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Circular to Investment Services Licence Holder (“LHs”) and Collective Investment Schemes (“CISs”) on the MFSA LH Portal

Further to the circular issued on 3 July 2020 with respect to the appointment of Committee Members and/or Valuation Officers, on 5 October 2020, the MFSA issued another circular informing LHs and CISs that the dropdown in Section 2 of the online Personal Questionnaire has been amended to only reflect those positions which require the Authority’s approval.

Circular on Regulation N0 648/2012 The European Markets Infrastructure Regulation (EMIR) 2020 Compliance Inspections: General Findings

On 14 October 2020, the MFSA issued a circular outlining the findings following a number of EMIR inspections and visits held by the Authority during 2020. The findings encountered by the MFSA are the following:

  • Counterparties failed to provide the clearing threshold calculation in accordance with EMIR Refit;
  • Counterparties encountering difficulties to confirm their classification;
  • Counterparties not fully aware of the changes brought about by the EMIR Refit, and in particular the fact that the responsibility of reporting lies with the Fund Manager (when the counterparty is a fund);
  • Delegation agreements not always in place or if in place they were incomplete or not signed by both counterparties;
  • Risk mitigation techniques not being documented, incomplete or unsigned; and
  • Counterparties not having EMIR Procedures in place.

This circular was shared with Management on the 4th of November and we strongly recommend that the above, together with other EMIR requirements, as may be applicable are taken into consideration.

Transaction Reporting by Non-Financial Counterparties under the Securities Financing Transactions Regulation (EU) No2015/2365 (‘SFTR’)

On 19 October 2020, the Authority issued a circular drawing attention to the obligation of non-financial counterparties to report Securities Financing Transactions (‘SFTs’) in accordance with Article 4 of the SFTR. In view of this reporting obligation, which will become applicable from 11 January 2021, the MFSA is requesting entities which offer services to non-financial counterparties to complete Annex 1 attached to the circular and submit by not later than 30 November 2020.

On 19 November 2020, the Authority issued another circular for clarification purposes outlining that the Annex 1 Form should ideally be submitted by the non-financial counterparties themselves.

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