Two Acts amend laws administered by MFSA
An Act to amend various financial services laws was published on August 3. Among the more important changes the Act will bring about the full adoption of the European Directive on Capital Adequacy of Investment Firms and Credit Institutions and the Markets in Financial Instruments Directive (MiFID).
These laws will further consolidate Malta's position as a financial services jurisdiction inside the European single market. The various changes will affect the Malta Financial Services Authority Act, the Financial Markets Act, the Investment Services Act, the Banking Act, the Insurance Business Act and the Insurance Intermediaries Act.
The main amendments to the Financial Markets Act (FMA) relate to the transposition of MiFID. Under MiFID, the stock exchanges will be authorised as a regulated market, no different from other regulated markets that may be authorised under the Act. The new Part IV includes the conditions for authorisation, functions and responsibilities of Central Securities Depositories.
Following the coming into force of the FMA in 2002 and the repeal of the Malta Stock Exchange Act, the exchange's regulatory responsibilities were taken on by the MFSA as the competent authority. The exchange became an operator of the capital market, authorised in terms of the Act. The new provisions give the central securities depository a more robust legal and regulatory framework. The new provisions also provide for an expansion of services from merely notarial (registrar) functions to include other services such as custody and back-office services, to allow for further expansion of business and income by such organisations.
The amendments to the Investment Services Act (ISA) mainly affect the schedules to the said Act. Schedule 1 of ISA has been revised to provide a clearer definition of certain licensable activities. Two new services have also been added to the list of activities, namely the operation of a multilateral trading facility (MTF) and the placing of financial instruments without a firm commitment basis. A further amendment is that stockbroking no longer features as a separate licensable service in Schedule 1 as this service falls under the service of "execution of orders on behalf of clients", which will replace the current services of "dealing as agent".
Schedule 2 of the Investment Services Act, which lists the instruments to which licensable activity relates, has also been amended to ensure conformity with the terminology of the MiFID. Certain new instruments, such as commodity derivatives, have in fact, been introduced. Certain licence holders will as a consequence have their licences amended to conform with the new terminology.
Whereas the majority of the changes introduced by the Act to amend various financial services laws entered into force upon its publication on August 3, the amendments to the Financial Markets Act and those to the Investment Services Act will come into force on November 1.
The MFSA has issued MiFID Guidance Notes to assist investment services licence holders to come in line with the requirements of MiFID. These guidance notes are available from the MFSA website.
A separate Act to amend the Companies Act was also published on July 24 and entered into force on August 10 by means of Legal Notice 213 of 2007.
Education Consultative Council coordinating training initiatives for 2007-2008
Member training institutions within the MFSA's Education Consultative Council are currently in the process of co-ordinating with the MFSA the drawing up of a comprehensive schedule of new training initiatives targeted for the latter part of the current year up to mid-2008.
This development follows the finalisation of the Diploma programme in Financial Services Operations and Compliance, details of which were announced by the MFSA last week. A number of these new training initiatives complement standard training packages and programmes that some of individual member institutions already offer for prospective or current employees who wish to specialise in particular areas within the financial services sector.
Others will be aimed at sustaining continuous professional development and at familiarising participants with periodic updates in regulatory standards.
Topics expected to feature in these new training programmes include corporate governance and company director development, awareness on the technical aspects of derivatives, principles of risk management, risk management issues in insurance and banking, advanced techniques in fund administration, principles of insurance underwriting, local and international aspects of company law, trust administration and the Single Euro Payments Area (SEPA). On the regulatory side the implications resulting from the introduction of the Banking Capital Requirements Directive and the Reinsurance Directive will feature prominently following a programme focussing on the MiFID that took place earlier this year.
The presence of the Institute of Business and Commerce of MCAST and that of the Department of Education's Guidance Unit on the Council will ensure an efficient and ongoing communication and sharing of information process. In the MFSA's opinion, this is crucial to cater for skills gaps that, from time to time, emerge within the industry. A framework also needs to be in place for more students at secondary and post-secondary level to be aware of the different career possibilities within the financial services sector and of the various training opportunities. In this regard it is expected that the consultation process started with guidance teachers earlier this year will continue in earnest during 2008.
