MFSA newsletter
Local news - Education Council approves training programmes The MFSA through its Education Consultative Council has approved the training programme calendar for 2008. The short programmes are scheduled to commence in March 2008. This year's training...
Local news - Education Council approves training programmes
The MFSA through its Education Consultative Council has approved the training programme calendar for 2008. The short programmes are scheduled to commence in March 2008.
This year's training calendar includes an introductory course on alternative investments and a course on hedge funds by the Institute of Financial Services in collaboration with the Alternative Investment Management Association (AIMA). AIMA is a global not-for-profit association representing the global alternative investment community and provides a centre of knowledge for professional investment practitioners. The introductory course on alternative investments will be held over two half-day sessions in April and will look at an overview of hedge funds, private equity funds, property funds, venture capital and commodities. The course will also provide an insight into how a hedge fund works and also the evaluation of hedge funds including risk management.
The course on hedge funds, on the other hand, will provide a detailed and comprehensive picture of the hedge fund industry, over one and a half days. The course will cover the operations of hedge funds including investment styles and risk management and will also give some information about issues for hedge fund investors.
Other training programmes cover a wide range of topics within the financial services sector including insurance underwriting, company law, asset management, prevention of money laundering and corporate governance for banking. These training programmes are being held in conjunction with various training institutes and international associations and organisations.
Insurance consultation
The MFSA recently circulated insurance business proposals for legal notices/ministerial regulations and for new laws and amendments to existing laws. Pursuant to article 32 of the Insurance Business Act (Cap. 403), companies authorised to carry out insurance under the Act are required to submit business of insurance statements as set out in Insurance Rule 12 of 2007. The MFSA is proposing to add two new parts, Part E and Part I, in the schedule to the rule. Part E will contain the certificate by directors, the certificate by appointed actuary, and the auditors' report. Part I is a new part which will be dedicated to miscellaneous business statements. The MFSA is currently issuing reinsurance business statements within Part I. Comments on the proposals are to be sent to the MFSA in writing by not later than March 28.
International news - Better retail investor information for UCITS
The Committee of European Securities Regulators (CESR) recently published its advice to the European Commission on "the content and form of Key Information Document disclosures for UCITS", known as KID. The new disclosure document is intended to simplify and highlight the crucial elements that a retail investor should consider when buying a UCITS. The purpose of the KID is ultimately to replace the Simplified Prospectus for Retail Investors, following further market testing to be undertaken by the European Commission. This work was launched at the request of the European Commission in April 2007, as part of its wider work to revise the UCITS Directive. CESR's proposal was subject to significant consultation with market participants and EU retail consumer associations. This marks the first application of the Impact Assessment Guidelines adopted for testing by the 3L3 Committees last year.
"Stakeholders agree on the need to replace the Simplified Prospectus with a set of concise, meaningful disclosures for UCITS. As regulators, we are keen to see retail investors grasping the key information which helps them make informed judgements on risk and compare products effectively. Failure to achieve this will mean the single market in financial services for retail investors cannot advance effectively and this would be to the detriment both of market participants and ultimately retail investors who too will suffer from less choice at a time when saving and investing for your future is not a luxury any of us can afford to ignore,'' Eddy Wymeersch, chairman of CESR, noted.
Enabling retail investors to distinguish the key information that they should consider when buying a UCITS will ensure they are better placed to make informed decisions. The delivery of this advice to the Commission marks the culmination of the first phase in CESR's work on key investor disclosures for UCITS and an important step forward in achieving this objective. CESR has considered the factors that are likely to make disclosures of product information useful to retail investors and, in particular, the need for such information to be short, focused, expressed in plain language and presented in a way that enables comparisons to be easily made between different offerings. Taking into account stakeholders' views, CESR makes specific recommendations on a number of points, while in some areas proposes alternative options where testing on retail investors will be particularly important to understand better how consumers react to particular approaches.
A general recommendation that should be noted at the outset is to rename the disclosure the Key Information Document or KID. CESR recommends that the KID should contain only the essential elements for making and carrying out investment decisions, which excludes information serving only legal or regulatory requirements.
SEPA: Easier credit transfers but uncertain cost cuts
Since January 28, every credit transfer carried out in euros is processed in the same way across Europe, with identical procedures and the same time frame but at a cost that will remain different from bank to bank "for a certain time".
The Single Euro Payments Area (SEPA) seeks to extend the possibilities offered by the common European currency to electronic and non-cash payments, which at the moment are only possible in Europe under a range of different national schemes that make them more complicated and less reliable.
The second step in the introduction of SEPA will be the launch at the end of 2009 of a common instrument for direct debits, after the full implementation of the Payment Services Directive, which constitutes the necessary legal framework to apply the foreseen measures. Direct debit payments are executed by a bank automatically following instructions from the customer.
