THE VFA RULES FOR VFA ISSUERS (5)
The MFSA has on the 30th July 2018 issued a consultation paper on the Virtual Financial Assets rules for issuers of Virtual Financial assets. The closing date for submission was 13th August 2018 and now the MFSA is expected to issue the official chapter after taking into account the submissions which it has received as well as other consultations with relevant stake holders which it has carried out.
This paper is intended to form part of a rule book which will be entitled the ‘Virtual Financial Assets Rulebook’ and which will be divided into three chapters. This chapter applies to issuers of Virtual Financial Assets.
The first title of this chapter outlines the high-level principles which should guide issuers when issuing Virtual Financial Assets while title 2 sets out the general requirements for issuers which includes that the issuers must be legal persons and that the business is directed by two persons. Title 3 outlines the initial and ongoing requirements applicable to initial VFA offerings, which mainly related to the requirements to register their white paper as well as the conditions to admit VFA assets on a DLT exchange. Title 4 provides details with regards to the administrative penalties and sanctions as well as the principles which will be guiding the MFSA when imposing administrative penalties.
This chapter also includes the MFSA’s interpretation on the transitory provisions provided for under Article 62(1)(a) of the Virtual Financial Assets Act.
This article will deal with Title 3 of Chapter 2 of the rule book which outlines the initial and ongoing requirements applicable to initial VFA offerings, which are mainly related to the requirements to register the white paper as well as the conditions to admit VFA assets on a DLT exchange.
Title 3 – Initial VFA Offerings and Trading on DLT exchanges
Issuers who wish to offer their Virtual Financial assets to the public in or from within Malta or wish to apply for their admission to trading on a DLT exchange must draw a white paper which complies with the requirements of the VFA Act and register it with the MFSA. Such an issuer must through its VFA agent submit the following documents to the MFSA.
The white paper signed by its board of administration
A copy of the financial instrument test signed by its board of administration and endorsed by its VFA agent
A confirmation from its systems auditor that the technology arrangements comply with qualitative standards and guidelines issued by the Malta Digital and Innovation Authority
Audited financial statements of the last 3 years
Consolidated audited financial statements for the last 3 years where the issuer forms part of a group
Its constitutional document
The white paper must provide information about the issuer as well as the proposed activities. The whitepaper must:
Contain all the information as per First Schedule of the VFA Act
Signed by the board of administration
Include a statement signed by the board of administration that the white paper complies with the requirements under the VFA Act, the rules and the regulations
How can we help?
Please contact us for a free initial consultation on how we may be able to assist you. We can assist you in setting up your company in Malta, setting up a bank account for the Malta company, drafting and / or reviewing the white paper which would have already been prepared. We can also assist by providing you with the initial legal advice on the type of token which you intend issuing i.e. whether the token is a financial instrument, a virtual token, electronic money or a Virtual Financial Asset. We can also assist you in the preparation and submission of the application and the supporting documentation to register your white paper in terms of the VFA Act and / or to obtain a licence to operate a crypto currency exchange in or from Malta.
We are also publishing on a regular basis updates about blockchain, DLT, VFA exchanges and ICOs and encourage you to get in touch with us if you would like us to keep you duly updated about regulatory development in this area. If you would like to receive such updates, or if you have any queries, please do not hesitate to contact us on [email protected].
Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria. For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].
This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.
17th September 2018
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