Besides representatives from the MFSA, MCAST and the Guidance Unit of the Department of Education, the Education Consultative Council comprises representatives from the IFS (Institute of Financial Services) Malta, the Malta International Training Centre, the Institute of Directors (Malta), the Society of Trusts and Estate Practitioners (Malta), the Institute of Legal Studies and the Institute of Financial Services Practitioners. The council is chaired by Prof. Charles Farrugia who is also a member of the MFSA's board of governors.
Netherlands market opens up for Maltese funds
A decree published by the Dutch Finance Minister on July 24, has designated Malta as a state with adequate supervision for the purposes of The Netherlands Investment Institutions Supervision Act (IISA).
The decree was published following an evaluation of Malta's regulatory regime for investment funds by the Netherlands Authority for the Financial Markets (AFM). It effectively allows non-UCITS funds domiciled in Malta to be marketed in the Netherlands without the need for the fund manager to be licensed under the IISA. (UCITS funds already enjoy this freedom under the European UCITS Directive.)
As a result of this new development Maltese Professional Investor Funds and other non-UCITS funds may now also be marketed in the Netherlands by fund managers licensed and regulated by the MFSA.
Proposed rules relating to tied agents
The MFSA has issued a circular addressed to the financial services industry regarding Malta's transposition/ implementation of MiFID. This consultation document refers to the proposed investment services rules relating to tied agents which have been drafted to transpose certain requirements of Article 23 of the MiFID.
The main highlights of the relevant rules include (i) the registration of tied agents; (ii) eligibility criteria and (iii) responsibility of licence holders. The MFSA will create and keep a register of tied agents. Application for registration must be made on behalf of proposed tied agent, by the licence holder wishing to appoint such person as its tied agent. Licence holders may appoint both individuals and other legal persons (including limited liability companies) as their tied agents.
The responsibility for the control and monitoring of tied agents rests ultimately with the licence holder appointing such tied agents. The licence holder will also be responsible for any breach of the investment services rules committed by its tied agents.
Tied agents will not be allowed to hold and control clients' money or assets. Tied agents can only act for one licence holder at any one time.
Interested parties are to send their comments in writing addressed to the Director - Securities Unit, MFSA, by not later than September 24.
Warnings to investors
Over the past month the MFSA has received and circulated a number of warnings to investors issued by overseas regulators. Full releases can be accessed from the Warnings for Investors section in the MFSA website: (www.mfsa.com.mt).
New licences issued this month
(i) Collective Investment Scheme
• Licence issued to Wood & Company Funds SICAV plc. This fund is a Professional Investor Fund targeting Qualifying Investors.
• Licence issued to Celsius Global Funds SICAV plc in respect of the Voltaire 20:80 Fund.
• Licence issued to NBCG Fund SICAV plc in respect of six sub funds. This fund is a Professional Investor Fund targeting Qualifying Investors.
(ii) Insurance - Extension of licences
• To Atlas Healthcare Insurance Agency Limited to act as an insurance agent of AXA PP Healthcare Limited to carry on general business of insurance in six further classes.
(iii) Trusts and Trustees
• Exalco Financial Services Limited has been authorised to act as Trustee in terms of the Trusts and Trustees Act.
• Auberges Trustees Limited has been authorised to act as a trustee or co-trustee in terms of the Trusts and Trustees Act.
(iv) Surrender of Licences
• Surrender of collective investment scheme licence issued to Global Funds SICAV plc in relation to three of its sub-funds.
