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Regulatory Updates


Welcome to PwC Malta’s Regulatory Updates - giving a month by month recap of  legislative updates and key regulator activity both local and international, relating to various areas including: asset management, banking, insurance, AML/Financial Crime etc.. 

August 2020

Anti-Money Laundering

13/08/2020 - Extension for the Deadline for the Submission of STRs in XML Format

The FIAU informed all subject persons that are obliged to report to the FIAU via XML through the goAML system that the implementation deadline has been extended from 22 August 2020 to 7 September 2020.

Link to FIAU News Publication can be found here.

20/08/2020 - Frequently Asked Questions - goAML 

The FIAU informed subject persons that it has gathered all the technical answers to the questions asked by various subject persons on the new suspicious transaction reporting (‘STR’) system which has recently replaced the old PDF document submission system. The FAQs are categorised by the system functionality and by specific sectors, such as the gaming industry.

FAQ document link can be found here.

21/08/2020 - CBAR System - Updated Project Timeline

The FIAU informed subject persons who are obliged to report to CBAR (i.e. credit and financial institutions that hold payment accounts and bank accounts identified by IBAN and safe custody services within the Maltese territory), that the pilot testing period has been extended from the 21 August 2020 to the 2 September 2020. . The FIAU reminds the respective subject persons that the go live date for the CBAR system is the 10 September 2020 and that they will be required by law to register and submit their XML data every 7 calendar days. The FIAU further emphasised that early access to the CBAR system for the submission of production data before the 10 September 2020 will only be provided once the legal notice has been officially published. The FIAU will be updating the respective subject persons on this matter in the coming days.

Link to FIAU News Publication can be found here.

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Asset Management

13/08/2020 - European Securities and Markets Authority: Guidelines on certain aspects of the MiFID II compliance function requirements

With reference to the Circular issued by ESMA on 25 June 2020 entitled ‘European Securities and Markets Authority: Guidelines on certain aspects of the MiFID II compliance function requirements’, the Authority has updated the following rulebooks: (i) Rule R3-3.2.6 of Part BI of the Investment Services Rules applicable to Investment Services License holders which qualify as MiFID Firms; (ii) SLC 2.19 of Part BII of the Investment Services Rules applicable to UCITS Management Companies; and (iii) SLC 1.28 of Part BIII of the Investment Services Rules applicable to Alternative Fund Managers. The guidelines will be used as a benchmark during the Authority’s on-site inspections when assessing the effectiveness of the compliance function. 

Link to Circular can be found here.

25/08/2020 - Circular on the updates made to the Investment Services Rules applicable to Collective Investment Schemes in relation to reporting of breaches in the Annual Report and Audited Financial Statements

This update is aimed to ensure that PIFs, AIFs and UCITS (“Collective Investment Schemes”) provide relevant information to investors and other stakeholders in relation to their level of compliance with licensing conditions. New rules have been introduced requiring Collective Investment Schemes to disclose breaches of the applicable Standard Licence Conditions, by including a statement in the Directors’ Report or in any prominent section in the Annual Report and Audited Financial Statements regarding breaches which occurred during the relevant reporting period. 

Link to Circular can be found here.

19/08/2020 - ESMA recommends priority topics in AIFMD review

ESMA has highlighted the areas of the Alternative Investment Fund Managers Directive (AIFMD) that should be subject to a forthcoming review, including: (i) harmonising the AIFMD and UCITS regimes; (ii) introduction additional legislative clarifications in the AIFMD and UCITS frameworks with respect to delegation and substance requirements; (iii) making available consistent liquidity management tools; (iv) introdroducing amendments to the current reporting of the gross method calculation in Article 7 of the Commission Delegated Regulation (EU) No 231/2013, to ensure alignment with the IOSCO framework; and (v) harmonising supervision of cross-border entities.

Link to Circular can be found here.

27/08/2020 - Risk parameters in ESMA’s guidelines on stress test scenarios under the Money Market Fund Regulation to be updated

ESMA has confirmed that the 2019 Guidelines on stress test scenarios under the Money Market Fund Regulation (MMFR) will be updated in 2020 to include a modification of the risk parameters to reflect recent market developments related to the COVID-19 crisis. Pending the application date for the 2020 update, all the sections of the 2019 Guidelines continue to apply, including the existing calibrated scenarios and the internal stress test exercise to be carried out by managers of MMFs.

