EU DLT Pilot Regime: What a DLT Market Is (MTF, SS, TSS) and What It Means for Issuers

The DLT Pilot Regime is the EU framework that allows tokenized financial instruments to be traded and settled on infrastructures built on distributed ledger technology (DLT), with exemptions from some requirements of MiFID II, MiFIR and the Central Securities Depositories Regulation (CSDR). It was created by Regulation (EU) 2022/858, which has applied since March 23, 2023 (Art. 19), and it sets out three types of infrastructure, commonly called a “DLT market”: DLT MTF (trading), DLT SS (settlement) and DLT TSS (both). ESMA’s current list, dated January 2026, shows six authorized infrastructures; one is Spanish: Securitize Europe’s DLT TSS, authorized by the CNMV on November 26, 2025.

What a DLT market is under the Pilot Regime

Under Regulation (EU) 2022/858, a DLT market is a “DLT market infrastructure”: a multilateral trading facility, a settlement system or a trading and settlement system that runs on a distributed ledger (Art. 2(5)). It only handles DLT financial instruments, meaning financial instruments that are issued, recorded, transferred and stored using that technology (Art. 2(11)).

The key term is “financial instrument” within the meaning of MiFID II: the instruments listed in Section C of Annex I, such as shares, bonds or fund units. Regulation 2022/858 itself amended the definition in Article 4(1)(15) of MiFID II to expressly include instruments issued by means of DLT (Art. 18). Crypto-assets that are not financial instruments generally fall under MiCA, which excludes from its scope those that are (Art. 2(4)(a) of Regulation (EU) 2023/1114). That is why a DLT market is not a crypto exchange; we explain the line between the two regimes in MiCA vs MiFID II.

The regime exists because market rules were written for book entries, securities accounts and intermediaries. The regulation lets the national authority exempt each infrastructure from specific requirements that do not fit DLT, in exchange for compensatory measures (Arts. 4 to 6). Authorization and supervision are national; ESMA coordinates, may issue a non-binding opinion on the exemptions (Art. 8(7)) and publishes the list of authorized infrastructures (Art. 8(11)). The short definition is in our DLT Pilot Regime glossary entry.

DLT MTF, DLT SS and DLT TSS: the three infrastructures

An applicant that does not yet hold the underlying authorization may apply for it at the same time as the Pilot Regime’s specific permission; in that case, the authority does not assess the requirements for which an exemption is requested (Arts. 8(2), 9(2) and 10(2)). The deadlines are the same for all three types: 30 working days to check that the application is complete, 30 calendar days for ESMA’s opinion where it issues one, and 90 working days to decide once the application is complete, which can be extended if the underlying authorization is requested at the same time (Art. 8(6), (7) and (9), and the equivalent paragraphs of Arts. 9 and 10). A short comparison is in our glossary: DLT MTF, DLT SS and DLT TSS.

Which instruments are eligible: the Article 3 limits

An instrument may only be admitted to trading or recorded on a DLT market if, at that moment, it is one of the following (Art. 3(1)):

• Shares of an issuer with a market capitalization, or tentative market capitalization, of less than €500 million.
• Bonds, other forms of securitized debt (including depositary receipts) or money market instruments with an issue size of less than €1 billion. Instruments that embed a derivative or have a structure that makes it hard for the client to understand the risk are excluded. Corporate bonds from issuers whose market capitalization did not exceed €200 million when the bonds were issued are excluded from the calculation of that threshold.
• Units in collective investment undertakings under Article 25(4)(a)(iv) of MiFID II (non-structured UCITS) whose assets under management are worth less than €500 million.

Each infrastructure also has a cap: the aggregate market value of all the instruments it trades or records may not exceed €6 billion when it admits or records a new one (Art. 3(2)). If it reaches €9 billion, it must activate its transition strategy and notify its supervisor (Art. 3(3)). The calculation uses a monthly average and is reported every month (Arts. 3(4) and 3(5)). The national authority may set lower thresholds (Art. 3(6)), and the Market Abuse Regulation, Regulation (EU) 596/2014, applies to instruments admitted to trading on a DLT MTF or DLT TSS (Art. 3(7)).

