should appropriately address the interconnectedness between outstanding ARTs and/or EMTs.

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The redemption plan, drafted in accordance with these Guidelines, could contain personal data about directors, third parties or key function holders. In compliance with the principle of data minimisation enshrined in Article 5(1), letter (c), of Regulation (EU) 2016/679⁷ , such personal data should be those deemed necessary and sufficient. When drawing up redemption plans and/or when assessing the redemption plan, issuers and competent authorities, respectively, should comply with the relevant provisions of Regulation (EU) 2016/679. Furthermore, in pursuance of data protection principles, such personal data should be kept for no longer than necessary.

Equitable treatment and no undue economic harm

Issuers should draw up the redemption plan by laying down the actions and process with a view to ensuring an equitable treatment of all token holders, and the protection of the right of redemption attached to the token as described in the crypto-asset white paper in accordance with Annex II and Annex III of Regulation (EU) 2023/1114, respectively for an ART and for an EMT.

For this purpose, the redemption plan should lay down the actions and related processes to ensure among other things the respect of the envisaged time and method for satisfying the right of redemption in accordance with Regulation (EU) 2023/1114 and the white paper.

Unless otherwise disclosed in the crypto-asset white paper or envisaged in the applicable national law, the redemption plan should assume that all token holders with the same redeemable token are treated equally and rank pari passu .

In order to ensure equitable treatment of all token holders as stated in the crypto-asset white paper, the issuer should include in the redemption plan how the individual redemption of claims will be suspended upon the adoption of the competent authority’s decision triggering the implementation of the redemption plan for the orderly and collective redemption of the tokens. For this purpose, the issuer should have regard to the provisions in the crypto-asset white paper and to the applicable law, including Article 46, paragraphs (3) and (4), of Regulation (EU) 2023/1114 and national insolvency law.

Allocation of the reserve of assets to meet the token holders’ redemption claims

Issuers of ARTs and of EMTs subject to the requirement to hold a reserve of assets should develop the redemption plan on the assumption that the remaining reserve of assets underpinning the relevant ART or EMT will be used for the benefit of all token holders’ redemption claim s when the issuer is assessed by the competent authority as being unable or likely to be unable to fulfil its obligations towards such holders. This should be without prejudice to the right of the token holders that the portion of their claim (if any) left unsatisfied by the liquidation of the remaining

7 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Di-rective 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). 16 reserve of assets, should be met by the issuer in accordance with the applicable law, including the applicable insolvency law.

Taking into account that token holders have a right of redemption at all times and that the redemption plan may not impose undue economic harm on token holders, the redemption plan should indicate how the costs for the implementation of the redemption plan – such as for the appointment of consultants or intermediaries, or in connection with the liquidation of the reserve of assets – will be covered.

In order to ensure the effectiveness of the right of redemption and that undue economic harm does not affect the token holders, the issuer should make sure in the redemption plan that the costs for the liquidation of the reserve of assets or otherwise linked to the implementation of the redemption plan may only be allocated to the proceeds of the liquidation of the reserve of assets after the amount for meeting the relevant token holders’ redemption claims is set aside.

Issuers should also clarify in the redemption plan how such costs do not amount, even indirectly, to redemption fees, which pursuant to Articles 39(3) or 49(6) of Regulation (EU) 2023/1114 may not be imposed on the token holders, without prejudice to Article 46(1)(a) of Regulation (EU) 2023/1114.

Costs indicated in the redemption plan should be identified via transparent processes, be reasonable and duly justified.

Paragraphs 22-25 should apply mutatis mutandis to issuers which are not subject to the obligation to hold a reserve of assets, to the extent consistent with the applicable sectoral legislation.

Liquidation of the reserve of assets

In order to meet the token holders’ claims in a n equitable manner and to avoid undue economic harm, issuers of ARTs or of EMTs subject to the requirement to hold a reserve of assets should develop the redemption plan with the aim of ensuring the maximisation of the proceeds from the liquidation of the remaining reserve of assets within a reasonable timeframe.

For this purpose, the issuer should develop redemption scenarios under ordinary and stressed market conditions and lay down liquidation strategies taking into account the composition of the reserve of assets.

