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 [email protected] for more information.
