Regulatory Updates

May 2019

 

 

 

Contact the PwC Malta Regulatory Team for further information in relation to any of the updates or if you wish to discuss how these may impact your business.

Welcome

Welcome to PwC Malta’s Regulatory Updates - giving a recap for this month of the main legislative updates and key regulator activity.

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Anti-Money Laundering

MGA News Alert

14/05/2019     MGA and the FIAU hold joint training sessions

Kindly refer to "Gaming".

News alert can be seen here.

 

FIAU Notices

15/05/2019     Final Reminder relating to the Registration on CASPAR online portal system and submission of REQ

The FIAU would like to remind all Subject Persons who have not yet registered on the FIAU’s CASPAR, to proceed with their registration without undue delay. Additionally, those who have completed their registrations but have not yet submitted the Risk Evaluation Questionnaire (REQ), are reminded to do so by not later than the 4th of June 2019. Subject Persons who fail to submit the REQ for 2019 prior to this date may be subject to the imposition of an administrative measure or penalty as laid down in the law.

Notice can be seen here.

 

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Asset Management

MFSA Circulars 

06/05/2019 Circular in relation to Revisions to Rulebooks Applicable to Collective Investment Schemes

The MFSA has recently revised a number of sections in the Rulebooks applicable to Collective Investment Schemes as set out below:

  • Investment Services Rules for Retail Collective Investment Schemes;
  • Investment Services Rules for Alternative Investment Funds; and
  • Investment Services Rules for Professional Investor Funds.

The main updates to the above Rulebooks relate to:

  • Updates emanating from the Money Market Funds (“MMFs”) Regulation;
  • Update on cross sub-fund investments;
  • Other changes relating to cross-selling practices and credit rating of counterparties.

The Circular provides an informative table capturing all the changes made.


MFSA Circular can be seen here.

 

MFSA Consultation Document

08/05/2019 Consultation on Investment Services Rules for Investment Services Providers regarding Encouragement of Long-Term Shareholder Engagement

The SRDII Directive in relation to the encouragement of long-term shareholder engagement came into force in June 2017. SRDII aims to encourage transparent and active engagement by shareholders of listed companies by revising the current Shareholders’ Rights Directive 2007/36/EC. Member States are required to transpose SRDII by the 10th June 2019.

The aim of this Consultation Document is to enable the MFSA to obtain feedback on the proposed changes in the Rulebooks arising from the transposition of SRDII.

SRDII establishes further requirements in relation to the exercise of certain shareholder rights attached to voting shares in relation to general meetings of companies which have their registered office in a Member State and the shares of which are admitted to trading on a regulated market situated or operating within a Member State. It also establishes specific requirements in order to encourage shareholder engagement, in particular in the long term. These specific requirements apply in relation to identification of shareholders, transmission of information, facilitation of exercise of shareholders rights, transparency of institutional investors, asset managers and proxy advisors, remuneration of directors and related party transactions.

Any comments and feedback must be submitted by the 24th May 2019.

Consultation document can be seen here.

 

13/05/2019 Consultation on defining Material Related Party Transactions and Disclosure Requirements as required in terms of the Shareholders Rights Directive II

Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 (hereinafter referred to as the “New EU Shareholders Rights Directive” or the “Directive”) came into force in June 2017 and aims at encouraging transparent and active engagement by shareholders of listed companies by revising the current Shareholders’ Rights Directive. Member States are required to transpose the New EU Shareholders Rights Directive by 10 June 2019.

The SRD II imposes new requirements on Member States such as defining material related party transactions and to ensure that companies publically announce the said transactions. In light of the above, the MFSA has issued a Consultation Document setting out the proposed definitions and amendments to the Listing Rules.

Interested Parties are asked to submit their feedback by not later than Monday 27th May 2019.

Consultation document can be seen here.

 

13/05/2019 Consultation on the Implementation of National Product Intervention Measures in relation to Binary Options

The MFSA has issued a Consultation Document with the aim of obtaining feedback from the industry on the proposed product intervention measures with respect to binary options which the MFSA proposes to take in the terms of its powers under Article 42 of MIFIR.

The Consultation Document provides information on Binary Options, Product Intervention Measures relating to Binary Options as well as the proposed regulatory requirements. The MFSA also set out a number of questions which stakeholders should consider when providing their feedback.

Any feedback shall be submitted to the MFSA by not later than Monday 27th May 2019.

Consultation document can be seen here.

 

13/05/2019     Consultation on the Implementation of National Product Intervention Measures in relation to Contracts for Difference (“CFD”)

The MFSA has issued a Consultation Document with the aim of obtaining feedback from the industry on the proposed product intervention measures with respect to binary options which the MFSA proposes to take in the terms of its powers under Article 42 of MIFIR.

The Consultation Document provides information on CFDs, Product Intervention Measures relating to CFDs as well as the proposed regulatory requirements. The MFSA also set out a number of questions which stakeholders should consider when providing their feedback.

Any feedback shall be submitted to the MFSA by not later than Monday 10th June 2019.

Consultation document can be seen here.

 

MFSA Circular

17/05/2019     Frequently Asked Questions – Implications of a Hard Brexit on the local asset management industry

The MFSA published FAQs in order to provide answers to queries that the Authority has been receiving regarding the implications of a no-deal Brexit scenario (also referred to as Hard Brexit) on the Maltese asset management industry. In certain instances, an equivalence status is applicable in particular scenarios as permitted by the European Union (‘EU’) directives and regulations.

The FAQs revolve around changes to funds’ offering documentation and relevant agreements; brokerage; marketing of UK UCITS & UK AIFS in Malta, marketing of Maltese UCITS and Maltese AIFs in the UK, UK Management Companies managing Maltese Collective Investment Schemes, delegation of investment management, depositary delegation, UCITS asset eligibility and professional investor funds.

