There are only a few days left for feedback to be sent to the Malta Financial Services Authority on its proposals for the amendment of the Investor Compensation Scheme. The amendments aim to bring regulations more in line with the Investor Compensation Scheme Directive.

It is being proposed that all investment firms which fall within the scope of the Directive should participate in the Investor Compensation Scheme – not only Category 1 licensed investment firms but also Category 2 and Category 3 investment firms – even where such firms provide services solely and exclusively to non-retail clients.

Participation by Category 4 investment firms is not being recommended because such firms only offer trustee or custody services to Collective Investment Schemes, which fall outside the current Directive participation requirement.

It is being proposed that the target fund level would be approximately €5.8 million built up over five years – an ex-ante funding coverage ratio of 0.5 per cent which is equivalent to the minimum target fund mandated in the Commission’s proposal in an amendment to the Directive.

Where the ex-ante funds are not adequate to cover all liabilities of a scheme, additional ex-post contributions should be levied.

It is recommended, that as suggested in the proposed Directive, additional ex-post contributions should not exceed 0.5 per cent of the covered monies and financial instruments.

The scheme would settle up to €20,000 in respect of civil liability obtained by an investor against a financial services provider.

Any feedback on the proposed amendments should reach the MFSA by not later than Monday December 5, by e-mail to communications@mfsa.com.mt.