AMAFI teamed up with LabEx ReFi, a financial regulation research centre, to prepare feedback to the public consultation on initial coin offerings (ICOs) launched by the AMF in late October (AMAFI / 18-02). In sharing their thoughts on the framework for ICOs, which are currently subject to no regulatory or supervisory measures when proposed to French investors, AMAFI and LabEx ReFi stressed the following:
- Merely setting up best practices, which would not have binding legal force, is not enough given the scale of ICO-related risks, which are often very imperfectly gauged by participants.
- It would be detrimental if offerings ran into trouble because of a lack of regulation and ended up hindering the development of ICOs or damaging the financial system's image more generally.
- Material adjustments would be needed to insert ICOs into the existing legal framework, notably the Prospectus framework and the regime governing intermediaries in miscellaneous assets. But even so it would be impossible to capture all possible situations, especially since these are far from set in stone.
- The preferred route should be to establish a specific framework applicable to all forms of ICOs. This would be the way to capture the specific features (e.g. target investors, technical level, speed, fundraising amount and so on) of different offerings irrespective of their nature, while safeguarding public savings and enhancing the appeal of the Paris financial centre. Various proposals along these lines were put forward.
More generally, AMAFI and LabEx ReFi expressed their wish to participate actively in the AMF's discussions on these topics.