News on financial regulation in Malta

Recently, the Maltese main financial regulator, the MFSA, has introduced a new circular that aims to advance the procedure of obtaining a financial services license. The updates include:

  • The introduction of a termination date;
  • The introduction of a deadline for a response.

The deadline for completed applications of VFA service providers was set for September 2020; otherwise, their applications were put on pause. If their application was put on hold, a VFA service provider was supposed to stop all operations they conducted in Malta or outside.

During the application two sets of documents are required to be submitted to the financial regulator: Type A and Type B. Type A documentation will be considered enough for obtaining a financial services provider license in Malta.

After the application is submitted, the regulator provides additional comments. Applicants need to fulfill the 3-week deadline for responding to the comments. If this does not happen, the application would be rejected.

Professional agents

Now professional agents are required to channel investments into their accounts as an alternative to turning to the services of intermediaries such as investment managers or advisors.

In order to become a professional advisor, it is necessary to submit a retirement plan proving that an applicant assumes their responsibilities about individual accounts. Also, applicants need to have the required experience and knowledge about the specifics of financial instruments. Another condition is the obligatory working experience in the sector of financial services for a minimum of 36 months while being in a professional or administrative position.

According to the updated regulation, an account of the potential member in the pension scheme is required to have at least five hundred thousand euros.

AML / CFT requirements

It is important to remember that Malta is also a part of the EU. In order to ensure compliance with AML / CFT rules, it was possible to receive consultations about the new guidelines that were provided by ESMA and EBA. The new rules are aimed at amending the ones created in 2017 and will pursue:

  • gender-balanced approach to employment on leading positions;
  • guidance on the BRRD;
  • independence of individuals in affiliated companies.

The consultations were being provided until late October 2020. However, it is still important to pay attention to the updated regulation while opening a business in Malta.

Reporting during COVID-19

The EBA also intended to give even more clarification about the new disclosure and reporting system. For this reason, it has issued a FAQ section on the official website. More specifically, the section is focused on reporting and disclosure problems that can arise during the coronavirus pandemic. All in all, the aim of the support section was to help senior managers of lending institutions to implement the new rules put in place by the ESMA and EBA.

Are you interested in obtaining a financial license in Malta? COREDO provides all necessary assistance and recommendations on this topic.