van Cutsem Wittamer Marnef & Partners​ LEADING GLOBAL NETWORK MACKRELL INTERNATIONAL IN CHAMBERS GUIDE AS FOR EIGHTH YEAR RUNNING.

Insights

The Fiduciary Nature of the Trustee’s Obligations

As underlined in the Civil Code, Chapter 16 of the Laws of Malta, fiduciary obligations arise by virtue of law, contract, quasi-contract, unilateral declarations including wills, trusts, assumption of office or behaviour whenever a person (the “

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Changes to the Appendix 2B Fund Manager Return

On the 21st July 2021, the Malta Financial Services Authority (“MFSA”) issued a circular regarding the changes to Appendix 2B Fund Manager Return, triggered by the Investment Firms Regulation and Directive (“IFRD”). The purpose of the circ

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The Concept of Trust under Maltese Law

Although the English law concept of trust was already present in Malta since the late 1980s through the concept of ‘offshore trusts’, the first written legislation regulating domestic Maltese trusts came into force in 2004 through the enactmen

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An update on the FATF greylisting of Malta

During its last plenary session, held on the 23rd June 2021, the Financial Action Task Force (“FATF”) voted to insert Malta in its list of countries that have been identified as having strategic anti-money laundering (“AML”) deficiencies,

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Classes under the revised CSP Regime

The Company Service Providers Act, Cap 529 of the Laws of Malta, as revised by Act L of 2020, extends the requirement of authorisation to persons that had previously been exempted from authorisation and supervision from the Malta Financial Service

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CSP Exemption Notification

On the 16th March 2021, the Legal Notice 105 of 2021, Company Service Providers (Exemptions) Regulations, 2021 came into force. These regulations identify persons who are exempt from obtaining authorisation is terms of the Company Service Provider

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Compliance Supervision of Fund Managers

In 2020, as part of its oversight and prudential supervision, the Securities and Markets Supervision function within Malta Financial Services Authority (the “MFSA”) carried out several onsite visits to the offices of companies involved in inve

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Monitoring through Compliance Visits

As part of its monitoring role, the Compliance Function should carry out frequent onsite visits at the offices of the regulated entity the compliance of which is under its responsibility. For the purpose of these compliance visits and their freque

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Non-performing loans and COVID-19 related Moratoria

On the 6th April 2021, the Malta Financial Services Authority (“MFSA”) issued a publication predominantly directed to credit institutions, highlighting that due to the COVID-19 pandemic many businesses and households have experienced financial

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Outsourcing of Compliance Function

Subject to certain limitations and requirements, including the existence of objective reasons, where applicable, the regulated entities are allowed to outsource the carrying out of compliance tasks to third parties. It is practice that in order to

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Permanence of the Compliance Function

Most of the applicable laws and regulations require the regulated entities to ensure that the Compliance Function performs its tasks and responsibilities on a permanent basis. These entities are expected to have a Compliance Function in office at

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European Crowdfunding Service Providers Regulation

On the 15th March 2021, the Malta Financial Services Authority (“MFSA”) issued a circular on the European Crowdfunding Service Providers Regulation (the “Regulation”) informing the industry of the incoming implementation of the Regulation

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The Compliance Policy

The purpose of the Compliance Policy is to set out high level principles, and to outline the policies, measures, and controls that the regulated entity has in place in order to ensure that the decisions and actions are in compliance with the rules

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The Independence of the Compliance Function

Independence is one of the fundamental principles of compliance and any regulated entity shall strive to establish and implement measures and controls in order to ensure that the duties performed, and the decisions taken, by the Compliance Functio

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Compliance Risk Assessment

We touched upon the obligation of the Compliance Function to conduct a risk assessment in our write up concerning the Compliance Monitoring Program, highlighting that such program should be grounded on the assessment of the relevant major risk fac

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Common Supervisory Action on Product Governance Rules

The Conduct Supervision Function within the Malta Financial Services Authority is currently conducting a number of focused on-site inspections at investment firms to assess the application of product governance rules adopted by the selected firms.

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The Effectiveness of the Compliance Function

The ultimate purpose of the monitoring and reporting obligations allocated to the Compliance Function is to ensure that the compliance risks inherent in the investment activities and services undertaken by the regulated entity are duly mitigated a

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Compliance Report – What to report on!

