Consultation on Changes to Chapter 3 of the Virtual Financial Assets Rulebook

On 23rd August 2023, the Malta Financial Services Authority (the “MFSA” or the “Authority”) informed the relevant stakeholders of the steps that it is taking to align the Virtual Financial Assets (“VFA”) Framework to the Markets in Crypto-Assets Regulation (“MiCA”). MiCA was adopted earlier in 2023 and will be enforceable as of the 30th of December 2024. The Authority wishes to secure a smooth transition for VFA Service Providers which shall be ensured by the proposed amendments to the VFA Rulebook.

The Authority has proposed several changes, which shall be open to consultation. These include changes to the systems audit requirement and changes to the initial capital requirement for Class 3 and Class 4. The document also proposes for the amendment of the insurance requirement which has been proposed to be replaced with a new requirement within the prudential requirements section.

The MFSA has also proposed to amend the supplementary conditions and the conduct of business requirements which are currently in place to ensure alignment with MiCA.

While the updates to the rulebook are intended to become applicable, in their entirety on the date of publication, certain requirements introduced, such as those pertaining to the orderly wind-down plan, service-specific requirements and whitepaper disclosure requirements, would have an additional three-month transitionary period.

Stakeholders are invited to consult the draft version of the Rulebook and provide their feedback to the MFSA until the 15th of September 2023.

For more information on MiCA and its regulatory implications, feel free to contact us.