Company Service Providers (“CSPs”) - legal updates

• There has been a move from the concept of registration to authorisation for CSPs as defined under the Act. Applicants will be able to submit their applications for authorisation from the MFSA in terms of the CSP Act, through the LH Portal from 16 March 2021 until 16 May 2021. For those CSPs who are already registered with the Authority, their registration will be automatically converted to an authorisation.

• As part of the authorisation process, the applicant must seek authorisation from the Authority to be able to operate under one of the three following classes, depending on the services offered, as provided by the new Schedule to the Act:

  • Class A: CSPs authorised to provide by way of business: i) formation of companies or other legal entities; and/or ii) provision of  registered office, a business correspondence or administrative address and other related services of a company, a partnership or any other legal entity. The classification of the respective class will be determined by the Authority.
  • Class B: CSPs authorised to provide by way of business the services of acting as, or arranging for another person to act as director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities. The classification of the respective class will be determined by the Authority.
  • Class C: CSPs which shall be authorised to provide by way of its business all of the services of a CSP as defined under the Act.

The classification of the respective class will be determined by the Authority.

• Warranted persons (including accountants and lawyers)  offering company services by way of business (further guidance on this matter is included in the Rulebook) will no longer be considered exempt from the provisions of the Act. Following the expiration of 8 months from the first date of the coming into force of the amended Act such persons may only continue to provide company services provided that they have applied for authorisation under the Act within 2 months from the date of coming into force of the Act (i.e. by 16 May 2021), and have duly been authorised by the MFSA. In this respect the amended Act also provides detailed transitory provisions. 
  

• Similarly the exemption is removed for de minimis operators.
  
  
• Persons having a licence, registration or any other authorisation to provide company services, issued by the relevant regulatory authority in an approved jurisdiction, is not subject to authorisation under the Act. However such a person is required, within 90 days, to notify the MFSA of the intention of providing company services, and the MFSA in its discretion will determine the applicable class.
  
  
• The MFSA may now cancel an authorisation, where the authorised person is found liable by the Financial Intelligence Analysis Unit (‘FIAU’) for a serious, repeated or systematic breach of the Prevention of the Money Laundering Act and any regulations issued in terms of this Act;
  
  
• Duty on the auditor of the CSP to report to the MFSA any suspicious matter, including matters which are likely to lead to a serious qualification or refusal of the auditor’s report on the accounts, or a material breach of the applicable legal or regulatory requirements.

• The maximum administrative penalty for contravening or failing to comply with the provisions of the Act or rules or regulations issued in terms of the Act, as well as failure to cooperate with the MFSA has been raised to €50,000.