A narrow exemption is a specific, limited exclusion from a general rule, regulation, or legal requirement. This type of exemption applies only under strictly defined conditions and for particular circumstances, preventing its broad application. It is typically granted to address unique situations where strict adherence to the general rule would impose undue hardship or produce unintended negative consequences. Such provisions are precisely delineated to limit their scope.
Context
In the realm of digital asset regulation, discussions frequently involve the potential for narrow exemptions for certain types of tokens or activities. Regulators may consider these to foster innovation while maintaining overall market integrity and investor protection. Debates often focus on defining the precise criteria for such exclusions to prevent regulatory arbitrage or the circumvention of established rules.
Third-country firms must re-architect EU client engagement models, as ESMA's narrow interpretation severely restricts the reverse solicitation exemption.
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