Exemptions and obligations of a DLT market

Exemptions are requested case by case, must be proportionate to and justified by the use of DLT, and do not extend to the operator’s other systems (Arts. 4(4) and 5(10)). The main ones are:

• DLT MTF: admitting natural and legal persons that deal on their own account as members, if they meet good repute, competence (including knowledge of DLT) and informed consent requirements, among others (Art. 4(2)), and an exemption from transaction reporting under Article 26 of MiFIR, in exchange for giving the supervisor direct access to its records (Art. 4(3)).
• DLT SS: exemptions from CSDR rules on securities accounts and book-entry form, settlement discipline, outsourcing, participants, access, settlement finality and cash settlement (Art. 5(2) to (9)). If exempted from the settlement finality rules, it must settle close to real time or intraday and no later than the second business day after the trade (Art. 5(7)). If exempted from the cash settlement rules, it settles delivery versus payment: in central bank money, including in tokenized form, where practical and available, and otherwise through the depository’s own accounts, in commercial bank money, also including in tokenized form, or in e-money tokens (Art. 5(8)).
• DLT TSS: may request the exemptions available to both types (Art. 6).

In return, all of them must comply with Article 7: a business plan, public rules and legal terms, rules on how the DLT works, proportionate IT and cyber arrangements, segregation of client assets and a public transition strategy. They are liable for the loss of funds or instruments up to their market value, unless they prove that the loss arose from an external event beyond their reasonable control, the consequences of which were unavoidable despite all reasonable efforts (Art. 7(6)). The specific permission is valid throughout the EU for up to six years (Arts. 8(11), 9(11) and 10(11)).

DLT infrastructures authorized today (ESMA list)

ESMA publishes the list of authorized infrastructures, with the start date of each permission, the exemptions granted and any lower thresholds set by the supervisor (Arts. 8(11), 9(11) and 10(11)). The current version is the January 2026 one, which is the list ESMA’s Pilot Regime page links to as of October 13, 2026.

None has lower thresholds set by its supervisor, and the list gives no end date for any permission. Four of the six combine trading and settlement, and 360X is listed with no exemptions at all.

Spain: the CNMV and Securitize’s DLT TSS

In Spain, the competent authority is the CNMV. On November 26, 2025, its Board authorized SECURITIZE, the first DLT-based trading and settlement system (a DLT TSS) approved by the CNMV, together with its internal operating rules. It is operated by Securitize Europe Brokerage and Markets, S.V., S.A., and the instruments referred to in Article 3(1) of the regulation, including tokenized shares and bonds, may be traded on it, according to the CNMV’s press release. The CNMV takes permission applications through its electronic office, in English and, where applicable, in Spanish.

For a Spanish issuer, the link between the Pilot Regime and national law is Law 6/2023 on Securities Markets and Investment Services (LMVSI). Securities admitted to trading on a trading venue must be represented by book entries or by DLT “within the framework of Regulation (EU) 2022/858” (Art. 6(2)). The issuer prepares an issuance document and files a copy with the entity responsible for the register and, if the securities are admitted to trading, with the market operator (Art. 7). The issuer appoints one or more entities responsible for recording and registration, the ERIR (Art. 8(4)), but when DLT securities are admitted to trading, that responsibility falls on the market infrastructure authorized by the CNMV (Art. 8(5)). The CNMV spells this out in its Q&A on DLT-based financial instruments (question 12): the ERIR’s functions pass to the infrastructure that settles the securities. We cover this in the secondary market for security tokens in Spain and in Law 6/2023 and securities tokenization.

The review of the regime: proposal COM(2025) 943

The regulation provides for its own review: ESMA had to report to the Commission by March 24, 2026 (Art. 14(1)) and published its report on June 25, 2025. With data up to May 31, 2025, it counted three authorized infrastructures (CSD Prague, 21X and 360X) and very little live trading, and it concluded that the thresholds limit participation. It suggested that the Commission consider higher thresholds, make the regime permanent and remove the six-year maximum duration of permissions.

On December 4, 2025, the Commission presented proposal COM(2025) 943 (procedure 2025/0383(COD)), a proposed regulation that would amend several capital markets laws at once, including Regulation 2022/858 (Art. 8 of the proposal). It is a proposal, not law in force. According to the text as presented:

• the instrument-specific limits of Article 3(1) would be deleted and, according to recital 75, the regime would extend to all financial instruments;
• the aggregate cap per infrastructure would rise from €6 billion to €100 billion, with the transition strategy triggered at €150 billion;
• a simplified regime would be created for smaller DLT SSs and DLT TSSs, with a cap of €10 billion (new Art. 7a);
• the DLT MTF would be renamed “DLT trading venue” (DLT TV) and could be a multilateral trading facility or an organized trading facility;
• CASPs authorized under MiCA to operate a crypto-asset trading platform could apply for permission to operate a DLT TV or a DLT TSS;
• permissions would no longer have a maximum duration (recital 90).

