Status update on the practical implications of the VFA Framework

On the 25th January 2019, the Malta Financial Services Authority (“MFSA”) issued a Circular (the “Circular”) to provide a status update on the practical implementation of the Virtual Financial Assets (“VFA”) framework.

Application for authorisation

The Circular provides for certain clarifications in relation to the application for authorisation under the VFA Act. Indeed, it reiterates that to date, the MFSA is only accepting applications from VFA Agents and issuers availing themselves of the transitory period under Article 62(1)(a) of the VFA Act or of the exemption falling under Regulation 3 of the VFA Regulations and who will continue their offering after the 31st January 2019. The MFSA also clarifies that the applications for VFA Agents are being reviewed on a first come first served basis and the timing of the granting or refusal of licence depends on the quality and completeness of the application and the availability of the designated persons.

Frequently Asked Questions

The MFSA has issued an updated Frequently Asked Questions on the Virtual Financial Assets Framework document in order to address further queries raised by  stakeholders. These issues relate to various issues including information regarding whitepaper registration, licensing and the authorisation process.

Proposed MLRO

In relation to individuals proposed as MLROs, a list of approved courses will soon be issued and in addition to completing an approved course, such persons will also be subject to a mandatory interview. Following approval, MLROs are required to obtain a number of CPE hours on an annual basis.

Exemptions requiring a determination by the MFSA

Parties wishing to benefit from the exemptions listed in Regulation 4(2) of the VFA Regulations shall provide a detailed description of the relevant business model highlighting how the services are being offered and providing a detailed legal assessment of why the entity should be exempt. This applies to any person solely dealing on own account and  against proprietary capital, custodians of Collective Investment Schemes, Alternative Investment Fund Managers and custodians or persons providing nominee services who are authorised in terms of article 43(3) of the Trusts and Trustees Act. The MFSA will then review the documentation and issue a formal communication on whether the entity should be considered as exempt or otherwise.

Please feel free to contact us for more information.