Link to Circular can be found here.

28/08/2020 - ESMA proposes to further postpone CSDR settlement discipline

ESMA has published a final report on draft regulatory technical standards (RTS) definitively postponing the date of entry into force of the Commission Delegated Regulation (EU) 2018/1229 (RTS on settlement discipline) until 2 February 2022. This postponement is due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries by Central Securities Depositaries and a wide range of market participants and follows a request from the European Commission (EC).

Link to Circular can be found here.

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27/08/2020 - Circular to Credit Institutions and Foreign Branches outlining updates on submissions of ITS on Supervisory Reporting Data

The MFSA issued a communication to all credit institutions and foreign branches outlining implementation of updates on resubmissions of ITS on Supervisory Reporting data through the Licence Holder (LH) Portal. In this respect, credit institutions will be notified that whenever a Supervisory Reporting resubmission is made through the LH Portal, the user will be prompted to provide a reason for the resubmission. In view of this, users will be required to select a reason for the specific resubmission from a drop-down menu, which includes most common causes for resubmissions. In addition, credit institutions will also be required to provide additional comments on the selection made, in free text. Both fields will be mandatory for resubmissions.

Link to Circular can be found here.

07/08/2020 - EBA provides clarity on the implementation of the reporting and disclosure framework in the context of COVID-19 measures

The European Banking Authority (EBA) published some frequently asked questions related to the implementation of its Guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis. The technical clarifications provided by the EBA have been included in section 4 of the EBA Report on the implementation of selected COVID-19 policies, first published on 7 July 2020 and will assist supervisors and credit institutions in the implementation of the Guidelines. The said FAQs cover, inter alia, the following topics: (i) EBA-compliance moratoria; (ii) other COVID019 related forbearance measures; (iii) newly originated loans and advances subject to public guarantee schemes in the context of COVID-19; (iv) Interest income and fee and commission income from loans and advancements subject to COVID-19 related measures; and (v) COVID-19 disclosures.

Link to EBA Publication can be found here.

11/08/2020 - EBA publishes guidance on impact of CRR adjustments in response to the COVID-19 pandemic on supervisory reporting and disclosure

The EBA published a revised version of its Implementing Technical Standards (ITS) on supervisory reporting v3.0 and two sets of Guidelines on disclosures and supervisory reporting requirements. These products provide clarifications on the application of certain adjustments on institutions’ disclosures and supervisory reporting introduced in the Capital Requirements Regulation (CRR) in response to the COVID-19.

Link to EBA News Publication can be found here.

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06/08/2020 - Circular to VFA Agents in relation to the authorisation process of VFA Service Providers

Reference is made to R3- of Chapter 3 of the Virtual Financial Assets Rulebook which provides that the MFSA shall not initiate the review of any application which is not complete and that an application shall be considered complete only upon receipt of all required documentation and verification that the application fees have been submitted to the MFSA. For the purposes of expediting the authorisation process of VFA Service Providers (“VFASP”) while respecting the completeness requirement of submitted applications, the MFSA is hereby introducing a cut-off date by when incomplete applications would need to be completed, together with a deadline to respond to any MFSA queries.

Link to Circular can be found here.

13/08/2020 - Circular to VFA Agents in relation to Reporting Obligations

The MFSA has published a revised version of Chapter 1 of the Rulebook applicable to VFA Agents. The amendment to the Rulebook consists of the addition of a sub-section that outlines the reporting obligations for VFA Agents.

Link to Circular can be found here.

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General Application

11/08/2020 - The New EU Sustainable Finance Model

The Circular seeks to provide an outline of the legislative instruments that will come into force within the next 12 months and provide information on other initiatives being undertaken at EU level. At EU level, sustainable finance is a work stream aimed at supporting the European Green Deal by channelling private investment to the transition to climate neutral economy as a complement to public money. The European Commission has been implementing a range of initiatives to meet its international environmental commitments and targets, from its Action Plan on sustainable finance to the EU Green Deal, including the Taxonomy Regulation, Benchmarks Regulation and Disclosures Regulation. Furthermore, the MFSA has also commenced its work on the implementation side and is examining the impact of the proposed changes to the local financial services’ sectors.

