📢CySEC ISSUES NEW DIRECTIVE ON DLT MARKET INFRASTRUCTURE

On the 17th of June 2025, the Cyprus Securities and Exchange Commission (CySEC) published Directive DI73 - 2009 - 06 concerning the operation of a Distributed Ledger Technology (DLT) market infrastructure in 2025. The Directive aligns with the EU's broader DLT Pilot Regime, established under Regulation (EU) 2022/858 and reflects both CySEC's commitment to innovation and its regulatory prudence.

Core Objectives of the Directive

1. Operational Framework for DLT Infrastructures: The directive lays out a clear operational blueprint for DLT market infrastructures, detailing licensing criteria, governance frameworks, and oversight mechanisms essential for maintaining market integrity

2. Alignment with EU Pilot Scheme: It builds upon the EU’s DLT Pilot Regime, ensuring that Cyprus-based infrastructures are interoperable with other EU-licensed platforms. Particular attention is paid to atomic settlement, custodial processes for tokenised assets, and secured settlement finality

3. Investor Protection & Market Resilience: CySEC emphasises robust investor safeguards. Requirements cover areas such as risk assessments, system resilience, cybersecurity protocols, and transparent communication channels to protect market participants and reassure stakeholders

4. Governance & Compliance Standards: The directive mandates comprehensive corporate governance structures, including risk management systems, record-keeping, and data reporting. This will facilitate effective supervision and consistent compliance with EU regulations like MiFID II and DORA framework

5. Transparency & Reporting Requirements: Participants must submit detailed ongoing reports on transaction volumes, system vulnerabilities, attack logs, and settlement failures. This transparency empowers CySEC to perform real-time supervision and swiftly address emerging risks

Significance for the Cyprus Ecosystem

Cyprus is strategically positioned to lead in fintech innovation within the EU.

By introducing Directive DI 73‑2009‑06, CySEC aims to:

• Attract and support licensed DLT infrastructure operators in Cyprus

• Improve cross-border interoperability through harmonised technical and regulatory standards

• Enhance investor confidence by ensuring regulation supports innovation responsibly

• Strengthen Cyprus’s reputation as a reliable hub for regulated digital market infrastructures

Next Steps

Implementation & Licensing: CySEC will begin accepting license applications under this directive shortly. Interested operators should prepare robust documentation demonstrating governance, technical capabilities, risk frameworks, and compliance procedures.

Stakeholder Engagement: CySEC will likely follow up with technical guidance, workshops, or Q&A sessions (potentially supported by ESMA) to help applicants onboard smoothly and ensure compliance.

Ongoing Monitoring & Iteration: Aligned with EU practice, CySEC envisions iterative updates based on market feedback and observed operational challenges, ensuring flexibility without compromising regulatory objectives.

Directive DI 73‑2009‑06 marks a major step forward for Cyprus as a competitive player in the DLT space. By combining rigorous regulation with the encouragement of innovation, CySEC is signalling that the island is open for responsible, forward-thinking digital finance. The road ahead involves maintaining high standards while leveraging new market opportunities.

How Our Law Firm Can Assist

As Cyprus positions itself at the forefront of regulated innovation through DLT infrastructure, understanding the legal, regulatory, and operational requirements of the applicable Regulation and Directive is essential for any firm or institution looking to participate in this emerging space.

Our firm is ready to support you every step of the way, whether you are:

• Preparing your licensing application to CySEC under the new framework

• Seeking regulatory structuring and legal opinions for your DLT platform or tokenised assets

• Establishing robust compliance mechanisms to meet the Regulation and Directive’s ongoing obligations

• or evaluating the legal risks and opportunities in operating a DLT market infrastructure within the EU

We combine deep knowledge of EU financial regulation, hands-on experience with cryptoasset and fintech licensing in Cyprus, and a forward-thinking approach that ensures your project is both compliant and commercially viable.

Contact info@pelaghiaslaw.com to discuss how we can help you navigate this regulatory milestone and position your business for long-term success in the tokenised economy.