• Surrender of collective investment scheme licence issued to Prime Emerging Fund SICAV plc
MFSA web site: http://www.mfsa.com.mt Registry web site: http://registry.mfsa.com.mt Consumer web site: http://www.mfsa.com.mt/consumer
An Act to amend various financial services laws was published on August 3. Among the more important changes the Act will bring about the full adoption of the European Directive on Capital Adequacy of Investment Firms and Credit Institutions and the Markets in Financial Instruments Directive (MiFID).
These laws will further consolidate Malta's position as a financial services jurisdiction inside the European single market. The various changes will affect the Malta Financial Services Authority Act, the Financial Markets Act, the Investment Services Act, the Banking Act, the Insurance Business Act and the Insurance Intermediaries Act.
The main amendments to the Financial Markets Act (FMA) relate to the transposition of MiFID. Under MiFID, the stock exchanges will be authorised as a regulated market, no different from other regulated markets that may be authorised under the Act. The new Part IV includes the conditions for authorisation, functions and responsibilities of Central Securities Depositories.
Following the coming into force of the FMA in 2002 and the repeal of the Malta Stock Exchange Act, the exchange's regulatory responsibilities were taken on by the MFSA as the competent authority. The exchange became an operator of the capital market, authorised in terms of the Act. The new provisions give the central securities depository a more robust legal and regulatory framework. The new provisions also provide for an expansion of services from merely notarial (registrar) functions to include other services such as custody and back-office services, to allow for further expansion of business and income by such organisations.
The amendments to the Investment Services Act (ISA) mainly affect the schedules to the said Act. Schedule 1 of ISA has been revised to provide a clearer definition of certain licensable activities. Two new services have also been added to the list of activities, namely the operation of a multilateral trading facility (MTF) and the placing of financial instruments without a firm commitment basis. A further amendment is that stockbroking no longer features as a separate licensable service in Schedule 1 as this service falls under the service of "execution of orders on behalf of clients", which will replace the current services of "dealing as agent".
Schedule 2 of the Investment Services Act, which lists the instruments to which licensable activity relates, has also been amended to ensure conformity with the terminology of the MiFID. Certain new instruments, such as commodity derivatives, have in fact, been introduced. Certain licence holders will as a consequence have their licences amended to conform with the new terminology.
Whereas the majority of the changes introduced by the Act to amend various financial services laws entered into force upon its publication on August 3, the amendments to the Financial Markets Act and those to the Investment Services Act will come into force on November 1.
The MFSA has issued MiFID Guidance Notes to assist investment services licence holders to come in line with the requirements of MiFID. These guidance notes are available from the MFSA website.
A separate Act to amend the Companies Act was also published on July 24 and entered into force on August 10 by means of Legal Notice 213 of 2007.
Education Consultative Council coordinating training initiatives for 2007-2008
Member training institutions within the MFSA's Education Consultative Council are currently in the process of co-ordinating with the MFSA the drawing up of a comprehensive schedule of new training initiatives targeted for the latter part of the current year up to mid-2008.This development follows the finalisation of the Diploma programme in Financial Services Operations and Compliance, details of which were announced by the MFSA last week. A number of these new training initiatives complement standard training packages and programmes that some of individual member institutions already offer for prospective or current employees who wish to specialise in particular areas within the financial services sector.
Others will be aimed at sustaining continuous professional development and at familiarising participants with periodic updates in regulatory standards.
Topics expected to feature in these new training programmes include corporate governance and company director development, awareness on the technical aspects of derivatives, principles of risk management, risk management issues in insurance and banking, advanced techniques in fund administration, principles of insurance underwriting, local and international aspects of company law, trust administration and the Single Euro Payments Area (SEPA). On the regulatory side the implications resulting from the introduction of the Banking Capital Requirements Directive and the Reinsurance Directive will feature prominently following a programme focussing on the MiFID that took place earlier this year.
The presence of the Institute of Business and Commerce of MCAST and that of the Department of Education's Guidance Unit on the Council will ensure an efficient and ongoing communication and sharing of information process. In the MFSA's opinion, this is crucial to cater for skills gaps that, from time to time, emerge within the industry. A framework also needs to be in place for more students at secondary and post-secondary level to be aware of the different career possibilities within the financial services sector and of the various training opportunities. In this regard it is expected that the consultation process started with guidance teachers earlier this year will continue in earnest during 2008.
