ESMA have provided an indication of how they would envisage the market structure looking to accommodate for a compliant sector benefiting from the advantages DLT has to offer.

This would involve authorising particular institutions to host DLT; “permissioned DLT networks would make the most sense for financial markets. Under this framework, participation would be restricted to authorised parties only.” Report on Trends, Risks and Vulnerabilities No.2 2017 (ESMA, Nov 17)

“The governance framework that would apply to DLT networks would bear resemblance to the rules governing the existing market infrastructure and central authorities, such as Central Counterparties (CCPs) or Central Securities Depositories (CSDs) today. Indeed, depending on the services that they intend to provide, DLT networks may fall under the scope of EMIR, MiFIR, SFD11 and CSDR and the existence of a CCP or CSD may be mandatory” Report on Trends, Risks and Vulnerabilities No.2 2017 (ESMA, Nov 17)