Two banks among newly licensed institutions
The financial services sector continues to expand at a steady rate. Licences issued by the MFSA in recent weeks spread across all departments, with the banking sector, investment services and insurance continuing to attract sustained levels of business.
Two groups from the Gulf region have been given the green light to set up banking subsidiaries in Malta. Saadgroup Bank Europe Ltd was licensed to carry out banking activities as a credit institution on October 19.
The Saad Group, a diversified group of companies with many years experience in investment, finance and banking, is headquartered in Al-Khobar, Saudi Arabia. "The Malta operation will grow the Group's worldwide banking structure and provide a natural way of strengthening Saad's relationship with European financial institutions," a spokesperson for the Saad Group said.
The International Banking Corporation (Malta) plc (TIBC) was the second credit institution to be licensed in the space of a month. TIBC's parent company is based in Bahrain and forms part of the Saudi-based Algosaibi Group.
The first collective investment scheme to be structured as a limited partnership in Malta was granted its licence on September 28. Abbey Capital Fund LP is a professional investor fund which was set up with one sub-fund, the Abbey Capital Macro Fund, targeting qualifying investors. Meanwhile, Abbey Capital Ltd, the Irish asset management company, has set up another collective investment scheme, ACL Fund SICAV Ltd, targeting qualifying investors with its ACL Global Fund.
The introduction of the extraordinary investor funds regime over the summer has led to the formation of the first such fund by Renaissance Institutional Futures Fund plc. The scheme is managed by US-based Renaissance Technologies Corporation, who already manage another scheme in Malta.
Other professional investor funds licensed over the past few weeks include two umbrella schemes managed by Atlantik Asset Management of the Czech Republic and administered by HSBC Securities Services (Malta) Ltd, and SAF SICAV plc, a self-managed qualifying investor fund of Swiss origin with three sub-funds.
On the UCITS side, the Celsius Global Funds SICAV plc continued expanding with the licensing of a new sub-fund, the Barclays RMF Diversified Index (EUR) fund. Meanwhile, a new self-managed UCITS scheme, Fraternitas SICAV plc, was licensed on October 29, with its first sub-fund, Fraternitas Ethical Fund, being the first ethical fund to be licensed in Malta.
Malta's fund servicing capabilities are also building up nicely with two Category 2 licences issued in November to Occam Investment Management Ltd and MFSP Financial Management Ltd respectively.
A new fund administration company is also reported to be at an advanced stage of obtaining recognition from the MFSA to start operating in Malta.
Earlier this month the Bermuda-based, Butterfield Bank also announced that it acquired the Bentley Reid Group, a privately-held, international wealth management company with offices in Hong Kong, London and Malta. Through its Malta-based subsidiary, Bentley Trust, the group provides trust and company formation and administration on an international, multi-jurisdictional basis. Graham Brooks, executive vice president, international, Butterfield Bank said: "The office in Malta gives us a foothold in one of Europe's newer financial centres, providing us with another jurisdiction through which we can administer clients' assets."
Meanwhile, two new insurance companies, International Diving Assurance Ltd and European Insurance Group Ltd were authorised under the Insurance Business Act to carry out general business in a number of areas.
The new companies will be operating on a cross-border basis serving clients in the EU. Dan Europe Insurance Brokers Ltd and FPC Investment Consultants Ltd were also enrolled in the brokers list in terms of the Insurance Intermediaries Act.
Investment services rules streamlined
Malta is the first EU member state to bring the new UCITS eligible assets regime into operation, opening the way for asset managers to be first to benefit from greater clarity shed over the market by the new regime.
Following two years of work by the European Commission and the Committee of European Securities Regulators (CESR) on the clarification of definitions for eligible assets in which UCITS funds can be invested, the new definitions were finally adopted by Directive 2007/16/EC. The new MFSA Investment Services Rules for Retail Collective Investment Schemes, which have fully transposed the directive, provide a better understanding as to the nature of "permissible investment instruments" that UCITS may invest in.
The new rules now also allow the use of investment instruments linked to hedge fund indices provided these qualify as "financial indices" under the directive and that the index methodology provides for the selection and the re-balancing of components on the basis of pre-determined rules and objective criteria. In this regard the new rules issued by the MFSA also take into account the guidelines published by CESR to assist regulators and market participants in the interpretation of the directive.