Besides representatives from the MFSA, MCAST and the Guidance Unit of the Department of Education, the Education Consultative Council comprises representatives from the IFS (Institute of Financial Services) Malta, the Malta International Training Centre, the Institute of Directors (Malta), the Society of Trusts and Estate Practitioners (Malta), the Institute of Legal Studies and the Institute of Financial Services Practitioners. The council is chaired by Prof. Charles Farrugia who is also a member of the MFSA's board of governors.
Netherlands market opens up for Maltese funds
A decree published by the Dutch Finance Minister on July 24, has designated Malta as a state with adequate supervision for the purposes of The Netherlands Investment Institutions Supervision Act (IISA).The decree was published following an evaluation of Malta's regulatory regime for investment funds by the Netherlands Authority for the Financial Markets (AFM). It effectively allows non-UCITS funds domiciled in Malta to be marketed in the Netherlands without the need for the fund manager to be licensed under the IISA. (UCITS funds already enjoy this freedom under the European UCITS Directive.)
As a result of this new development Maltese Professional Investor Funds and other non-UCITS funds may now also be marketed in the Netherlands by fund managers licensed and regulated by the MFSA.
Proposed rules relating to tied agents
The MFSA has issued a circular addressed to the financial services industry regarding Malta's transposition/ implementation of MiFID. This consultation document refers to the proposed investment services rules relating to tied agents which have been drafted to transpose certain requirements of Article 23 of the MiFID.
The main highlights of the relevant rules include (i) the registration of tied agents; (ii) eligibility criteria and (iii) responsibility of licence holders. The MFSA will create and keep a register of tied agents. Application for registration must be made on behalf of proposed tied agent, by the licence holder wishing to appoint such person as its tied agent. Licence holders may appoint both individuals and other legal persons (including limited liability companies) as their tied agents.
The responsibility for the control and monitoring of tied agents rests ultimately with the licence holder appointing such tied agents. The licence holder will also be responsible for any breach of the investment services rules committed by its tied agents.
Tied agents will not be allowed to hold and control clients' money or assets. Tied agents can only act for one licence holder at any one time.
Interested parties are to send their comments in writing addressed to the Director - Securities Unit, MFSA, by not later than September 24.
Warnings to investors
Over the past month the MFSA has received and circulated a number of warnings to investors issued by overseas regulators. Full releases can be accessed from the Warnings for Investors section in the MFSA website: (www.mfsa.com.mt).
New licences issued this month
(i) Collective Investment Scheme
• Licence issued to Wood & Company Funds SICAV plc. This fund is a Professional Investor Fund targeting Qualifying Investors.
• Licence issued to Celsius Global Funds SICAV plc in respect of the Voltaire 20:80 Fund.
• Licence issued to NBCG Fund SICAV plc in respect of six sub funds. This fund is a Professional Investor Fund targeting Qualifying Investors.
(ii) Insurance - Extension of licences
• To Atlas Healthcare Insurance Agency Limited to act as an insurance agent of AXA PP Healthcare Limited to carry on general business of insurance in six further classes.
(iii) Trusts and Trustees
• Exalco Financial Services Limited has been authorised to act as Trustee in terms of the Trusts and Trustees Act.
• Auberges Trustees Limited has been authorised to act as a trustee or co-trustee in terms of the Trusts and Trustees Act.
(iv) Surrender of Licences
• Surrender of collective investment scheme licence issued to Global Funds SICAV plc in relation to three of its sub-funds.
• Surrender of collective investment scheme licence issued to Prime Emerging Fund SICAV plc
MFSA web site: http://www.mfsa.com.mt Registry web site: http://registry.mfsa.com.mt Consumer web site: http://www.mfsa.com.mt/consumer