On the 7th of December 2023, the Malta Financial Services Authority (MFSA) published a circular advising VFASPs that the new version of Chapter 3 of the VFA Rulebook shall become applicable in two stages, with the first becoming applicable on 1 January 2024 and the second stage becoming applicable on 1 July 2024.

Back in September of this year, a Consultation was issued wherein various amendments to Chapter 3 of the Rulebook were proposed in order to align the requirements applicable to VFA Service Providers to those found within Title V of the Markets in Crypto-Assets (‘MiCA’) Regulation. Following the feedback received, the MFSA determined that it would be best for the updates and any deletions in the new Chapter 3 of the VFA Rulebook to apply as set out in the tables below.

Stage 1 – Applicable date: 1 January 2024

Requirement under Chapter 3 of the VFA Rulebook New updates or removal of requirements
Systems Audit (Title 2, Section 1, Sub-Section 4 & R3-3.1.6.6) Removal
IT Audit (Title 2, Section 1, Sub-section 5 & R3-3.1.6.7) New updates
Prudential (R3-2.2.3.4.3 & Title 3, Section 3) New updates
Reporting: Risk Management and the Internal Capital Adequacy Assessment Report (R3-3.5.4.5) Removal
Conduct of Business (R3-3.4.1.3 – R3-3.4.1.5) New updates
Client Categorisation (R3-3.4.3.3) Removal

Stage 2 – Applicable date: 1 July 2024

Requirement under Chapter 3 of the VFA Rulebook New updates or removal of requirements
Outsourcing
(R3-3.1.6.4)
New updates
Orderly Wind-Down Plan
(Title 3, Section 1, Sub-Section 8)
New updates
Supplementary Conditions applicable to Specific VFA Services
(Title 3, Section 2)
New updates
Conduct of Business
(R3-3.4.1.6)
New updates

Other important updates

VFASP Return: In view of the changes to Chapter 3 of the Rulebook, the MFSA will be issuing an updated VFASP Return in Q1, which VFA Service Providers will be required to submit at the end of Q1 in line with their reporting obligations.

VFA Agent role: Following on previous communication, the MFSA has in 2023 commenced the legislative process following its proposal to remove the role of the VFA Agent from the VFA Framework. Chapter 3 of the Rulebook will be updated accordingly once these legislative amendments are published.

Outreach: Pursuant to feedback received on the consultation on changes to Chapter 3, the MFSA will in Q1 commence outreach with its VFA Service Providers in order to discuss (i) MiCA preparedness and (ii) issues raised vis-à-vis compliance with MiCA requirements. VFA Service Providers should expect to receive communication from the MFSA in this respect.

MiCA supplementary text: cognisant of the fact that the MiCA Regulation is supplemented by various regulatory technical standards, implementing technical standards and guidelines, further updates to the VFA Framework applicable to VFA Service Providers will be made in order to integrate these supplementary requirements once these are published.

The above updates are clear evidence of the MFSA’s efforts for Malta to be well prepared for the implementation of MiCA ahead of the stipulated deadlines.

About the Author

This article has been authored by Dr Simon Mangion, Regulatory & Business Advisor. Contact us here or on info@csbgroup.com for more information.

'Investment Funds & Asset Management' Related News Articles

01
ESG
GRC in Malta: Governance and ESG – Navigating the Intersection between Profit and Purpose
Ganado Advocates

by Ganado Advocates

5th April 2024

BOV OFFERS MAPFRE MSV Life CAPITAL GUARANTEED AND INCOME PLANS
Bank of Valletta

by Bank of Valletta

5th March 2024

Stable Return Fund of SCM Sicav plc was selected among the best flexible funds at the Diaman Awards
Solutions Capital Management SICAV p.l.c.

by Solutions Capital Management SICAV p.l.c.

4th March 2024

ESMA Consults on the ‘Classification of Crypto-Assets as Financial Instruments’ and ‘Reverse Solicitation’ under MiCA
Ganado Advocates

by Ganado Advocates

23rd February 2024

Agreement reached on the proposed Anti-Money Laundering Regulation and Sixth Anti-Money Laundering Directive
Ganado Advocates

by Ganado Advocates

19th February 2024

MFSA Circular on the Newly Published Accountancy Profession Regulations, 2023 (Legal Notice 299 of 2023)
Ganado Advocates

by Ganado Advocates

22nd January 2024

The Guaranteed Capital & Income Plan 2026 II now available from all BOV Branches, Investment Centres and Private Banking
Bank of Valletta

by Bank of Valletta

6th September 2023

New Guidance: Practical Guidance for Economic Operators: Detecting and Preventing Sanctions Evasion and Circumvention in Trade
Ganado Advocates

by Ganado Advocates

16th August 2023

ESG
ESG is here to stay as both the Asset Wealth Management and the policymakers seem set on an irreversible course of action
Zeta

by Zeta

26th July 2023

BOV Asset Management Limited launches the Global Multi-Asset Thematic 60 Fund managed by Fidelity International
Bank of Valletta

by Bank of Valletta

7th May 2023

INFOCREDIT GROUP AMONG THE SPONSORS OF MALTA FINANCIAL CRIME COMPLIANCE CONFERENCE 2023
Infocredit Group Limited

by Infocredit Group Limited

3rd May 2023

The CJEU clarifies key issues on the adoption of enforcement measures in respect of sanctioned entities
Ganado Advocates

by Ganado Advocates

4th January 2023

BOV Asset Management named official representative of Fidelity International in Malta
Bank of Valletta

by Bank of Valletta

25th November 2022

High calibre international speakers for FinanceMalta’s 15th Annual Conference
FinanceMalta

by FinanceMalta

28th October 2022

CJEU clarifies when dividend payments by fund managers must comply with the sound remuneration principles under AIFMD and UCITS Directive
Ganado Advocates

by Ganado Advocates

14th October 2022

New EU Cross-Border Distribution of Funds Rules: Key Considerations for UCITS and AIFs and their Asset Managers
Ganado Advocates

by Ganado Advocates

20th January 2022

ESMA Guidelines on the application of the appropriateness assessment and execution-only requirements under MiFID II
Ganado Advocates

by Ganado Advocates

20th January 2022

SAXO Bank Chief Economist optimistic for recovery in Malta’s Trade, Transport and Tourism
Bank of Valletta

by Bank of Valletta

25th May 2021

The future of Trade, Transport and Tourism in Malta – a business webinar by BOV, Saxo Bank and Malta Maritime Forum
Bank of Valletta

by Bank of Valletta

17th May 2021

What to expect: BOV, Malta Chamber and Saxo Bank debate on the future of businesses
Bank of Valletta

by Bank of Valletta

29th September 2020