Investment Services Licence Application Process & Fees

Investment Services Licence Application Process & Fees

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The application process with the Malta Financial Services Authority grouped into three (3) distinct phases: 1 – Preparatory stage; 2 – Pre-licensing stage; and 3 – Post-licensing/pre-commencement of business stage.

The Application process of an Investment Services Licence

The Preparatory Stage

The promoters of an application for an Investment Services Licence should hold a preliminary meeting with the MFSA to outline their proposal, together with their legal / regulatory advisors. This meeting should be held well in advance of submitting an application for a licence. Following this preliminary meeting, promoters usually submit a draft Licence Application Form, together with the relevant supporting documentation. The Application Form and all material submitted should be in English, or if in another language, such should be accompanied by an English translation.

The required timeframe is very dependent on the completeness of the documentation submitted and on the applicant’s efficiency.

The Pre-Licensing Stage

Once the draft application and supporting documentation have been reviewed and the draft licence conditions have been agreed to, the MFSA will issue its ‘in principle’ decision for the issue of a licence.

Upon receiving a positive decision, the applicant will then be required to finalise any outstanding matters, such as company incorporation, submission of signed copies of the final application form together with supporting documentation in their final format, as well as any other issues raised during the application process.

The Post-Licensing Stage

The applicant may also be required to satisfy a number of post-licensing matters prior to formal commencement of business. Such post-licencing requirements are typically specific to each applicant.

Licence Application and Supervisory Fees

An application fee becomes due upon submission of the draft licence application to the Malta Financial Services Authority. An annual fee is payable on the day the licence is issued, and on each subsequent anniversary thereafter. The respective fees per licence type are listed below:

Categories and Activities

CategoryActivities
Investment Firms MiFID 2 investment services in relation to one or more financial instruments.
Alternative Investment Fund Managers (AIFM)Management of funds classified as alternative investment funds (AIF)
De Minimis AIFMManagers of AIFs which satisfy one of the two following criteria:

a. Either directly or indirectly, through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manage portfolios of AIFs whose assets under management, including any assets acquired through use of leverage, in total do not exceed a threshold of EUR 100 million; or

b. Either directly or indirectly, through a company with which the AIFM is linked by common management or control, or by a substantive direct or indirect holding, manage portfolios of AIFs whose assets under management in total do not exceed a threshold of EUR 500 million when the portfolios of AIFs consist of AIFs that are unleveraged and have no redemption rights exercisable during a period of 5 years following the date of initial investment in each AIF.
UCITS Management CompaniesManagement of funds classified as Undertakings for the Collective Investment in Transferable Securities (UCITS)
DepositoryActing as trustees or custodians in
relation to all types of funds.
Depository LiteActing as trustees or custodians in
relation to:

a. AIFs which have no redemption rights exercisable during the five-year period from the date of initial investment and which generally do not invest in assets that must be held in custody; or

b. AIFs marketed in Malta in terms of specific legal restrictions.
Data Reporting Service ProvidersThese include:
a. approved publication arrangements firms who make public the details of transactions in financial instruments

b. approved reporting mechanism a firm who reports the details of transactions to regulators for the purposes of market abuse surveillance; and

c. consolidated tape providers which provide the service of collecting trade reports for financial instruments from regulated markets, MTFs, OTFs and APAs and consolidating them into a continuous electronic live data stream providing price and volume data per financial instrument.

Capital Requirements and MFSA Fees:

Category Minimum Capital MFSA Application FeeMFSA Annual Supervisory Fee
Investment Firms authorised to
provide one or more of the
following Investment Services:
a. Reception and transmission of orders in relation to one or more instruments;
b. Execution of orders;
c. Portfolio management;
d. Investment advice;
e. Placement of instruments without a firm commitment basis;
but not to hold or control clients’
money or customers’ assets
EUR 75,000EUR 2,500For revenue up to
EUR 50,000 – EUR 2,000

Further tranches of EUR 50,000 up to a maximum of EUR 1,000,000 - EUR 350 per tranche or part thereof.
Investment Firms authorised to provide one or more of the following Investment Services:
a. Reception and transmission of orders in relation to one or more instruments;
b. Execution of orders;
c. Portfolio management;
d. Investment advice;
e. Placement of instruments without a firm commitment basis;
and to hold or control clients’
money or customers’ assets
EUR 150,000EUR 3,000For revenue up to
EUR 50,000 – EUR 2,750

Further tranches of EUR 50,000 up to a maximum of EUR 1,000,000 - EUR 350 per tranche or part thereof.
Investment Firms authorised to provide any Investment Service and to hold or control clients’
money or customers’ assets
EUR 750,000EUR 5,000For revenue up to
EUR 250,000 – EUR 4,500

Further tranches of EUR 520,000 up to a maximum of EUR 50,000,000 - EUR 400 per tranche or part thereof.
DepositoryEUR 730,000EUR 17,000EUR 15,000
Depositary LiteEUR 125,000EUR 7,500EUR 5,000

Key Contacts

Franklin Cachia

Director - Tax & Regulated Industries

Contact
Rachel Pecorella Genovese

Manager – Shipping, IP & Commercial