The final phase of SEPA's entry into force will be the introduction by the end of 2010 of a European credit card, featuring a microchip and a common security system. The issuing companies will remain the same but the requirements for the new cards will be harmonised across Europe.
SEPA is designed to harmonise all credit transfers carried out in euros regardless of borders. This move is a direct consequence of the adoption of the euro, which since January 2002 has been the only currency used for cash payments across the eurozone, irrespective of the country.
Brussels identifies benefits for consumers, business, public administration and banks thanks to the new common payment system. Consumers will be able to have a single bank account, used for all their financial operations in euros across Europe. In addition, all the operations will take a maximum of three days, regardless of the country of destination. At the moment, a range of procedures are either prohibited or more complex if carried out in a different country.
The Commission also hopes to see a decrease in the cost of operations covered by SEPA. Brussels thinks that making the use of services offered by banks easier regardless of the country concerned will allow customers to make the best choices and force banks to become more competitive and cut costs. But price differences for credit transfers are not expected to change overnight, according to the banking sector. The Commission is sure that the new system will bring bank costs down.
New licences issued January/February 2008
(i) Collective investment scheme licences
Professional Investor Funds
• Licence issued to RBAM 1 Funds SICAV plc and RBAM 11 Funds SICAV in respect of one sub-fund each. These funds are Professional Investor Funds targeting qualifying investors.
• Licence issued to Wood & Company Fund SICAV plc in respect of one sub-fund. This fund is a Professional Investor Fund targeting qualifying investors.
• Licence issued to Altma Fund SICAV plc in respect of one-sub-fund. This fund is a Professional Investor Fund targeting qualifying investors.
Retail Funds
• Licence issued to APS Funds SICAV plc in respect of one sub-fund.
(ii) Trusts and trustees licences
• QUBE Holdings Ltd has been authorised under the Trusts and Trustees Act.
• Credence Holdings Ltd has been authorised under the Trusts and Trustees Act.
• Licence issued to GM Corporate and Fiduciary Services Ltd. Licence is restricted to the provision of fiduciary services which do not include acting as trustee.
(iii) Financial institutions licences
• Licence issued to Crystal Loan Brokers Ltd to carry out activity of money broking.
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.
MFSA website: www.mfsa.com.mt
Registry website: registry.mfsa.com.mt
Consumer website: www.mfsa.com.mt/consumer
The MFSA through its Education Consultative Council has approved the training programme calendar for 2008. The short programmes are scheduled to commence in March 2008.
This year's training calendar includes an introductory course on alternative investments and a course on hedge funds by the Institute of Financial Services in collaboration with the Alternative Investment Management Association (AIMA). AIMA is a global not-for-profit association representing the global alternative investment community and provides a centre of knowledge for professional investment practitioners. The introductory course on alternative investments will be held over two half-day sessions in April and will look at an overview of hedge funds, private equity funds, property funds, venture capital and commodities. The course will also provide an insight into how a hedge fund works and also the evaluation of hedge funds including risk management.
The course on hedge funds, on the other hand, will provide a detailed and comprehensive picture of the hedge fund industry, over one and a half days. The course will cover the operations of hedge funds including investment styles and risk management and will also give some information about issues for hedge fund investors.
Other training programmes cover a wide range of topics within the financial services sector including insurance underwriting, company law, asset management, prevention of money laundering and corporate governance for banking. These training programmes are being held in conjunction with various training institutes and international associations and organisations.
Insurance consultationThe MFSA recently circulated insurance business proposals for legal notices/ministerial regulations and for new laws and amendments to existing laws. Pursuant to article 32 of the Insurance Business Act (Cap. 403), companies authorised to carry out insurance under the Act are required to submit business of insurance statements as set out in Insurance Rule 12 of 2007. The MFSA is proposing to add two new parts, Part E and Part I, in the schedule to the rule. Part E will contain the certificate by directors, the certificate by appointed actuary, and the auditors' report. Part I is a new part which will be dedicated to miscellaneous business statements. The MFSA is currently issuing reinsurance business statements within Part I. Comments on the proposals are to be sent to the MFSA in writing by not later than March 28.
International news - Better retail investor information for UCITS
The Committee of European Securities Regulators (CESR) recently published its advice to the European Commission on "the content and form of Key Information Document disclosures for UCITS", known as KID. The new disclosure document is intended to simplify and highlight the crucial elements that a retail investor should consider when buying a UCITS. The purpose of the KID is ultimately to replace the Simplified Prospectus for Retail Investors, following further market testing to be undertaken by the European Commission. This work was launched at the request of the European Commission in April 2007, as part of its wider work to revise the UCITS Directive. CESR's proposal was subject to significant consultation with market participants and EU retail consumer associations. This marks the first application of the Impact Assessment Guidelines adopted for testing by the 3L3 Committees last year.
