The VFA Rules for VFA Agents (1)

The MFSA has on the 12th July 2018 issued a consultation paper on the Virtual Financial Assets rules for VFA agents.  The closing date for submission was 31st July 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 […]

Written By ACT Team

On August 25, 2018
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The MFSA has on the 12th July 2018 issued a consultation paper on the Virtual Financial Assets rules for VFA agents.  The closing date for submission was 31st July 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 VFA agents appointed in terms of the VFA Act and to applicants seeking registration in terms of the said Act. 

The first title of this chapter outlines the high-level principles which should guide VFA agents in the provision of their VFA activity in or from within Malta, while title 2 outlines the registration requirements and the registration process for VFA agents.  Title 3 outlines the ongoing obligations which VFA agents must adhere to, while title 4 provides for enforcement and sanctions in the event of misconduct by VFA agents. 

This article will deal with the high-level principles which VFA agents are expected to adhere to as well as with the registration requirements for VFA agents.

Title 1 – High level principles 

VFA agents shall:

  1. Act in an ethical manner taking into account Malta’s best interest, investor protection and market integrity;
  2. Act honestly, fairly and professionally;
  3. Comply with the relevant laws, rules and regulations;
  4. Cooperate with the MFSA in an open and honest manner;
  5. Adhere to Maltese and EU rules and regulations as well as other guidance notes issued by the MFSA from time to time.

Title 2 – Registration requirements for VFA agents 

A person providing or holding itself out as providing the services listed in Articles 7 and / or 14 of the VFA Act, whether in Malta or outside Malta, must be registered with the MFSA.  An applicant must propose two persons to act as a VFA agent as well as a MLRO.  

The person must be a legal person established in Malta or in a recognized jurisdiction, provided it has a registered office in Malta and at least 2 resident representatives in Malta. The representatives must be accountants, auditors or advocates. 

The VFA agent must have an initial and ongoing capital of Eur50,000.  It must also have a professional indemnity insurance.

In considering whether or not to grant a license, the MFSA will take into account the protection of investors and the general public and the reputation and suitability of the applicant and all other parties connected with the applicant. 

Applicants shall be fit and proper persons on a continuous basis and must satisfy the following three criteria

The MFSA has on the 12th July 2018 issued a consultation paper on the Virtual Financial Assets rules for VFA agents.  The closing date for submission was 31st July 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 VFA agents appointed in terms of the VFA Act and to applicants seeking registration in terms of the said Act. 

The first title of this chapter outlines the high-level principles which should guide VFA agents in the provision of their VFA activity in or from within Malta, while title 2 outlines the registration requirements and the registration process for VFA agents.  Title 3 outlines the ongoing obligations which VFA agents must adhere to, while title 4 provides for enforcement and sanctions in the event of misconduct by VFA agents. 

This article will deal with the high-level principles which VFA agents are expected to adhere to as well as with the registration requirements for VFA agents.

Title 1 – High level principles 

VFA agents shall:

  1. Act in an ethical manner taking into account Malta’s best interest, investor protection and market integrity;
  2. Act honestly, fairly and professionally;
  3. Comply with the relevant laws, rules and regulations;
  4. Cooperate with the MFSA in an open and honest manner;
  5. Adhere to Maltese and EU rules and regulations as well as other guidance notes issued by the MFSA from time to time.

Title 2 – Registration requirements for VFA agents 

A person providing or holding itself out as providing the services listed in Articles 7 and / or 14 of the VFA Act, whether in Malta or outside Malta, must be registered with the MFSA.  An applicant must propose two persons to act as a VFA agent as well as a MLRO.  

The person must be a legal person established in Malta or in a recognized jurisdiction, provided it has a registered office in Malta and at least 2 resident representatives in Malta. The representatives must be accountants, auditors or advocates. 

The VFA agent must have an initial and ongoing capital of Eur50,000.  It must also have a professional indemnity insurance.

In considering whether or not to grant a license, the MFSA will take into account the protection of investors and the general public and the reputation and suitability of the applicant and all other parties connected with the applicant. 

Applicants shall be fit and proper persons on a continuous basis and must satisfy the following three criteria

  1. Integrity – applicants must demonstrate and provide reasonable assurance to the MFSA that they are of good repute as well as of their intentions to act in an honest and trust worthy manner.
  2. Competence – applicants must demonstrate that they have an acceptable level of knowledge, professional expertise and experience and have adequate systems in place to act as a VFA agent.
  3. Solvency – the applicant must be financially sound.
  1. Integrity – applicants must demonstrate and provide reasonable assurance to the MFSA that they are of good repute as well as of their intentions to act in an honest and trust worthy manner.
  2. Competence – applicants must demonstrate that they have an acceptable level of knowledge, professional expertise and experience and have adequate systems in place to act as a VFA agent.
  3. Solvency – the applicant must be financially sound.

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

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]. 

Disclaimer: 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.