Under the new rules, the assessment of the global/total exposure relating to financial derivative instruments within a UCITS scheme, and its leverage may be assessed on the basis of an advanced risk-measurement approach such as VaR as proposed by Commission recommendation 27/4/04. Non-sophisticated UCITS may alternatively make use of the commitment approach.
The relevant provisions have come into force on November 1, following a complete overhaul of legislation that has also ushered in MIFID and the Capital Requirements Directive. The relevant amendments to the Investment Services Act and related subsidiary legislation have led to a root and branch review of the MFSA's investment services guidelines which have been replaced by a more user-friendly set of MFSA Investment Services Rules. The new rules relate to investment services providers, professional investor funds, retail collective investment schemes, and recognised persons and retail CISs.
Member states have until March 23, 2008 to publish the relevant regulations and a further four months to bring them into force.
MFSA warns against 'special offers' and 'free gifts'
The MFSA notes with concern media reports on the launch of 'offers' by licensed financial institutions, aimed at enticing new and existing customers with free gifts and participation in a prize lottery.
Consumers should be wary of falling for marketing gimmicks that offer free gifts or participation in lotteries when applying to purchase bonds and other investment, banking and insurance products. The decision to purchase a financial product should not be the result of impulse, nor should it be clouded by the potential acquisition of a reward that is completely alien to the product itself. The long-term financial commitment tied to these products calls for careful consideration. Consumers should seek independent and expert advice from licensed financial intermediaries before agreeing to purchase such products.
Insurance and risk management issues under the spotlight
"Insurers need to engage with the debate and start preparing now, if they do not want to be caught out when Solvency II comes into force," according to Ben Carr, member of the insurance and pensions unit in the Internal Market Directorate General of the European Commission.
Solvency II is aimed at enhancing policyholder protection by providing appropriate incentives to improve risk management and to recognise good practice in the insurance industry.
"Captives, in particular, need to engage with CEIOPS (the Committee of European Insurance and Occupational Pensions Supervisors) and participate in the QIS4 debate in order to ensure appropriate application of the proportionality principle to captive insurers under Solvency II."
Mr Carr was speaking at the Malta Insurance Rendezvous, the first international insurance conference organised by RIRG in Malta in association with the MFSA.
CEIOPS consultations with stakeholders on QIS4 will start next year. Operators are being encouraged to liaise closely with their regulators throughout the process. The MFSA has been a strong advocate of the proportionality principle within CEIOPS and will be carrying out consultations with the industry in this respect. Introducing the conference, MFSA chairman Joe Bannister said that the Maltese authorities are committed to ensuring that regulatory and tax policies at EU level are conducive to the continued development of the financial services sector.
Issues such as the extent to which EU regulators would allow companies to place their reinsurance with non-EU reinsurers following the implementation of the Reinsurance Directive, as well as current consultations on the introduction of more flexibility into Malta's protected cell company legislation, also came up for discussion.
Other speakers at the Malta Insurance Rendezvous included Marie-Gemma Dequae, president of the Federation of European Risk Managers Association, Dr Marisa Attard, MFSA insurance unit director, representatives from the insurance management and insurance industry, corporate risk managers and service providers.
New licences October/November
Collective investment scheme licences
Professional Investor Funds (targeting qualifying investors)
• Altma Fund SICAV plc. in respect of three sub funds.
• NBCG Fund SICAV plc in respect of 10 sub funds.
• SAF SICAV plc in respect of three sub funds.
• ACL Fund SICAV Ltd in respect of one sub fund.
Maltese UCITS
• Collective Investment Scheme licence issued to Fraternitas SICAV plc.
Investment services licences
• Category 2 Licence issued to MFSP Financial Management Ltd.
• Category 2 Licence issued to Occam Investment Management (Malta) Ltd.
Insurance business licences
• International Diving Assurance Ltd (IDA) has been granted authorisation to carry on general business of insurance in seven different classes.
• European Insurance Group Ltd has been granted authorisation to carry on business of insurance restricted to risks situated outside Malta in five classes of general business.
Enrolment in the brokers list
• Dan Europe Insurance Brokers Ltd and FPC Investment Consultants were granted enrolment in the Brokers List
Credit institution licences
• Licence issued to The International Banking Corporation (Malta) Ltd to carry out business of banking and additional activities.
• Licence issued to Saadgroup Bank Europe Ltd to carry out business of banking and additional activities.