As part of its responsibility to ensure that the Company complies with its obligations under MiFID II, the senior management must ensure that the compliance function fulfils the requirements set out in Article 22 of the MiFID Delegated Regulation.

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Compliance Monitoring Program

The scope of the Compliance Monitoring Program is to analyse and suggest methods which will be applied throughout the compliance year in order to ensure the compliance of the company with legislation, rules and regulations applicable to entities l

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ESMA – Public Statement on Reverse Solicitation

On the 13th January 2021, the European Securities and Markets Authority (“ESMA”) issued a public statement reminding firms falling under MiFID II on the requirements applicable to the provision of investment services to retail or professional

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Germany’s Legislation on Electronic Securities

On the 16th December 2020, the German cabinet passed a draft legislation intended to allow the possibility for shares to be issued and registered in an electronic manner. This move has been applauded by stakeholders as it follows the German govern

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Investment Firms Regulation Package

On the 10th December 2020, the Malta Financial Services Authority (“MFSA”) issued a circular as the 1st briefing to the industry on the impending implementation of the Investment Firms Regulation (“IFR”) package. The package consists of th

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Consultation document on the CSP Rulebook

On the 1st December 2020, the Malta Financial Services Authority (“MFSA”) issued a consultation document on the updated Company Service Providers (“CSPs”) Rulebook. The updates to the CSP Rulebook will be applied in order to align such Rul

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Revisions to the Loan Funds Regime

On the 10th November 2020, the Malta Financial Services Authority (the “MFSA”) issued a circular informing the industry on the revisions made to the Loan Funds Rules, that shall apply as from the date of the issued circular. The new rules shal

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Amendments to the Company Service Providers Act

On the 13th October 2020, the Parliament of Malta sat for the second reading of the Company Service Providers (Amendment) Bill  (the “Bill”) which is to effect the amendments envisaged by the Malta Financial Services Authority in its feedback

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The European Commission’s Digital Finance Package

On the 24th September 2020,  the European Commission (“EC”) issued its digital finance package consisting of a digital finance strategy and regulatory suggestions on crypto-assets and digital resilience in order to push for a competitive EU f

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ESMA’s Report on the Market Abuse Regulation

On the 24th September 2020 the European Securities and Markets Authority (“ESMA”) published a report containing its review on the appropriateness of the Market Abuse Regulation (“MAR”). The report has concluded that, in general the MAR has

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The Effect of Brexit on Information Society Services

On the 2nd September 2020, the Malta Financial Services Authority (“MFSA”) issued a Circular outlining the effect of Brexit on the applicability of Directive 2000/31/EC (the “Directive”) which covers a broad range of online activities. The

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Additions to the Collective Investment Schemes Rules

On the 25th August 2020, the Malta Financial Services Authority (“MFSA”) issued a circular on the updates made to the Investment Services Rules (the “Rules”) applicable to Collective Investment Schemes. The Rules have been updated by addin

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The EU’s transition towards Sustainable Finance

On the 11th August 2020, the Malta Financial Services Authority (the “MFSA”) issued a circular on the initiatives undertaken by the EU on sustainable finance while also providing an outline of the legislative instruments that will come into fo

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Record keeping obligations imposed on licence holders

By means of a notice issued by the Malta Financial Services Authority (the “MFSA”) on the 15th July 2020, the MFSA reminded all licence holders of their obligations in relation to record keeping. In order to ensure consumer protection, complia

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Amendments to the Investment Services Rules

On the 3 July 2020, the Malta Financial Services Authority (the “MFSA”) notified firms classifying as MiFID firms, Fund Managers and Collective Investment Schemes  (the “Licence Holders“) that various amendments had been carried o

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Regulatory Reporting following the outbreak of COVID-19

On the 30th June 2020, the Malta Financial Services Authority (the “MFSA”) issued a circular making reference to its previous circular relating to the regulatory reporting due to the outbreak of COVID-19, where the MFSA had informed its market

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Amendments to the Companies Act

Various Financial Services Laws (Amendment) Act By means of Act V of 2020, Various Financial Services Laws (Amendment) Act, various financial services laws have been amended, including amendments to the Companies Act (the “Act”), Chapter 386 o

