On September 24, a meeting of the FinTech Association’s working group on the development of CFA was held, during which proposals for creating a system to monitor the financial condition of CFA issuers were reviewed.
At the meeting, representatives of the non-profit organization NRD JSC presented the concept and a demo version of the monitoring system, which allows for the assessment of trends in the financial condition of CFA issuers based, among other things, on financial statements, credit ratings, and information regarding the issuer’s fulfillment of its obligations under the CFAs. In the future, the system will provide investors with a clear picture of the financial well-being of a CFA issuer and help them weigh all investment risks.
Alexandra Vershinina, Director of Digital Financial Assets Development at the FinTech Association:
“The creation of a system to monitor the financial condition of digital financial asset issuers could be an important step toward a mature and truly transparent digital financial assets market. Trust in the instrument and the development of the digital financial assets market as a whole directly depend on the extent to which investors have access to clear and up-to-date information about issuers. We thank the non-profit organization NRD JSC for their work on creating the monitoring system and the law firm KKMP for supporting this initiative.
Partner Anna Maksimenko and attorney Kirill Grechishkin presented a report at the meeting on international best practices in monitoring the financial condition of digital asset issuers, including disclosure requirements (using the examples of regulations in the European Union, the United States, and the UAE).
KKMP Partner Anna Maksimenko:
“International experience shows us which indicators of a digital asset issuer’s financial condition leading global regulators focus on—perhaps it makes sense to align the monitoring system we are discussing today with these same indicators. Second, looking at examples from foreign jurisdictions, we see cases where disclosure is, on the one hand, incomplete, one-time, or insufficient for investors, and on the other hand, overly voluminous and difficult to comprehend (especially for unqualified investors). The monitoring system proposed by the NSD is undoubtedly a step toward meeting investors’ needs. It will allow investors to view all available data in a “one-stop shop” format and over time, helping them make more informed investment decisions.”
