CSP Authorisation – Application Process for Natural Persons

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 Services Authority (the “MFSA”) to provide Company Service Provider (“CSP”) services. The warranted professionals, such as lawyers, auditors, accountants, tax practitioners, as well as persons operating under the de minimis rule, should apply for a CSP authorisation with the MFSA by the 16th May 2021, in order to continue offering CSP services to their clients. The MFSA has issued a Guidance Note to assist the interested natural persons and entities in the application process. For the natural persons, the application process includes the following main steps:

Step 1 – Submission of the Personal Questionnaire (“the PQ”)

The CSP authorisation process commences with the online submission of the PQ through the LH Portal. The PQ code generated shall be inserted in the Application Form.

Step 2 – Payment of the Application Fee

The application fee of EUR 250 shall be settled upon the submission of the Application Form. The payment of the application fee is to be made online with the Payment Reference including: CSP Reg – Name of Applicant. Please note that unless the application fee is duly received, the MFSA will not process the Application Form.

Step 3 – Submission of the Application

The application for authorisation shall be submitted online through the LH Portal, whereby one can also download the Application Form, identical to the one attached and published by the MFSA on its website.

The below indicate a non-exhaustive list of relevant information that you would need to have available in order to complete the Application Form:

  1. The revenue generated for the last accounting reference date for Regulated CSP activities and other professional services;
  2. Targeted jurisdictions;
  3. Information on the client onboarding policies;
  4. Number of clients and % of PEPs from the total client base;
  5. Number of clients met on a face to face basis;
  6. Number of clients not met on a face to face basis;
  7. Total number of engagements held in relation to regulated CSP activities, indicating each type of engagement;
  8. Estimated number of engagements for the next two years in relation to regulated CSP activities, indicating each type of engagement estimated;
  9. Type of ancillary services offered in conjunction with the core CSP services;
  10. Information on complaints received in the last 2 years;
  11. Information on any litigation process involved, pending or threatening for the last 5 years;
  12. Information on the principal officers, if any, such as the Compliance Officer and the Risk Officer;
  13. Information in relation to any positions held by you or your officers for which an authorisation is issued by the MFSA or any other regulatory authority, indicating the position held, the company within which the position is held, and the duration of the authorised position.

Once completed, the Application Form shall be attached in excel format on the LH portal. In addition to the Application Form, the following documents should also be provided to the MFSA:

  1. Business Plan;
  2. Business Risk Assessment;
  3. Customer Risk Assessment;
  4. Draft copy of the Client Services Agreement that the CSP intends to use.

Any additional documentation supporting the application is to be submitted by not later than the 15th July 2021. Furthermore, the final section of the application, which includes the declaration and the signatures in original, the PQ, and the Application Form, shall be submitted to the MFSA within two (2) weeks from the electronic submission.

Processing of the Application

The MFSA will conduct preliminary checks as well as risk rate application forms, and an initial determination will be made as to whether the application will be processed with the purpose of issuing a full authorisation or a provisional authorisation within the first six (6) month period, i.e. until the 16th November 2021. Concurrently, the Authority will also determine the Class which will be allocated to the applicant.

For further information or for assistance with the submission of an authorisation application please feel free to contact us at [email protected].

The information contained in this write up is provided for general informational purposes only. It does not, and is not intended to, constitute legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this write up without seeking legal or other professional advice for your particular situation.