Having regard to the requirement that the execution of the redemption plan has not to affect the stability of the market of the reserve of assets, such scenarios and strategies should take into account the materiality of the reserve of assets in the underlying market for such assets.

When developing such scenarios, issuers subject to the requirement to hold a reserve of assets should take into account the liquidity management policy and procedures of issuers as set out in Article 45(3) of Regulation (EU) 2023/1114 and as specified in accordance with Article 45(7)(b) of

17 Regulation (EU) 2023/1114 and the EBA Guidelines on common reference parameters of the stress test scenarios, mandated under Article 45(8) of Regulation (EU) 2023/1114⁸ .

Redemption scenarios should reflect redemption in going concern, in the case of normal insolvency proceedings under national law or in the case of the application of the resolution strategy the issuer would be subject to (if applicable).

For the purpose of developing liquidation strategies, issuers may consider that transactions such as repurchase agreements and security financing transactions may be implemented, if they are instrumental to maximising the proceeds, speeding up the process and limiting the impact on the market where the assets are negotiated.

Paragraphs 31 and 32 should apply mutatis mutandis to issuers which are not subject to the obligation to hold a reserve of assets, to the extent consistent with the applicable sectoral legislation.

Implementation in a timely manner

Issuers should ensure that the redemption plan lays down in a pragmatic and operational manner the actions to be taken immediately and in any case without undue delay by the issuer upon the competent authori ty’s adoption of the decision triggering the implementation of the plan under Article 47(1) of Regulation (EU) 2023/1114.

The redemption plan should also include comprehensive and organised planning of the phases and related actions necessary to the full implementation of the plan and demonstrate that they achieve the orderly redemption of all the token holders and the consistency of such actions with the crypto-asset white paper. Furthermore, the redemption plan should be drawn up in a comprehensive, self-explanatory and easy-to-understand manner, including for third parties.

The phases for the orderly implementation of the plan should include:

• i. immediate follow-up actions to the decision of the competent authority to trigger the redemption plan, including the activation of the internal processes or of the contractual arrangements for the maintenance in operation of the critical activities;
• ii. publication of the communication notice informing the token holders about the process and the timeline to submit their redemption claim and the related content;
• iii. to the extent that it is not included in point (i) above, implementation of the liquidation strategies for the reserve of assets as articulated in the ‘L iquidation of the reserve of assets ’ section above;
• iv. assessment of the redemption claims;

8 EBA/GL/2024/08. Available here: Final report on GL on liquidity stress testing under Article 45(8) of MiCAR (europa.eu). 18

• v. development of a distribution plan, namely the plan to meet all the submitted and positively assessed redemption claims, using the total amount of the proceeds from the liquidation of the reserve of assets for the issuers subject to the requirement to hold a reserve of assets or, for issuers not subject to the requirement to hold a reserve of assets, using the funds available to meet the redemption claims;
• vi. arrangements and the timeline for the settlement of the positively assessed redemption claims.

The redemption plan should indicate each phase and step where the obligations to fight financial crime have to be fulfilled for purposes of the implementation of the redemption plan and in particular of the execution of the redemption process as described in the section below.

In order to meet the requirement that the redemption plan be implemented in a timely manner, the issuer should take into account:

• i. the need to ensure adequate preparedness to support the adoption by the issuer of pragmatic and operational action immediately and in any case without undue delay upon the competent authority’s decision to trigger the implementation of the plan under Article 47(1) of Regulation (EU) 2023/1114;
• ii. the reasonable time to implement the liquidation strategies described in the section on the ‘ Liquidation of the reserve of assets ’ ;
• iii. the reasonable time allocated to the token holders to file their redemption claim as specified in paragraphs 53-56 below;
• iv. the time necessary to verify and settle the redemption claim;
• v. the time necessary to complete the distribution plan having regard to its complexity, including the number of redemption claims that have been submitted.

The issuer should indicate in the redemption plan the envisaged arrangements to ensure the safe custody of the proceeds from the liquidation of the reserve of assets pending the settlement of the redemption claims.