FAQs can be seen here.

 

Legal Updates

LN 101 of 2019    COMPANIES ACT (CAP. 386) - Companies Act (Audit Exemption) Regulations, 2019

This legal notice applies to Limited Liability Companies, the shareholders of which are all qualifying shareholders (equivalent to MQF level 3). In this respect, companies will be exempt from the requirement of having their annual accounts audited in respect of their first two accounting periods if the following criteria are satisfied:

  1. annual turnover of the company does not exceed €80,000 (or a pro rata amount if the relevant accounting period is a period over 12 months);
  2. all shareholders of the company are qualifying shareholders; and
  3. an application in the form set out in the First Schedule to these Regulations is made to the Registrar within 6 months from the end of the relevant accounting period.

Legal notice can be seen here.

 

MFSA Circular

30/05/2019    Circular to Licence Holders and Applicants for a Licence: Submission of Applications

This circular addresses the following matters:

a) Submission of new licensing applications and extensions or changes to existing licences – The MFSA would like to remind interested parties that any enquiries and applications for licencing, authorisation and/or approval shall be sent to the dedicated centralised email addresses which are set out in the circular.

b) Process for the appointment of individuals to an approved position – The MFSA informs interested parties that applications for the appointment of individuals to approved positions are deemed to be complete upon the receipt of (i) a duly completed Personal Questionnaire together with all the supporting documentation; and (ii) a suitability assessment prepared by the Licence Holder in line with the requirements set out by the Authority.

There have been a number of improvements to the Online Personal Questionnaire Form namely in relation to the ‘Banker Details Section’ which has now been removed and to the Qualifications and Training section.

Additionally, the ‘Standard Compliance Officer Letter’ and the ‘Standard Money Laundering Reporting Officer Letter’ to individuals appointed as Compliance Officer and MLRO respectively are no longer required.

The MFSA is also discontinuing the practice of requesting submission of the ordinary and extraordinary resolutions subsequent to the approval of or no objection to individuals taking up an approved position or changes to the Constitutional and/or Offering Documentation of Collective Investment Schemes including the appointment of Service Providers.

c) Process for requesting approval for changes to the Constitutional or Offering Documentation of Collective Investment Schemes licenced under the Investment Services Act (Cap. 370) – When seeking the Authority’s approval or no objection to the above documentation, Licence Holders shall keep doing so by submitting a marked-up version in Word format (.docx) showing all the changes being proposed to the last approved version. This shall be done only electronically to the respective email addresses referred to in relation to section (a) above and shall no longer require printed versions to be submitted. Additionally, when the proposed appointment of an individual to an approved position necessitates amendments to the above documentation, such requests shall be accompanied by a marked up version of the latest version of the document.

d) Survey on user experience – The MFSA has launched a survey in order to assess the experience of interested parties when dealing with the Authorisations Department and the MFSA.

Legal notice can be seen here.

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Banking

MFSA Circular

30/05/2019    Circular to Licence Holders and Applicants for a Licence: Submission of Applications

Kindly refer to "Asset Management".

Circular can be seen here.

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Fintech

MFSA Feedback Statement

15/05/2019     Feedback Statement to the Consultation Document on the MFSA Fintech Strategy 

Further to a Consultation Document issued by the MFSA in January 2019 in relation to its Fintech Strategy, the MFSA is now issuing a feedback statement which summarises the feedback received and sets out its response and position thereto.

The Feedback Statement provides overall feedback as well as feedback with respect to the six key pillars identified by the Authority and the attainability of the MFSA Fintech Strategy Vision as well as Threats or Potential Impact.

Overall, the Consultation received positive feedback. The MFSA is proposing to organise a workshop in relation to Pillar I (Regulations). Further details on this workshop, as well as further developments on the other five pillars and the Consultation, will be communicated at a later stage on the MFSA’s Fintech page.

Feedback statement can be accessed here.

 

MFSA Circular

24/05/2019     VFA Agents Approved Courses

The MFSA would like to notify interested parties that the following course has also been approved by the MFSA for the purpose of fulfilling the competence requirements for VFA Agents:

Course Title: Virtual Financial Assets for VFA Agents Programme

Training Provider: Malta Institute of Management (MIM)

Commencement Date: 21 June 2019

Circular can be seen here.

 

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Gaming

MGA News Alert

14/05/2019    MGA and the FIAU hold joint training sessions

The MGA and FIAU held the first of a series of joint training sessions as part of the on-going collaboration between the two entities.

These training sessions were attended by members of various departments within the respective entities. The aim of this training session was to share sector-specific knowledge, industry typologies and best practices. Moreover, MGA personnel went through the detail of the Gaming Act and the how areas of the regulation tie in with AML.

News alert can be seen here.

 

20/05/2019     The MGA signs Memorandum of Understanding with the Malta Police Force

The MGA and the Malta Police Force have entered into a Memorandum of Understanding (MoU) to further increase and improve the efficacy of their co-operation and to strengthen the exchange of information with regards to gaming operations.

This MoU aims at consolidating undertakings in combatting gaming related offences such as instances where parties are involved in joint operations requiring the seizure of objects and other illegal activities. These may include assisting in the prosecution of the aforementioned illegal activities and any other investigative requirements.

News alert can be seen here.

 

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Insurance

MFSA Circular

30/05/2019    Circular to Licence Holders and Applicants for a Licence: Submission of Applications

Kindly refer to "Asset Management".

Circular can be seen here.

 

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Trusts and Fiduciaries

MFSA Circular

30/05/2019    Circular to Licence Holders and Applicants for a Licence: Submission of Applications

Kindly refer to "Asset Management".

Circular can be seen here.

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