Nice nick names but rather wide implications
"It is very common to refer to EU regulations and directives with acronyms that sound more like nicknames than the initial capital letters of each word in their title, while obscuring their content. In fact, just mentioning some of the most recent ones that have come into force or are close to being released within the Financial Services domain, such as DORA, MICAR, FIDA, and RIS, sounds amicable and invites all of us to better understand them.
Then, why not explore them, quickly and without pretending to provide a deeper opinion than a glance can offer? First of all, let's find out what the acronyms stand for:
DORA – Digital Operational Resilience Act, adopted in November 2022, to be fully implemented by the concerned parties by January 2025, once the so-called Technical standards are expected to be published.
MICAR – Markets in Crypto-Asset Regulation, in force since June 2023.
FiDA – Financial Data Access, in its approval process at the European Council and Parliament, expected to be released in 18 months, with an adoption period of 18 to 24 months.
RIS – Retail Investment Strategy, still in a consultation phase with the concerned EU country associations, expected to be adopted in 2025-26.
Now, what is their purpose? We will provide a very brief description, available anywhere on the World Wide Web, that is very precise:
DORA – It is a European Union regulation (Regulation (EU) 2022/2554) that creates a binding, comprehensive information and communication technology (ICT) risk management framework for the EU financial sector. One of the Big Four referred to it as "The next big beast on the regulatory horizon."
MICAR - The Markets in Crypto-assets Regulation (Regulation (EU) No 2023/1114) regulates crypto-asset issuance and service provision in the European Union (EU). It is part of the Digital Finance Package published by the European Commission on 24 September 2020, which includes other regulatory initiatives such as the Pilot Regime for market infrastructures based on distributed ledger technology (Regulation (EU) 2022/858) and DORA.
FiDA – It is a draft proposal for a Regulation on Financial Data Access. It introduces Open Finance in the financial sector. But what is Open Finance? In principle, "The open finance initiative builds on the open banking principles laid down under PSD2 and aims at broadening the set of data to be shared within the financial industry, setting rules to regulate how this will be achieved and regulating the market participants," even though we prefer the following description: "Open Finance is the ability to access and act on financial data to build personalized experiences, increase the pace of innovation, and drive industry collaboration. Open Finance enables everyone to access and act on financial data to make intelligent decisions through data insights.
RIS – It is a package of two proposals to amend existing directives (namely, MiFID) and a regulation (namely MiFIR) with a view to fostering retail investor information transparency and ensuring that investment decisions are in the best interest of investors. Again, one of the Big Four, different from the previous one, refers to it as "a threat to the business and revenue models of asset managers and distributors on the horizon."
One last remark before closing this article: all EU acts are (or will be) referred to as "texts with EEA relevance," which means "It designates that an EU directive or regulation applies to EEA countries too, and references to 'Member States' include EEA members and sometimes Switzerland, which, while not an EEA member, has a number of bilateral agreements with the EU. Sometimes, the Texts with EEA relevance apply to it too."
Should we look at these regulations only out of curiosity, or could it be the case to delve a little deeper into their boundaries and potential implications and opportunities? We at Blue Wave Sourcing are available to have an open discussion with anybody interested.
Please find our contact information at http://bluewavesourcing.com/contacts