"Stakeholders agree on the need to replace the Simplified Prospectus with a set of concise, meaningful disclosures for UCITS. As regulators, we are keen to see retail investors grasping the key information which helps them make informed judgements on risk and compare products effectively. Failure to achieve this will mean the single market in financial services for retail investors cannot advance effectively and this would be to the detriment both of market participants and ultimately retail investors who too will suffer from less choice at a time when saving and investing for your future is not a luxury any of us can afford to ignore,'' Eddy Wymeersch, chairman of CESR, noted.
Enabling retail investors to distinguish the key information that they should consider when buying a UCITS will ensure they are better placed to make informed decisions. The delivery of this advice to the Commission marks the culmination of the first phase in CESR's work on key investor disclosures for UCITS and an important step forward in achieving this objective. CESR has considered the factors that are likely to make disclosures of product information useful to retail investors and, in particular, the need for such information to be short, focused, expressed in plain language and presented in a way that enables comparisons to be easily made between different offerings. Taking into account stakeholders' views, CESR makes specific recommendations on a number of points, while in some areas proposes alternative options where testing on retail investors will be particularly important to understand better how consumers react to particular approaches.
A general recommendation that should be noted at the outset is to rename the disclosure the Key Information Document or KID. CESR recommends that the KID should contain only the essential elements for making and carrying out investment decisions, which excludes information serving only legal or regulatory requirements.
SEPA: Easier credit transfers but uncertain cost cutsSince January 28, every credit transfer carried out in euros is processed in the same way across Europe, with identical procedures and the same time frame but at a cost that will remain different from bank to bank "for a certain time".
The Single Euro Payments Area (SEPA) seeks to extend the possibilities offered by the common European currency to electronic and non-cash payments, which at the moment are only possible in Europe under a range of different national schemes that make them more complicated and less reliable.
The second step in the introduction of SEPA will be the launch at the end of 2009 of a common instrument for direct debits, after the full implementation of the Payment Services Directive, which constitutes the necessary legal framework to apply the foreseen measures. Direct debit payments are executed by a bank automatically following instructions from the customer.
The final phase of SEPA's entry into force will be the introduction by the end of 2010 of a European credit card, featuring a microchip and a common security system. The issuing companies will remain the same but the requirements for the new cards will be harmonised across Europe.
SEPA is designed to harmonise all credit transfers carried out in euros regardless of borders. This move is a direct consequence of the adoption of the euro, which since January 2002 has been the only currency used for cash payments across the eurozone, irrespective of the country.
Brussels identifies benefits for consumers, business, public administration and banks thanks to the new common payment system. Consumers will be able to have a single bank account, used for all their financial operations in euros across Europe. In addition, all the operations will take a maximum of three days, regardless of the country of destination. At the moment, a range of procedures are either prohibited or more complex if carried out in a different country.
The Commission also hopes to see a decrease in the cost of operations covered by SEPA. Brussels thinks that making the use of services offered by banks easier regardless of the country concerned will allow customers to make the best choices and force banks to become more competitive and cut costs. But price differences for credit transfers are not expected to change overnight, according to the banking sector. The Commission is sure that the new system will bring bank costs down.
New licences issued January/February 2008
(i) Collective investment scheme licences
Professional Investor Funds
• Licence issued to RBAM 1 Funds SICAV plc and RBAM 11 Funds SICAV in respect of one sub-fund each. These funds are Professional Investor Funds targeting qualifying investors.
• Licence issued to Wood & Company Fund SICAV plc in respect of one sub-fund. This fund is a Professional Investor Fund targeting qualifying investors.
• Licence issued to Altma Fund SICAV plc in respect of one-sub-fund. This fund is a Professional Investor Fund targeting qualifying investors.
Retail Funds
• Licence issued to APS Funds SICAV plc in respect of one sub-fund.
(ii) Trusts and trustees licences
• QUBE Holdings Ltd has been authorised under the Trusts and Trustees Act.
• Credence Holdings Ltd has been authorised under the Trusts and Trustees Act.
• Licence issued to GM Corporate and Fiduciary Services Ltd. Licence is restricted to the provision of fiduciary services which do not include acting as trustee.
(iii) Financial institutions licences
• Licence issued to Crystal Loan Brokers Ltd to carry out activity of money broking.
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.
MFSA website: www.mfsa.com.mt
Registry website: registry.mfsa.com.mt
Consumer website: www.mfsa.com.mt/consumer