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Review of the Alternative Investment Fund Managers Directive (“AIFMD”)

On 4 November 2020, the MFSA issued a circular informing AIFMs that the European Commission (“EC”) has launched a public consultation on the review of the AIFMD. The Consultation Document is publicly available on the EC’s website.  The MFSA strongly encourages interested parties encouraged to send their feedback by not later than 29 January 2021.

ESMA Q&As on MiFID II and MiFIR Investor Protection and Intermediaries Topics

On 9 November 2020, the MFSA issued a circular notifying investment firms that ESMA had updated its Q&As providing new answers on product governance. The newly added Q&As apply to investment firms which manufacture financial instruments and address how the costs and charges associated with such instruments should:

  • be compatible with the needs, objectives and characteristics of the target market;
  • not undermine the instrument’s expected return; and
  • have a transparent charging structure for its target market.

Brexit Readiness

On 18 November 2020, the MFSA issued a circular addressing Maltese Licence Holders providing Services in the UK. The UK withdrew from the European Union (“EU”) on 31 January 2020 on the basis of the agreement (the “Withdrawal Agreement”) concluded between the EU and the UK on 17 October 2019. This Withdrawal Agreement included a transition period until 31 December 2020 whereby the EU law will stop applying in the UK as from 1 January 2021. Maltese licence holders wishing to continue providing financial services in the UK should register to do so under the UK Temporary Permission Regime before 31 December 2020.

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