Welcome
Welcome to PwC Malta’s Regulatory Updates - giving a recap for this month of the main legislative updates and key regulator activity.
Asset Management
FIAU Notice
02/04/2019 Circular addressed to Companies and individuals registered to act as a company service provider (“CSP”) in terms of the Company Service Providers Act
The MFSA would like to notify CSPs that it has fine tuned the Annual Compliance Returns (“ACRs”) for 2019 following industry feedback received in the previous year.
The reporting period for the 2019 ACR will be equivalent to the Registered Persons’ financial year end. The ACR is to be submitted through the Licence Holder Portal (“LH Portal”). The 2o19 ACR is to be submitted within 4 months from the Registered Persons’ financial year-end in case of companies and by the end of April in case of individuals.
MFSA Circular can be seen here.
03/04/2019 Revisions made to Conduct of Business Rulebook
The MFSA would like to notify interested parties that the Conduct of Business Rulebook issued in December 2017 has been replaced with an updated version and may be accessed through the Authority’s website.
The main changes include the following:
1.PRIIPs Regulation – The rules on the key information document emanating from the PRIIPs Regulation have been incorporated into the Rulebook.
2.Requirements for Cross-Selling Practices Applicable to the Securities Sector – New requirements reflecting EMSA Guidelines on cross-selling practices were included.
3.Definitions/Glossary Section – This section has been amended to be in line with the requirements of MiFID II.
4.Other Changes – Other minor changes to the Rulebook have also been made - the circular provides a summary of all the amendments.
09/04/2019 Update Questions and Answers Relating to the Implementation of Market Abuse Regulation (‘MAR’)
The MFSA is addressing this circular to market participants, particularly issuers whose financial instruments are admitted to trading on a Trading Venue and to issuers who have requested that their financial instruments are admitted to a Trading Venue.
In March 2019, ESMA updated its Q&As on MAR with the aim of clarifying the scope of firms subject to the MAR provision to detect and report suspicious orders and transactions, and has included new detailed answers on (i) the meaning of parent and related undertakings and (ii) the disclosure of inside information concerning emission allowances, referring to installations of other undertakings of the group of the Emission Allowance Market Participant.
The circular provides further information on the new Q&As.
MFSA Circular can be seen here.
Legal Updates
LN 75 of 2019 INVESTMENT SERVICES ACT - Supervisory Consolidation (Amendment) Regulations, 2019
This Legal Notice amends the definition ''parent institution''. It also provides amendments with respect to notifications in emergency situations, regarding joint decisions taken on specific prudential requirements and with respect to cooperation with European regulatory authorities and the Commission.
Legal Notice can be seen here.
Anti-Money Laundering
FIAU Notices
03/04/2019 CASPAR User Guide
The FIAU would like to inform subject persons that the User Guide on the registration and completion of REQs has been updated and now includes the printing functionality.
FIAU Notice can be seen here.
04/04/2019 Guidance Note on STR Submission from Remote Gaming Licensees
Kindly refer to the Gaming section.
Guidance Notes can be seen here.
Legal Updates
LN 77 of 2019 PREVENTION OF MONEY LAUNDERING ACT (CAP. 373)- Prevention of Money Laundering and Funding of Terrorism (Amendment) Regulations, 2019
This Legal Notice adds a number of amendments to the principal Regulations, including amendments with respect to group-wide policies and procedures, reporting procedures and related obligations, and includes a new provision dealing with the protection when reporting suspicions of money laundering and funding of terrorism, the prohibition of disclosure and penalties.
Legal Notice can be seen here
Banking
Legal Updates
LN 76 of 2019 BANKING ACT (CAP. 371) - Banking Act (Supervisory Review) (Amendment) Regulations, 2019
This Legal Notice adds definitions for “EU parent institution'' and “parent institution in Malta” in line with the CRR and makes some consequential amendments.
Legal notice can be seen here.
Gaming
FIAU Notice
04/04/2019 Guidance Note on STR Submission from Remote Gaming Licensees
The FIAU has published a Guidance Note addressed to remote gaming licensees entitled Submitting Suspicious Transaction Reports by Remote Gaming Licensees which aims to assist licensees in the submission of STRs.
Guidance Notes can be seen here.
Legal Updates
LN 73 of 2019 GAMING ACT (CAP.583) - Gaming Player Protection (Amendment) Regulations, 2019
The legal notice amends the current regulations by clarifying provisions with respect to dispute resolution. With respect to players being informed about complaint mechanisms, this legal notice includes an amendment requiring operators to make available easily-accessible information to players, clearly informing them of the applicable procedures required to make complaints and the referral of disputes to Alternate Dispute Resolutions (ADR) entities. The legal notice also further clarifies the role of the Player Support Unit.
Legal Notice can be seen here.
LN 74 of 2019 GAMING ACT (CAP.583) - Retention of Data (Malta Gaming Authority) Regulations, 2019
This Legal Notice states that the Authority may retain all data, including any personal data, collected or otherwise processed in the pursuit of its regulatory functions under the Act for a period of ten years from the date when the data is no longer necessary in relation to the purposes for which it is collected, provided that the retention of data, including any personal data, is considered to be necessary in relation to the purposes for which it is collected or otherwise processed, throughout the duration of the validity of any authorisation issued by the Authority.
Legal Notice can be seen here.
Insurance
MFSA Circulars
16/04/2019 Amendments to Insurance Rules
The MFSA would like to inform interested parties of the amendments to Chapter 9 on the Freedom of Establishment and Freedom to provide Services by a European Insurance Undertaking and a European Reinsurance Undertaking.
