MFSA releases Consultation Paper on the Financial Instrument Test

In its discussion paper on Initial Coin Offerings (ICOs), Virtual Currencies and Related Service Providers, the MFSA had proposed a “Financial Instrument Test” in order to determine whether a Distributed Ledger Technology (DLT) asset, based on its specific features, falls within the ambit of either the local financial services legislation, the proposed Virtual Financial Assets Act (VFA) or falls outside the […]

Written By ACT Team

On April 30, 2018
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In its discussion paper on Initial Coin Offerings (ICOs), Virtual Currencies and Related Service Providers, the MFSA had proposed a “Financial Instrument Test” in order to determine whether a Distributed Ledger Technology (DLT) asset, based on its specific features, falls within the ambit of either the local financial services legislation, the proposed Virtual Financial Assets Act (VFA) or falls outside the existent or proposed regulatory framework. 

The MFSA is now considering introducing the Test as a mandatory requirement under the VFA Act, applicable to both ICOs and during the intermediation of DLT assets, which may qualify as virtual financial assets. It is also being proposed that non-licensed persons providing a service or performing an activity in relation to a DLT asset in or from within Malta will be required to conduct the Test in order to determine the applicable regulatory framework. 

In view of this, the MFSA has released a Consultation Paper on the Financial instrument Test. 

The consultation period shall remain open until 4 May 2018. 

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].