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MFSA issues Circular addressed to MiFID Firms

On the 8th May 2020, the Malta Financial Services Authority (the “MFSA”), issued a Circular addressed to Investment Services Licence Holders which qualify as MiFID Firms (the “Licence Holders”), where the MFSA noted that even though the C

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FATF issues Guidance on Digital Identity

The Financial Action Task Force (“FATF”) has recently issued a Guidance on Digital Identity (the “Guidance”) intended to aid governments, financial institutions, virtual asset service providers and other regulated entities to determine whe

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Submission of Risk Evaluation Questionnaire 2020

On the 20th April 2020, the Financial Intelligence Analysis Unit (the “FIAU”) issued a notice to remind all Subject Persons to submit the Risk Evaluation Questionnaire (the “REQ”) by not later than the 4th May 2020 at 17:00. Moreover, the

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Cybersecurity risks during the COVID-19 outbreak

On the 26 March 2020, the Malta Financial Services Authority (the “MFSA”) has issued a Circular addressing the unprecedented cybersecurity risks that the COVID-19 pandemic has brought upon the financial services sector. As many licence holders

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Regulatory reporting deadlines amid COVID-19 outbreak

On the 21st March 2020, the Malta Financial Services Authority (the "MFSA") issued a circular in relation to the timing of regulatory reporting in view of the current outbreak of COVID-19. Indeed, as stated in various communications issu

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Regulatory reporting deadlines amid COVID-19 outbreak

On the 21st March 2020, the Malta Financial Services Authority (the “MFSA”) issued a circular in relation to the timing of regulatory reporting in view of the current outbreak of COVID-19. Indeed, as stated in various communications i

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Contingency preparedness of Financial Institutions

Following the notice on the interim supervisory measures delineating the measures to be taken by the Malta Financial Services Authority (“MFSA”) in supervising licensed entities during the recent pandemic, the MFSA circulated another notice re

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Contingency Planning in light of COVID-19

The Malta Financial Services Authority ("MFSA") has recently issued a circular addressed to all licence holders providing its expectations contingency planning in light of the COVID-19 outbreak and which is applicable to Investment Firms

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The EU Benchmarks Regulation

The MFSA has recently issued two Circulars in relation to Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the perfo

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Updates to the Anti-Money Laundering Directive – Part II

The following is the second part of an article which provides an overview of the major changes brought forward by the Fifth Anti-Money Laundering Directive. E-money and prepaid cards There is now increased transparency regarding e-money products b

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European Union Regulatory Framework for Crypto-Assets

It is crucial that Europe grasps all the potential of digital age and strengthens its industry and innovation capacity, within safe and ethical boundaries. Digitalisation and technology are significantly transforming the European financial system

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Revised Financial Institution Rules

The Malta Financial Services Authority (“MFSA”) has recently revised Financial Institution Rules FIR/01, FIR/02 and FIR/03 (the “Rules”) with the aim to reflect the recent amendments in the Financial Institutions Act, Chapter 376 of the La

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Pillar 1 – MFSA Regulatory Sandbox – Part II

In our recently published article on the Regulatory Sandbox (the "Sandbox") being proposed by the Malta Financial Services Authority (the “MFSA”), we presented that this Sandbox could be a great possibility for financial technology (

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MFSA’s Circular to VFA Service Providers

The Malta Financial Services Authority ("MFSA") has today issued a Circular to Virtual Financial Asset Service Providers (the "Circular") addressed to those persons availing themselves of the transitory provision set out in Art

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Revisions to the Conduct of Business Rulebook

The MFSA has recently carried out a number of changes to Conduct of Business Rulebook (the “Rulebook”) originally issued by the Malta Financial Services Authority (“MFSA”) on the 20th of December 2017. Indeed, following ESMA’s renewal of

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Circular on Internalised Settlement Reporting Obligations

The Regulation (EU) No. 909/2014 on improving securities settlement in the European Union and on central securities depositories (the “CSDR”) plays a pivotal role for the harmonisation of the settlement of financial instruments in the European

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Guidance Documents issued by the MFSA and the FIAU