Link to Circular can be found here.

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10/08/2020 - Circular on the amendments of Chapter 7 in Part B of the Insurance Distribution Rules

Chapter 7 in Part B of the Insurance Distribution Rules requires authorised re/insurance undertakings, insurance intermediaries and relevant employees (as defined in the rules) to attend a minimum of 15 hours of continuous professional development training annually, which training may be delivered in-house, in a structured manner, by authorised re/insurance undertakings and/or a person registered in the Agents Register or the Brokers Register. In this respect, following the publication of the said Chapter 7, the MFSA has received feedback from the market that this requirement was deemed too restrictive and therefore, amended the said chapter in order to allow in-house training to be delivered by a person who satisfies one of the requirements of paragraph 6.3.1 of Chapter 6 of the Insurance Distribution Rules (being the same requirements applicable to persons eligible to be registered in the Agents/ Managers/ Brokers Register). 

Link to Circular  can be found here.


12/08/2020 - Circular on the amendments to Chapter 6 on System of Governance of Part B of the Insurance Rules

The MFSA is introducing a new requirement in Chapter 6 of the Insurance Rules to address issues observed during on-site and off-site supervisory work. During on-sites conducted by the MFSA, it has identified a lack of compliance with the requirement to notify the MFSA in writing and in a timely manner, prior to the outsourcing of critical or important functions or activities as well as of any subsequent material developments with respect to those functions or activities. In order to address such matters, the MFSA will be introducing a new procedure by amending Section 6.8 of Chapter 6 of the Insurance Rules, thereby introducing the obligation for insurance undertakings to notify the MFSA of its intention to outsource any critical or important outsourcing functions and activities sixty (60) days prior to the outsourcing of critical or important functions. 

 Link to Circular can be found here.


12/08/2020 - Note for Information on the European Commission Public Consultation Document on the Review of Prudential Rules for Insurance and Reinsurance Companies (Solvency II)

On 1 July 2020 the European Commission launched a Public Consultation Paper on the review of prudential rules for insurance and reinsurance companies (Solvency II). The aim of this consultation is to collect feedback from policyholders, consumer associations and financial market stakeholders. 

Link to Circular can be found here.

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31/08/2020 - Circular in relation to the annual information to be provided by the Retirement Scheme Administrator to its Members in line with the Pension Rules for Personal Retirement Schemes issued in terms of the Retirement Pension Act, 2011

The MFSA issued a Circular to clarify the requirements identified in Standard Licence Conditions 5.1.4 and 9.5(e) of the Pension Rules for Personal Retirement Schemes, as well as its expectations as regards to the content that a Retirement Scheme Administrator is expected to include. Retirement Scheme Administrators are expected to update their systems, processes and procedures in order to comply with the MFSA expectations provided in this Circular and ensure that any information or member statements covering periods ending on or after the 31st December 2020 are fully in line with the contents of this Circular.

Link to Circular can be found here.

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Previous Updates

COVID-19 related updates

Beyond the public health emergency we are currently living through, these particular times are presenting unprecedented challenges from a business perspective. The regulatory environment is naturally responding. 

MFSA regulatory reporting deadline extensions

The MFSA issued a circular indicating that it will be making exceptions to the reporting deadlines for some of the submissions/publications due to be made by regulated entities across all sectors by March or April 2020. These include extensions for the submission of audited financial statements, on a case by case basis for credit and financial institutions, investment firms and collective investment schemes, and a two month extensions for insurance intermediaries and pension schemes/service providers. Read the MFSA’s Circular here.

FIAU Risk Evaluation Questionnaires 2020 (REQ) deadline extension

The FIAU issued a notice to Subject Persons notifying them that the late submission penalty fee applicable to REQs submitted between 1 April and 4 May 2020 shall not be applicable. There shall be no ‘late submission’ period, and the only deadline for the submission of the 2020 REQs shall be 4 May 2020 at 17:00hrs unless further extended. Read the FIAU’s Notice here.

MFSA pronouncement on expectation of COVID-19 Contingency and Business Continuity Plans

The MFSA set out its expectation that regulated firms take all reasonable measures in order to have appropriate contingency plans in place to be able to deal with any eventuality, looking to work with industry players to ensure that regulated firms are responding effectively to the evolving situation. Read the MFSA’s press release here.


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