DOES DORA APPLY TO YOU?

This covers a manager whose assets under management, including assets acquired through the use of leverage, do not in total exceed EUR 100 million, or an unleveraged manager with assets up to EUR 500 million whose funds grant no redemption rights during the first five years after the initial investment. Such a manager is only subject to registration under Article 3(3) of that Directive — and under Article 2(3), point (a), of DORA it is outside the scope of the Regulation.

Article 4 of the Solvency II Directive excludes insurance undertakings that meet all the stated conditions at once — among them annual gross written premium income up to EUR 5 million and technical provisions up to EUR 25 million — plus conditions on group provisions, on liability, credit and suretyship insurance and on the volume of reinsurance operations. Under Article 2(3), point (b), DORA does not apply to such an undertaking.

This figure decides twice. An institution operating schemes which together have no more than 15 members is outside the scope (Article 2(3), point (c)). An institution with fewer than 100 members is a small institution for occupational retirement provision under Article 3(53) and belongs in the simplified framework under Article 16(1).

Article 2 of that Directive exempts the categories of persons it lists; Article 3 then allows a Member State not to apply the Directive to persons who are regulated at national level, are not allowed to hold client funds or securities, provide only the reception and transmission of orders or investment advice, and transmit orders solely to the institutions listed there. Under Article 2(3), point (d), DORA does not apply to such persons.

For insurance, reinsurance and ancillary insurance intermediaries, size is itself an exclusion from the scope: Article 2(3), point (e), takes them out if they are microenterprises or small or medium-sized enterprises. The Regulation has its own definitions for this in Article 3, points (60), (63) and (64) — a medium-sized enterprise is an entity that employs fewer than 250 persons and whose annual turnover does not exceed EUR 50 million or whose balance sheet does not exceed EUR 43 million.

For institutions exempted pursuant to Directive 2013/36/EU, two things decide. Post office giro institutions under Article 2(5), point (3), of that Directive are excluded from the scope of DORA directly (Article 2(3), point (f)). For the other institutions listed in points (4) to (23), a Member State may use the option in Article 2(4) of DORA and exclude them; where it does not, those institutions belong in the simplified framework under Article 16(1).

Article 2(1), point (f), targets crypto-asset service providers authorised under the Regulation on markets in crypto-assets and issuers of asset-referenced tokens. Without that authorisation you are not on the DORA scope list — which does not release you from the obligations of the Regulation on markets in crypto-assets itself.

Article 2(1), point (r), targets only administrators of critical benchmarks, not benchmark administrators in general. The definition is in Article 3(57) of DORA and refers to Article 3(1), point (25), of Regulation (EU) 2016/1011. Anyone administering only benchmarks that have not been designated as critical is not on the scope list.

Article 3(34) of DORA takes the definition from Article 12(1) of Regulation (EU) 2019/2033: the firm has to meet all nine conditions at once. The ones that usually decide are assets under management below EUR 1.2 billion, a balance sheet total below EUR 100 million, gross annual revenues from investment services below EUR 30 million and zero values for client money and assets held as well as for dealing on own account. A small and non-interconnected investment firm belongs in the simplified framework under Article 16(1).

Article 3(36) of DORA means by this a payment institution benefiting from the waiver in Article 32(1) of that Directive — a person entered in a register instead of holding a full authorisation, whose monthly average of the total value of payment transactions over the preceding twelve months does not exceed the limit set by the Member State and in any case no more than EUR 3 million. Such an institution belongs in the simplified framework under Article 16(1).

Article 3(39) of DORA means by this an institution benefiting from the waiver in Article 9(1) of that Directive — average outstanding electronic money that does not exceed the limit set by the Member State and in no case exceeds EUR 5 million. Such an institution belongs in the simplified framework under Article 16(1).

Under Article 3(60), a microenterprise is a financial entity which employs fewer than 10 persons and whose annual turnover or annual balance sheet total does not exceed EUR 2 million. This is not the same thing as the simplified framework under Article 16 — a microenterprise is not outside the scope, the Regulation merely narrows its obligations in several places.