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 other post registration requirements which a VFA agent is expected to fulfill.
Voluntary suspension of a VFA registration
VFA agents may request the MFSA to voluntary suspend their registration for a period of six months. This will only apply if the VFA agent does not have any clients and will not onboard new clients during the suspension period. The request should include a detailed justification as to why such a suspension is being requested and the efforts of the VFA agent to continue its business.
The MFSA will require declarations confirming the intention to voluntary suspend the registration as well as a resolution of the governing body of the VFA agent. A declaration is also required confirming that the VFA agent does not have any clients and it will not be onboarding any new clients during the suspension period. A public notice will appear on the MFSA’s website. An extension for the voluntary suspension of the registration may be requested by the VFA agent.
Cessation of the business of a VFA agent
VFA agents ceasing their business and intending to surrender their registration should inform the MFSA by means of a formal request as soon as they are aware.
The following supporting documentation is required to be submitted to the MFSA
- a declaration confirming its intention to surrender the registration
- a certified true copy of a resolution signed by the board of directors of the VFA agent confirming the intention to cease its business
- a confirmation that there are no pending litigations
- a declaration that there are no pending complaints against the VFA agent
- a confirmation that the VFA agents will remove all references from his stationery that he is registered with the MFSA as a VFA agent
- a confirmation that the VFA agent has informed its auditor and insurer of its intention to surrender its registration
- a confirmation that notice has been given to the clients
- a confirmation from the auditors specifying the date when all business and obligations related to its activity have been settled
The MFSA may request the VFA agent to delay the surrender of its registration if it determines that this is required to ensure investor protection and market integrity.
The approval and departure processes for designated and appointed persons
The approval process – designated and appointed persons shall inform and apply for approval from the MFSA prior to being engaged by submitting the online personal questionnaire form. If the person is fit and proper, the MFSA will issue an in principle approval and may also require the person to fulfill certain conditions within set time frames. These conditions will be included in the letter of approval. The MFSA may also require the person to confirm in writing his understanding of the requirements and his acceptance of the responsibilities attached to such a role.
The departure process – Approved persons must notify the MFSA of their departure by not later than the effective date of departure. The person shall also provide the MFSA with the reason for the departure and a written confirmation that such departure was not a consequence of any regulatory implications.