Clarifications on the Professional Indemnity Insurance and the Risk Management Function of CSPs

On the 3rd August 2021, the Malta Financial Services Authority (“MFSA“) issued a circular as a clarification intended for licensed Company Service Providers (“CSPs“) on their previous circular. In the circular, the MFSA provides clarifications on the following:

Professional Indemnity Insurance Requirements

CSPs are reminded to submit a declaration stating that they have obtained Professional Indemnity Insurance cover, as applicable to the relevant class within which the CSP falls under.

The declaration should include a confirmation that the level of insurance cover in place is in line with the requirements and thresholds set out in the updated CSP Rulebook.

CSPs are reminded that the MFSA may request a copy of the said insurance policy to verify compliance with the applicable requirements.

Risk Management Function for Class C CSPs

The MFSA notes that upon the identification of the person who will take up the risk management function, a personal questionnaire for approval of the relevant individual must be submitted to the MFSA.

Nevertheless, where a CSP has submitted a request and received approval for a derogation from appointing an independent risk officer, a personal questionnaire is not required to be submitted even though the CSP is still expected to identify an individual to act as the risk officer. CSPs are to ensure that conflicts of interest are avoided as much as possible especially when the individual identified forms part of the staff of the Company.

Feel free to contact us should you require further assistance on the above.