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).
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
The financial services sector continues to expand at a steady rate. Licences issued by the MFSA in recent weeks spread across all departments, with the banking sector, investment services and insurance continuing to attract sustained levels of business.Two groups from the Gulf region have been given the green light to set up banking subsidiaries in Malta. Saadgroup Bank Europe Ltd was licensed to carry out banking activities as a credit institution on October 19.
The Saad Group, a diversified group of companies with many years experience in investment, finance and banking, is headquartered in Al-Khobar, Saudi Arabia. "The Malta operation will grow the Group's worldwide banking structure and provide a natural way of strengthening Saad's relationship with European financial institutions," a spokesperson for the Saad Group said.
The International Banking Corporation (Malta) plc (TIBC) was the second credit institution to be licensed in the space of a month. TIBC's parent company is based in Bahrain and forms part of the Saudi-based Algosaibi Group.
The first collective investment scheme to be structured as a limited partnership in Malta was granted its licence on September 28. Abbey Capital Fund LP is a professional investor fund which was set up with one sub-fund, the Abbey Capital Macro Fund, targeting qualifying investors. Meanwhile, Abbey Capital Ltd, the Irish asset management company, has set up another collective investment scheme, ACL Fund SICAV Ltd, targeting qualifying investors with its ACL Global Fund.
The introduction of the extraordinary investor funds regime over the summer has led to the formation of the first such fund by Renaissance Institutional Futures Fund plc. The scheme is managed by US-based Renaissance Technologies Corporation, who already manage another scheme in Malta.
Other professional investor funds licensed over the past few weeks include two umbrella schemes managed by Atlantik Asset Management of the Czech Republic and administered by HSBC Securities Services (Malta) Ltd, and SAF SICAV plc, a self-managed qualifying investor fund of Swiss origin with three sub-funds.
On the UCITS side, the Celsius Global Funds SICAV plc continued expanding with the licensing of a new sub-fund, the Barclays RMF Diversified Index (EUR) fund. Meanwhile, a new self-managed UCITS scheme, Fraternitas SICAV plc, was licensed on October 29, with its first sub-fund, Fraternitas Ethical Fund, being the first ethical fund to be licensed in Malta.
Malta's fund servicing capabilities are also building up nicely with two Category 2 licences issued in November to Occam Investment Management Ltd and MFSP Financial Management Ltd respectively.
A new fund administration company is also reported to be at an advanced stage of obtaining recognition from the MFSA to start operating in Malta.
Earlier this month the Bermuda-based, Butterfield Bank also announced that it acquired the Bentley Reid Group, a privately-held, international wealth management company with offices in Hong Kong, London and Malta. Through its Malta-based subsidiary, Bentley Trust, the group provides trust and company formation and administration on an international, multi-jurisdictional basis. Graham Brooks, executive vice president, international, Butterfield Bank said: "The office in Malta gives us a foothold in one of Europe's newer financial centres, providing us with another jurisdiction through which we can administer clients' assets."
Meanwhile, two new insurance companies, International Diving Assurance Ltd and European Insurance Group Ltd were authorised under the Insurance Business Act to carry out general business in a number of areas.
The new companies will be operating on a cross-border basis serving clients in the EU. Dan Europe Insurance Brokers Ltd and FPC Investment Consultants Ltd were also enrolled in the brokers list in terms of the Insurance Intermediaries Act.
Investment services rules streamlined
Malta is the first EU member state to bring the new UCITS eligible assets regime into operation, opening the way for asset managers to be first to benefit from greater clarity shed over the market by the new regime.
Following two years of work by the European Commission and the Committee of European Securities Regulators (CESR) on the clarification of definitions for eligible assets in which UCITS funds can be invested, the new definitions were finally adopted by Directive 2007/16/EC. The new MFSA Investment Services Rules for Retail Collective Investment Schemes, which have fully transposed the directive, provide a better understanding as to the nature of "permissible investment instruments" that UCITS may invest in.
The new rules now also allow the use of investment instruments linked to hedge fund indices provided these qualify as "financial indices" under the directive and that the index methodology provides for the selection and the re-balancing of components on the basis of pre-determined rules and objective criteria. In this regard the new rules issued by the MFSA also take into account the guidelines published by CESR to assist regulators and market participants in the interpretation of the directive.
