MFSA Issues Consultation on VFA Regulations

Malta is the first country in the world (so far) where a Consultation Paper on the Virtual Financial Assests Regulations is being issued under VFAA (Virtual Financial Assests Act). 

The Regulations are intended to supplement the provisions of the VFAA, providing further guidance to issuers of tokens (particularly those doing an Initial VFA Offering) and offering any services classified as VFA Services under the Act.

 

The Proposed Regulations set out the different licensing categories and VFA Service Licensees Fees that will be possible under the VFAA:

Licence Category

Licensable Activities

Application / Notification Fee

Supervisory Fee

VFAA Class 1

Licence holders authorised to receive and transmit orders and, or provide investment advice in relation to one or more virtual financial assets and, or the placing of virtual financial assets

 €3,000

For revenue up to €50,000 = €2,750

Further tranches of €50,000 up to a maximum of €1,000,000 = €350 per tranche or part thereof

VFAA Class 2

Licence holders authorised to provide any VFA service and to hold or control clients’ money, but not to operate a VFA exchange or deal for their own account

 €5,000

For revenue up to €250,000 = €4,500

Further tranches of €250,000 up to a maximum of €5,000,000 = €400 per tranche or part thereof

VFAA Class 3

Licence holders authorised to provide any VFA service and to hold or control clients’ money, but not to operate a VFA exchange.

 €7,000

For revenue up to €250,000 = €6,000

Further tranches of €250,000 up to a maximum of €50,000,000 = €400 per tranche or part thereof

VFAA Class 4

Licence holders authorised to operate a VFA exchange and to hold or control clients’ money, virtual financial assets and, or private cryptographic keys and custodian or nominee services solely in relation to the operation and activities of such VFA exchange

 €12,000

For revenue up to €1,000,000 = €25,000

Further tranches of €1,000,000 up to a maximum of €100,000,000 = €2,500 per tranche or part thereof

 

Rules on the control of assets

Addional requirements are being proposed when holding and/or controling clients money/assets in order to protect investors by the person/s in possesion on a VFA Service Lisense under the Act or acting under an exemption from the requirement of such a lisense under the Proposed Regulations.

The term “assets” on the other hand refers to movable and immovable property of any kind and excludes financial instruments as defined in the Second Schedule to the Investment Services Act, whether issued in Malta or not.

Administrative penalties and appeals

The proposed Legal Notice establishes that where persons falling with the scope of the Regulations fail to comply with any provision or rules issued thereunder, the MFSA as the competent authority may, by notice in writing and without recourse to a court hearing, impose on such person an administrative penalty and other administrative measures as set out in the VFAA. The authority may in such cases impose an administrative penalty up to €150,000 for each infringement or failure to comply, as the case may be. A right of appeal to the Financial Services Tribunal is also proposed.

Industry participants and interested parties are encouraged to send their feedback to the MFSA by no later than the 20th July 2018.

For more info contact us: This email address is being protected from spambots. You need JavaScript enabled to view it. .

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