Status as of October 13, 2026: the European Parliament’s Legislative Observatory lists the procedure as “Awaiting committee decision.” The committee responsible is ECON; its rapporteur, Markus Ferber, published the draft report on June 11, 2026, and committee amendments were tabled on July 31, 2026. If adopted, the changes to the Pilot Regime would apply 12 months after the regulation enters into force (Art. 15 of the proposal). Until then, the 2022 limits apply.

What it means for an issuer

• The infrastructure applies for the permission, not the issuer. The issuer chooses on which DLT market to admit or record its issue; the infrastructure’s specific permission is valid throughout the EU (Arts. 8(11), 9(11) and 10(11)).
• The instrument must fit Article 3(1) at the time of admission or recording: shares of issuers with less than €500 million in market capitalization, debt of less than €1 billion per issue, or UCITS with less than €500 million. It is worth asking the infrastructure how much headroom it has left under its aggregate cap (Art. 3(2)).
• The type of infrastructure changes the workflow: a DLT TSS trades and settles in the same system; a DLT MTF only trades, and a DLT SS settles and records.
• In Spain, the LMVSI still applies: an issuance document (Art. 7) and a DLT register with the safeguards of Article 6(5); when the securities are admitted to trading, the ERIR’s functions fall on the infrastructure (Art. 8(5)).
• Market abuse: once admitted to a DLT MTF or DLT TSS, the instrument is subject to Regulation (EU) 596/2014 (Art. 3(7)).
• Exit plan: each infrastructure publishes a transition strategy that sets out what happens to issuers and investors if it loses its permission, exceeds the thresholds or ceases operating (Art. 7(7)). Read it before signing.

Frequently asked questions

Is a DLT market the same as a crypto exchange?

No. A Pilot Regime DLT market trades or settles MiFID II financial instruments, such as tokenized shares or bonds, and it is operated by an investment firm, a market operator or a central securities depository (Arts. 8 to 10). A crypto-asset exchange is governed by MiCA, which does not apply to crypto-assets that are financial instruments (Art. 2(4)(a) of Regulation (EU) 2023/1114).

What is the difference between a DLT MTF, a DLT SS and a DLT TSS?

A DLT MTF trades: it matches buy and sell orders. A DLT SS settles: it transfers the securities against payment or against delivery and allows initial recording or safekeeping. A DLT TSS does both in a single infrastructure (Art. 2, points 6, 7 and 10). Of the six infrastructures on ESMA’s January 2026 list, four are DLT TSSs.

Do the €500 million and €1 billion limits still apply?

Yes. As of October 13, 2026, the Article 3 limits of Regulation (EU) 2022/858 and the €6 billion aggregate cap apply. Proposal COM(2025) 943 would remove the instrument-specific limits and raise the cap, but it has not been adopted: it is awaiting a vote in the European Parliament’s ECON committee and, under the ordinary legislative procedure, also needs the Council’s agreement.

How many DLT infrastructures are authorized, and which one is in Spain?

Six, according to ESMA’s January 2026 list: CSD Prague (Czech Republic), 21X and 360X (Germany), Axiology (Lithuania), LISE (France) and Securitize Europe (Spain). The Spanish one is a DLT TSS authorized by the CNMV on November 26, 2025.

Can a CASP operate a DLT market?

Not today with its MiCA authorization: only investment firms, market operators and central securities depositories may apply for the specific permission, although a firm without that underlying authorization may apply for it at the same time as the permission (Arts. 8(2), 9(2) and 10(2)). Proposal COM(2025) 943 would open the DLT TV and the DLT TSS to CASPs that operate a crypto-asset trading platform. If what you need is CASP authorization, we compare the options in MiCA license by country.

How we work at Unknown Gravity

Unknown Gravity is not a market infrastructure, an ERIR, an investment firm or a law firm. We build the technology on the issuer’s or the platform’s side: the smart contracts of the tokenized security, whitelists and KYC, and the integration with the ERIR or the chosen DLT infrastructure, working alongside the project’s legal counsel. Our security token service explains how.

Official sources

• Regulation (EU) 2022/858, DLT Pilot Regime (EUR-Lex)
• ESMA: authorized DLT market infrastructures (January 2026)
• ESMA: report on the functioning and review of the DLT Pilot Regime (June 25, 2025)
• CNMV: approval of SECURITIZE, the first DLT-based TSS (November 26, 2025)
• CNMV: Q&A on DLT-based financial instruments
• Law 6/2023 on Securities Markets and Investment Services (BOE, in Spanish)
• Commission proposal COM(2025) 943 (EUR-Lex)
• European Parliament: Legislative Observatory, procedure 2025/0383(COD)

Framework verified as of October 13, 2026. This content is for information only and is not legal or investment advice. Preparing a tokenized securities issue in the EU? Talk to us.