Skip to main content

Circular addressed to Corporate Service Providers Classified as Class C

On 1 June 2021, following the publication of the new CSP Rulebook, the Authority issued a circular addressed to CSPs which are authorised as a Class C. Pursuant to Rule R3-7.2, Class C CSPs are required to establish and maintain a Risk Management Function which independently carries out the following tasks:

  1. The implementation of risk management policy and procedures; and
  2. The provision of risk management reports and advice to senior management.

However, Rule R3-7.3 outlines that CSPs may be allowed to establish and maintain a risk management function that does not operate independently, given that this does not give rise to a conflict of interest and the risk management function responsibility is not appropriate and proportionate to the nature, scale and complexity of the business. In this respect, Class C CSPs making avail of such derogation, are required to submit a Request Form which is available from the MFSA’s website.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/circular-addressed-to-corporate-service-providers-classified-as-class-c/

Circular on European Market Infrastructure Regulation (“EMIR”)

On 2 June 2021, the Authority issued a circular notifying all entities falling within scope of EMIR that ESMA had updated its Q&As on data reporting, transparency and data availability, specifically questions relating to Article 9 and Article 81 of EMIR.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/circular-on-updates-to-the-qas-on-regulation-eu-no-648-2012-the-european-market-infrastructure-regulation-emir-the-regulation-2/

Circular on Regulation No 2015/2365 on SFTR – Publication of Q&As on SFTR Reporting

On 2 June 2021, the Authority issued a circular notifying all entities falling within scope of SFTR that ESMA had updated its Q&As to include clarifications with respect to the reporting of changes to the reference rate in a securities financing transaction.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/circular-on-regulation-n0-2015-2365-on-securities-financing-transactions-regulation-sftr-publication-of-qas-on-sftr-reporting/.

The Investment Firms Regulation and Directive – 4th Briefing

On 8 June 2021, the Authority issued the fourth briefing on the implementation of the “IFRD Package which will replace the current Capital Requirements Regulation and the Capital Requirements Directive IV applicable to Investment Firms.

The MFSA provided a brief overview of the changes and amendments to the Investment Service Rules for Investment Service Providers, Part BI applicable to MiFID Firms (the “Rulebook”). The amended Rulebook will now make reference to two different prudential frameworks, the IFRD Package and the CRD Framework.  The MFSA intends to structure the updated Rulebook in 3 Chapters as follows; Chapter A: All Classes, Chapter B: Class 1 and Class 1 minus, and Chapter C: Class 2 and Class 3, whereby licence holders would need to apply the contents based on their respective Class applicability.

The Briefing further details the position that the MFSA is taking with respect to a number of different articles emanating from the IFRD. For further detail in this respect reference should be made to the Annex included within the MFSA briefing.

For further information please refer to fourth IFRD package briefing on the MFSA’s website:

https://www.mfsa.mt/publication/the-investment-firms-regulation-and-directive-4th-briefing/

Measures for the Processing of Physical Documentation

Further to the circular issued on 16 December 2020, whereby the MFSA requested the submission of all original physical documentation which was submitted electronically in line with the circular dated 24 March 2020, on 11 June 2021 the MFSA issued another circular requesting Licence Holders which had not submitted such documentation by the stipulated deadline (15 February 2021), to submit the documentation in physical form by mail or courier without any further delay. The MFSA highlighted that it may consider regulatory action against those Licence Holders who fail to submit the documentation promptly.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/measures-for-the-processing-of-physical-documentation/  

ESMA Guidelines on Outsourcing to Cloud Service Providers

Further to the circular issued on 8 March 2021, the MFSA issued a circular, informing entities making use of Cloud Service Providers that the MFSA has updated the applicable rulebooks for investment firms, AIFMs, UCITS ManCOs, AIFs and UCITS to include refence to the ESMA Guidelines on outsourcing to cloud service providers.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/esma-guidelines-on-outsourcing-to-cloud-service-providers/

Re-Issuance of Investment Services Licences

On 23 June 2021, the MFSA has issued a circular informing all Investment Services Licence Holders (“ISLH”) that the MFSA will be reissuing the licences to reflect the revised licence classification in view of the recent implementation of the IFRD package. The new licences will continue to highlight the regulated activities and services, as well as the products and clients in relation to which such activities and services can be provided. The MFSA is requesting the company to submit their original licence certificates together with the prescribed self-assessment form between the dates stipulated in the circular.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/re-issuance-of-investment-services-licences/

Circular on the Revisiting of the MFSA Notified AIF (“NAIF”) Regime

On 24 June 2021, the Authority published a circular informing the industry that the NAIF regime has been revised and that a revised version of the NAIF Rules reflecting such amendments had been published.

The updates to the revised framework as outlined in the circular include:

  • Changes to the Authorisation process;
  • Ensuring the Rulebook is aligned with the FIAU’s Implementing Procedures; and
  • The AML function.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/circular-on-the-revisiting-of-the-mfsa-notified-aif-regime/

Publication of the MFSA’s Authorisation Charter, Processes and Application Forms

On 30 June 2021, the Authority informed the industry that the Authorisation Process for new licence applicants has been reviewed and updated to ensure efficiency and effectiveness, as well as adopting a consistent approach throughout all sectors. In this respect, the MFSA published an Authorisation Process – Service Charter, incorporated Rule 4 under the MFSA Act (Chapter 330 of the Laws of Malta), established a new dedicated authorisations webpage; and revised the Application Forms and supporting documentation required throughout the entire Authorisation process.

From 5 July 2021 onwards, submission of application forms should be done via the LH Portal.

For further information please refer to circular on the MFSA’s website:

https://www.mfsa.mt/publication/publication-of-the-mfsas-authorisation-charter-processes-and-application-forms/  

The Investment Firms Regulation and Directive 5th Briefing

On 30 June 2021, the Authority issued the fifth briefing on the implementation of the “IFRD Package” which came into effect from 26 June 2021 and replaced the Capital Requirements Framework.

This briefing focused on the reporting requirements introduced by the IFRD, which will become applicable as of Quarter 3 of 2021 for all firms with a 31 December financial year-end and once the reporting period covers at least 3 months under the IFRD regime for firms with a financial year-end other than 31 December.

EBA-XBRL Return

Appendices 2A and 2C have been replaced by Annex I, Annex III, and Annex VIII. Class 2 firms are required to compile and submit Annex I and Annex VIII on a quarterly basis. Class 3 firms are required to compile and submit Annex III on an annual basis and Annex VIII on a quarterly basis. These annexes are to be submitted within 42 days after the end of the accounting-quarter. The EBA-XBRL Return will no longer be submitted in Excel format and is to be submitted to the MFSA through an ad hoc LH Portal project.

Conduct Related-Data Return and List of Financial Instruments

The Conduct-Related Data will now be submitted as a new separate return, named as ‘MiFID Firms Quarterly Reporting’. Investment Firms are required to submit such return as from quarter 3 of 2021 and is to be submitted on a quarterly basis through the ‘Investment Firms reporting’ project on the LH Portal using the following naming convention: CODE_JAN2019_MFREP.zip.

The List of Financial Instruments is to be continued to be submitted 42 days after the end of the reporting period, using the following naming convention: CODE_JAN2019_FIList.zip.

CBM Reporting

Data pertaining to the Central Bank of Malta, which was previously collected through a specific section within the MFSA’s COREP Return, will now be collected through a separate modified return.

For further information please refer to fifth IFRD package briefing on the MFSA’s website:

https://www.mfsa.mt/publication/the-investment-firms-regulation-and-directive-5th-briefing/

Leave a Reply