Chapter 9 contains provisions applicable to European Insurance undertakings when establishing a branch in Malta in exercise of a European right. Sections 9.7 and 9.16 of the said Chapter were amended to make reference to Annex I and Annex II.
Annex I contains the General Good Provisions which apply to a European insurance undertaking establishing a branch in Malta in terms of the European Passport Rights for Insurance and Reinsurance Undertakings Regulations, 2015.
Annex II contains the General Good Provisions for European Insurance Undertakings providing services in Malta through the freedom of services in terms of the European Passport Rights for Insurance and Reinsurance Undertakings Regulations, 2015.
In drafting these provisions, the MFSA has reflected the provisions which apply to insurance intermediaries found in Chapter 16 of the Insurance Distribution Rules, so as to ensure a level playing field in the context of insurance distribution activities.
MFSA Circular can be seen here.
16/04/2019 Amendments to the Insurance Rules relating to the External Audit of the Solvency II regulatory returns
The MFSA would like to notify authorised insurance and reinsurance undertakings and the approved auditors of those undertakings of a number of the amendments made to Chapter 8 of the Insurance Rules.
Paragraph 8.10 was amended in order to make it obligatory for authorised insurance and reinsurance undertakings to submit to the MFSA a copy of the auditor’s management letter and the undertakings’ reply thereto. This requirement shall also applies at group level. In this respect, a new sub-paragraph, 8.10.3 has been added to Chapter 8 of the Insurance Rules.
The said submissions shall be sent via the MFSA web portal in .zip format using the following file name convention UIC_YYMMDD_NR.zip, where YYMMDD is the date of submission.
MFSA Circular can be seen here.
MFSA Consultation Documents
17/04/2019 Consultation on Insurance Rules on the Encouragement of Long-Term Shareholder Engagement
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 Directive introduces a new definition of ‘institutional investor’ which refers to insurance related activities and introduces a new Chapter which is applicable to institutional investors to the extent that they invest directly or through an asset manager in shares traded on a regulated market.
•Engagement Policies
Authorised undertakings falling within the definition of “institutional investors” are required to be more transparent as regards their approach to shareholder engagement. Under the proposed amendments, authorised undertakings will be required to develop and publicly disclose a policy on shareholder engagement or to explain why they have chosen not to do so.
•Investment strategy of an authorised undertaking and arrangements with Asset Managers
Authorised Undertakings will be required to publicly disclose how the main elements of their equity investment strategy are consistent with the profile and duration of their liabilities, in particular long-term liabilities, and how they contribute to the medium and long-term performance of their assets. The MFSA proposes that this information should be available free of charge on the website of the authorised undertakings and to be updated on an annual basis, unless there is no material change.
•Reporting
The information to be disclosed under the proposed Annex III to Chapter 6 of the Insurance Rules, may be included in the report on solvency and financial condition (“SFCR”) of the authorised undertaking.
Any comments and feedback must be submitted by the 3rd May 2019.
Consultation Link Documents can be seen here.
Pensions
MFSA Consultation Document
17/04/2019 Consultation on Pension Rules on Occupational Retirement Schemes on the Encouragement of Long-Term Shareholder Engagement
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 Directive introduces a new definition of ‘institutional investor’ which refers to insurance related activities and introduces a new Chapter which is applicable to institutional investors to the extent that they invest directly or through an asset manager in shares traded on a regulated market.
•Engagement Policies
Occupational Retirement Schemes falling within the scope of institutional investors are required to be more transparent as regards their approach to shareholder engagement. Under the proposed amendments, Occupational Retirement Schemes will be required to develop and publicly disclose a policy on shareholder engagement or to explain why they have chosen not to do so.
•Investment strategy of an occupational retirement scheme and arrangements with Investment Managers
Occupational Retirement Schemes will be required to publicly disclose how the main elements of their equity investment strategy are consistent with the profile and duration of their liabilities, in particular long-term liabilities, and how they contribute to the medium and long-term performance of their assets. The MFSA proposes that this information should be available free of charge on the website of the Occupational Retirement Scheme and to be updated on an annual basis, unless there is no material change.
•Transparency on the Investment Manager
Investment Managers will be required to disclose certain information, at least on an annual basis to Occupational Retirement Schemes. The aim of this increased transparency is to enable Occupational Retirement Schemes to assess whether and how the Investment Manager is acting in their best long-term interests and to assess whether the strategy of the Investment Manager allows for effective shareholder engagement.
Any comments and feedback must be submitted by the 3rd May 2019.
Consultation Document can be seen here.
Trusts and Fiduciaries
MFSA Circulars
02/04/2019 Circular addressed to Companies and individuals authorised as Administrators of Private Foundations in terms of article 43(12)(b) of the Trusts and Trustees Act
Kindly refer to the section on Asset Management (regarding the MFSA’s clarifications in relation to the 2019 Annual Compliance Return).
MFSA Circular can be seen here.
02/04/2019 Circular addressed to Trustees and other fiduciaries authorised in terms of article 43 of the Trusts and Trustees Act
Kindly refer to the section on Asset Management (regarding the MFSA’s clarifications in relation to the 2019 Annual Compliance Return).
MFSA Circular can be seen here.
02/04/2019 Circular addressed to Companies authorised to act as Trustee of Family Trusts in terms of article 43B of the Trusts and Trustees Act
Kindly refer to the section on Asset Management (regarding the MFSA’s clarifications in relation to the 2019 Annual Compliance Return).
MFSA Circular can be seen here.