Under the new rules, the assessment of the global/total exposure relating to financial derivative instruments within a UCITS scheme, and its leverage may be assessed on the basis of an advanced risk-measurement approach such as VaR as proposed by Commission recommendation 27/4/04. Non-sophisticated UCITS may alternatively make use of the commitment approach.
The relevant provisions have come into force on November 1, following a complete overhaul of legislation that has also ushered in MIFID and the Capital Requirements Directive. The relevant amendments to the Investment Services Act and related subsidiary legislation have led to a root and branch review of the MFSA's investment services guidelines which have been replaced by a more user-friendly set of MFSA Investment Services Rules. The new rules relate to investment services providers, professional investor funds, retail collective investment schemes, and recognised persons and retail CISs.
Member states have until March 23, 2008 to publish the relevant regulations and a further four months to bring them into force.
MFSA warns against 'special offers' and 'free gifts'
The MFSA notes with concern media reports on the launch of 'offers' by licensed financial institutions, aimed at enticing new and existing customers with free gifts and participation in a prize lottery.Consumers should be wary of falling for marketing gimmicks that offer free gifts or participation in lotteries when applying to purchase bonds and other investment, banking and insurance products. The decision to purchase a financial product should not be the result of impulse, nor should it be clouded by the potential acquisition of a reward that is completely alien to the product itself. The long-term financial commitment tied to these products calls for careful consideration. Consumers should seek independent and expert advice from licensed financial intermediaries before agreeing to purchase such products.
Insurance and risk management issues under the spotlight
"Insurers need to engage with the debate and start preparing now, if they do not want to be caught out when Solvency II comes into force," according to Ben Carr, member of the insurance and pensions unit in the Internal Market Directorate General of the European Commission.
Solvency II is aimed at enhancing policyholder protection by providing appropriate incentives to improve risk management and to recognise good practice in the insurance industry.
"Captives, in particular, need to engage with CEIOPS (the Committee of European Insurance and Occupational Pensions Supervisors) and participate in the QIS4 debate in order to ensure appropriate application of the proportionality principle to captive insurers under Solvency II."
Mr Carr was speaking at the Malta Insurance Rendezvous, the first international insurance conference organised by RIRG in Malta in association with the MFSA.
CEIOPS consultations with stakeholders on QIS4 will start next year. Operators are being encouraged to liaise closely with their regulators throughout the process. The MFSA has been a strong advocate of the proportionality principle within CEIOPS and will be carrying out consultations with the industry in this respect. Introducing the conference, MFSA chairman Joe Bannister said that the Maltese authorities are committed to ensuring that regulatory and tax policies at EU level are conducive to the continued development of the financial services sector.
Issues such as the extent to which EU regulators would allow companies to place their reinsurance with non-EU reinsurers following the implementation of the Reinsurance Directive, as well as current consultations on the introduction of more flexibility into Malta's protected cell company legislation, also came up for discussion.
Other speakers at the Malta Insurance Rendezvous included Marie-Gemma Dequae, president of the Federation of European Risk Managers Association, Dr Marisa Attard, MFSA insurance unit director, representatives from the insurance management and insurance industry, corporate risk managers and service providers.
New licences October/November
Collective investment scheme licences
Professional Investor Funds (targeting qualifying investors)
• Altma Fund SICAV plc. in respect of three sub funds.
• NBCG Fund SICAV plc in respect of 10 sub funds.
• SAF SICAV plc in respect of three sub funds.
• ACL Fund SICAV Ltd in respect of one sub fund.
Maltese UCITS
• Collective Investment Scheme licence issued to Fraternitas SICAV plc.
Investment services licences
• Category 2 Licence issued to MFSP Financial Management Ltd.
• Category 2 Licence issued to Occam Investment Management (Malta) Ltd.
Insurance business licences
• International Diving Assurance Ltd (IDA) has been granted authorisation to carry on general business of insurance in seven different classes.
• European Insurance Group Ltd has been granted authorisation to carry on business of insurance restricted to risks situated outside Malta in five classes of general business.
Enrolment in the brokers list
• Dan Europe Insurance Brokers Ltd and FPC Investment Consultants were granted enrolment in the Brokers List
Credit institution licences
• Licence issued to The International Banking Corporation (Malta) Ltd to carry out business of banking and additional activities.
• Licence issued to Saadgroup Bank Europe Ltd to carry out business of banking and additional activities.
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).
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