Thursday 17 April 2014

MFSA launches rulebook for collective investment schemes investing through loans

Malta's flexibility as a domicile for funds has recently been enhanced through the introduction of a rulebook addressing the needs of collective investment schemes investing through loans. The introduction of the rulebook answers in the affirmative a question that has long pre-occupied financial services professionals in the jurisdiction i.e. can a fund issue loans? The Maltese legal environment for money lending companies remains imperfect, with the rules governing money lending under the financial institutions act being particularly unwieldy, but there can be no doubt that this is a step in the right direction for Malta.

The positive development does not however come without some caveats.  In particular the rulebook is very particular about the borrowers that may borrow from an MFSA authorised loan issuing fund i.e 'unlisted companies and SMEs'. Some other noteworthy features of the rulebook are the following:

  • The fund must be of a closed-ended nature (although there are certain limited flexibilities)
  • The fund can only be sold to professional investors as defined under MiFID, or investors who elect to be treated as professional investors and invest a minimum of EUR 100,000
  • The fund must implement a credit risk strategy
  • The fund must maintain a liquidity management policy
  • The fund must adhere to a number of investment restrictions
You can read our full report on the rules here:

Dr Charles Cassar
Chetcuti Cauchi Advocates

Monday 7 April 2014

Malta establishes itself as a hub for E-money issuers

Over the past twelve months we have seen increased interest in e-money operators looking to domicile and operate their businesses in Malta. In response to this growth we have published E-money institutions: licensing and regulation in Malta on our website This publication provides what we hope will be a useful introduction to the topic, and covers the following:
  • The definition of e-money under Maltese law
  • The distinction between server based and card based e-money
  • Distinctions between payment service providers and e-money issuers
  • The activities that EMIs authorised in Malta are permitted to undertake
  • Key regulatory requirements
  • The licensing process
  • Why e-money institutions have started to choose Malta as their domicile in Europe
The payments ecosystem as a whole has also registered encouraging growth. You can read about the growth in the related sector of payment services by clicking on the below link:

Malta also continues to attract interest from operators in the virtual currency sphere (non-fiat money such as Bitcoin and Linden dollar). Local authorities remain understandably cautious about the sector, but we believe that it is only a matter of time until these new technologies and systems achieve more widespread acceptance and legitimacy. You can read more about the topic here:

If you are interested in any of these sectors, contact us on
Dr Charles Cassar

Chetcuti Cauchi Advocates

    Monday 20 January 2014

    MFSA Issues Consultation Document on Malta Company Services Providers Rules

    Further to the recent introduction of the Company Service Providers Act, the MFSA has issued a consultation document proposing detailed rules which clarify and implement the provisions of the Act. This is a useful and welcome step, and one which will lend further clarity to an Act which has already been broadly welcome by service providers in Malta. We have uploaded a more detailed overview of the proposed rules on our website here: Malta Company Service Providers Consultation Overview

    The proposed rules should not contain too many surprises for established and complaint service providers, and well established providers are not expected to experience major difficulties in complying. While the rules do introduce introduce an additional layer of documentation and reporting which will be novel to service providers, this is counterbalanced by the benefit resulting from the introduction of a level playing field in the sector.

    The application process is premised on common regulatory procedures centered around fitness and properness, capital adequacy and proper documentation. Our financial services regulatory team has handled various such processes in the context of other regulated areas (such as investment services, funds and financial institutions) and is currently advising a number of CSPs with respect to their prospective applications.

    We are also currently preparing a detailed brief providing a summary and analysis of the Act and the rules, which we will be uploading shortly on 

    Dr Charles Cassar
    Chetcuti Cauchi Advocates
    Malta Financial Services Lawyer