Guidance Document for Credit Institutions, Payment Institutions and Electronic Money Institutions opening accounts for FinTechs On the 18th June 2019, the Malta Financial Services Authority (“MFSA”) and the Financial Intelligence Analysis Unit

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Updates on the Conduct of Business Rulebook

The Malta Financial Services Authority (“MFSA”) has published on 3th April 2019 an updated version of the Conduct of Business Rulebook (“Rulebook”). This Rulebook contains the Conduct of Business Obligations to which the Regulated Persons

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Consultation Document on MFSA’s FinTech strategy

The Malta Financial Services Authority (“MFSA”) has published a Consultation Document on its FinTech strategy (“Consultation Document”), with the aim of adopting a strategy where the MFSA focuses its efforts towards supporting such industr

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Circular to Issuers of Virtual Financial Assets

The Malta Financial Services Authority (“MFSA”) has issued a Circular to Issuers of Virtual Financial Assets (the “Circular”) identifying the way forward for Issuers of Virtual Financial Assets (“VFA”). The Circular caters for VFA Issu

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The MDIA publishes guidelines to Systems Auditors

The newly established authority, the Malta Digital Innovation Authority (“MDIA”), which will be responsible for certifying Innovative Technology Arrangements and recognising service providers, such as Systems Auditors and Technical Administrat

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The MGA’s Key Function Certificate Requirements

As of the 1st July 2018, the new Gaming Act will require licensees to identify the persons responsible for the key functions, who will be issued with a Key Function Certificate following the Malta Gaming Authority’s (“MGA”) assessment of the

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Progress in the EU’s Digital Single Market Strategy

Three years after the EU adopted the Digital Single Market Strategy, progress has been made, with 12 legislative proposals out of 29 being agreed by the European Parliament and the Council. Major new laws such as the GDPR and the end of mobile roa

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Malta | A hub for crypto-related projects

It has become a well-known fact that Malta is aiming to be a leader in regulating Distributed Ledger Technology (DLT), cryptocurrencies and ICOs. In fact, three new laws regulating this area have been proposed and presented to the Parliament and

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The role of the VFA Agent

The Virtual Financial Assets Act (VFA Act), which should enter into force in the coming days once approved by Parliament, requires an issuer of Virtual Financial Assets (VFAs) to appoint and have in place a VFA agent at all times. Moreover, an a

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The Financial Instrument Test

The MFSA has today issued its Consultation Paper on the Financial Instrument Test. The Financial Instrument Test is a very important process in determining whether a token falls within the definition of ‘financial instrument’ under the Markets

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The Technology Arrangements Bill

Further to regulating the area of Blockchain, Virtual Currencies and Innovation, apart from the MDIA Bill, the Consultation Document also provides information on the proposed Technology Arrangements Bill (“TAS Bill”) aimed at regulating T

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PIFs investing in Virtual Currencies are now regulated

Professional Investor Funds (“PIFs”) investing in Virtual Currencies (“VCs”) are now regulated through the supplementary conditions applicable to such schemes. The additional provisions found in the new section, which is applicable to PIFs

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New EU Rules on Securitisation

This week, the Council of Europe adopted new rules aimed at facilitating the development of a securitisation market in Europe by defining and differentiating simple, transparent and standardised (“STS”) Securitisations. The simple, transparent

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Blockchain & Bitcoin Conference to be held in Malta

If you are interested in the field of blockchain and cryptocurrencies, you should not miss the Blockchain & Bitcoin Conference Malta which will be held in Malta on the 7th of December. Entrepreneurs, investors, consultants and IT specialists

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Market Abuse Regulation Q&A

ESMA has recently updated it Question and Answers documents in relation to the Market Abuse Regulation. The following is a summary of the salient points: Persons professionally arranging or executing transactions: this category is not only limited

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The Fourth Anti-Money Laundering Directive

The Fourth Anti-Money Laundering Directive (the “4th AMLD”) which came into force on the 26th June 2015, recasts the previous third Anti-Money Laundering Directive (the “3rd AMLD”) and takes into account the 40 new recommendations adopted

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NAIF Consultation Document on the Proposed Amendments

The Malta Financial Services Authority (the “MFSA”) has recently published a Consultation document on the Proposed Amendments to the Notified Investment Funds Regime (NAIFs). Proposed Changes The proposed changes seek to allow the possibility

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The Skill Games Regulations (S.L. 438.11)

The Skill Games Regulations (the “Regulations”) were recently enacted and are applicable to skill games organised in Malta, provided from Malta or promoted or offered to persons in Malta. The Regulations establish certain objectives pursuant t

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Overhaul of the Maltese Gaming Sector

The Malta Gaming Authority (the “MGA”) has recently published a White Paper (the “White Paper”) proposing major amendments to the current legal framework. The intended reforms will eventually repeal the existing legislation and pave the wa

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Protected Disability Trusts

On the 7th of October 2016, the Trusts and Trustees (Protected Disability Trusts) Regulations (the “Regulations”) came into force by virtue of Legal Notice 324 of 2016. The aim of the Regulations is to provide for the establishment and adminis

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Details of the Notified AIF Regime

Introduction Externally managed funds in Malta, and in other European jurisdictions, are effectively regulated both at fund management level and at fund level. Following the introduction of the Alternative Investment Fund Managers Directive (“AI

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Notified AIFs

Today the MFSA has announced the launch of a new product, the Notified AIFs, promoted to either qualifying or professional investors. Notified AIFs, as long as they are managed by an AIFM, are not authorised or licensed by the MFSA and will not be

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Changes to the Companies Act

Following the transposition of Directive 2013/34/EU regarding annual financial statements of companies, as from the 1st January 2016 there will be two major changes to the Companies Act: 1. The exemption from the preparation of consolidated accoun

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Malta’s new binary options framework

Dr. Omar Zerafa has recently published an article on LeapRate regarding the new policies adopted by the MFSA in relation to providers of binary options trading platforms. Read more on http://leaprate.com/uzmg5.



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Updated Policy for Online Forex Brokers

The MFSA has just updated its policy on online forex trading service providers, licensed as Category 2 or Category 3 Investment Service Licence holders. In its revised policy, the MFSA has lowered its threshold in relation to the requirement of a

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Certificate of Compliance for CSPs

The MFSA has today issued a circular addressed to Company Service Providers regarding the duty of Company Service Providers to submit to the Authority a Certificate of Compliance. Such certificate shall cover one calendar year (from the 1st Januar

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Is Malta the next Cyprus?

Dr. Omar Zerafa provides an insight into establishing and licensing an online financial trading company in Malta, and how the jurisdiction compares to Cyprus as a hub for online financial trading.



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Zerafa Advocates in Tel Aviv, Israel

Earlier this week, Dr. Omar Zerafa has been invited to Tel Aviv to be part of a regulatory panel where he spoke about the developments in the Maltese regulatory regime with respect to online financial trading, particularly forex and binary options

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Swiss Franc

The announcement of the Swiss National Bank that it will no longer be enforcing and maintaining the minimum exchange rate for the Swiss Franc against the Euro has resulted in significant volatility in forex markets in relation to the Swiss Franc a

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Individual Investor Program

Zerafa Advocates has been approved as an Introducer for Henley & Partners, the entity which has been awarded a Public Services Concession by competitive tender with regards to the design, implementation and international promotion of the Indiv

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Online Forex Trading

The MFSA has just issued a notice informing applicants for a Category 2 or Category 3 licence to carry out online forex trading of a new set of conditions specifically targeted to such companies. The new set of conditions put restrictions on the s

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Solvency II

On the 10th October 2014, the Commission has adopted an act containing the implementing rules for Solvency II, which will enter into force once they are approved by both the European Parliament and the Council. Solvency II takes into account the c

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AIFMD National Private Placement Regime

The MFSA has recently published a set of documents formalising the implementation of the National Private Placement Regime (“NPPR”) in Malta. The NPPR allows Alternative Investment Fund Managers to market Alternative Investment Funds i

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Updated Corporate Governance Manual

The Corporate Governance Manual for Directors of Investment Companies and Collective Investment Schemes published by the MFSA has been updated to include the requirements of the Alternative Investment Fund Managers Directive (“AIFMD”)

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Publication of the UCITS V Directive

The UCITS V Directive was published in the European Union’s Official Journal on the 28th August 2014. The Directive, amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings fo

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