The regulatory treatment of bitcoin and other virtual currencies in Malta

We're increasingly seeing interest from businesses operating in the bitcoin / virtual currencies space looking to establish operations in Malta. We feel there is a lack of useful Malta-specific information on this topic, and we've therefore put up a detailed article on the topic on our website. You can read more by following the link below:

Bitcoin and Virtual Currencies in Malta

One interesting phenomenon that we have noted is the keenness of many operators to run their businesses in-line with well established regulatory best practice principles, even though bitcoin is strictly speaking neither fiat money nor a financial instrument and therefore not yet regulated under Maltese law. Having said that, in light of all the attention (both positive as well as negative) that virtual currencies have been attracting, it is only a matter of time before regulators issue rules governing the sector, and therefore it makes sense for serious operators to be prepared.

Dr Charles Cassar
Chetcuti Cauchi Advocates, Malta Law Firm

Malta Business Network (Malta Ltd) - Launch

On the 2nd October 2013, the Malta Business Network (Malta) Ltd will be launched.

The Malta Business Network's goals are the following:

• to promote business and professional opportunities in, or connected with, Malta by re-enforcing and expanding the existing good relations between members of the business and professional communities in Malta and the United Kingdom
• to promote the exchange of information and knowledge between members of the business and professional communities in Malta and the United Kingdom and to explore how they may work together on business and professional opportunities, projects and transactions in other countries and territories and
• to provide social and academic functions for members and guests of the Association

You can find more details regarding the launch event here, where you can also register:

http://mbnmaltalaunch.eventbrite.co.uk/

You can learn more about the Malta Business Network here:

http://www.maltabusinessnetwork.com/

Our firm is proud to have assisted the Network with various aspects of its Malta set-up, and we're more than happy to recommend the network to all professionals and entrepreneurs. 

If you have any questions, get in touch!

Dr Charles Cassar

Chetcuti Cauchi Advocates, Malta Law Firm

Binary Options in Malta

Binary Options and their status as MiFID Instruments: A closer look

We've realized there is a lack of useful information available with respect to the recent developments regarding the treatment of binary options as MiFID instruments. Many are now aware of MFSA's recent announcement, but there is much to be discussed and absorbed, and there are exciting opportunities both for entrepreneurs as well as for Malta as a jurisdiction. We've put up a detailed publication on our website focusing on binary options in Malta, this should be useful for anyone who is interested in learning more about the recent developments and their potential implications.

Get in touch if you would like to discuss Malta Binary Options in further detail.

MFSA Issues Binary Options Circular

The fledgling binary options industry in Malta has received an important boost as the MFSA has issued a circular providing that binary options fall to be regulated under the Markets in Financial Instruments Directive. The development is expect to drive binary options business to the jurisdiction, as the increased legal clarity and potential passporting opportunities will inevitably make Malta a more attractive domicile for such business.

You can read more about  about the circular here:

Binary Options in Malta

As always, get in touch if you would like to discuss binary options in further detail.

Charles Cassar,
Chetcuti Cauchi Advocates, Malta law firm

Setting up an AIFM / AIF in Malta

The MFSA in Malta is now accepting applications for the set-up  of AIF and AIFMD. In this context, we've put together a comprehensive set of resources of anyone looking to set up an AIFM or AIF in Malta.

You can find the relevant materials on our website:

• Malta AIFM FAQs
• How does passporting work under AIFMD?
• How will AIFMD impact Malta? (an old publication, but still largely relevant)
• Malta AIFMD Compliance Services
• MFSA launches AIFM application process

Charles Cassar

Chetcuti Cauchi Advocates, Malta

European Commission’s Report for Malta: Malta and Cyprus: A Sea Apart (2013)

On the 10th of April 2013 the European Commission circulated its conclusions on Malta’s financial position in a report issued in accordance with Article 5 of Regulation (EU) No 1176/2011 on the Prevention and Correction of Macroeconomic Imbalances (the ‘Commission Malta Report 2013’).The exercise commenced last year after an Alert Mechanism Report in November (the ‘Alert Mechanism Report’) was issued, which Report showed signs of potential macroeconomic imbalances in 13 States, including Malta.

The latest happenings in Cyprus have generated a whole new set of questions related to ‘which country will follow suit’. Public attention has been drawn to other small eurozone nations with considerable banking sectors, since, in the event of a crisis, such countries could be more exposed to depositor/senior unsecured creditor bail-in. Malta has also been placed under the lens of scrutiny mainly due to its geographical location and relatively sizable banking industry when compared to its GDP.

Malta has now been declared by the European Commission as not having excessive fiscal imbalances. The imbalances that were found were deemed to emanate from the way the economy of the country is structured. Malta is one out of the thirteen countries assessed and is one of the eleven countries which have been declared as not having excessive fiscal imbalances. All this has now been further corroborated by Bloomberg Brief and Fitch Ratings in specific reports issued on the island’s financial position in April 2013.

The Commission adds that “the majority of the very large financial sector is internationally-oriented with very little link to the domestic economy, and therefore does not pose large risks for domestic stability.”

Having said that, despite the positivity of the Commission Malta Report 2013, room for improvement was still highlighted. The Commission Malta Report 2013 provides that potential imbalances for Malta in the financial sector are in particular related to its exposure to the real estate market.

Malta should take these suggestions / remarks on board and work on streamlining these key issues.

Amongst the various key findings, the Commission Malta Report 2013 concludes that “the Maltese economy demonstrated resilience throughout the crisis”. This could be attributed to the domestic macroeconomic circumstances, which have remained supportive of financial stability, and cautious banking methods characterized by healthy solvency and liquidity positions. These factors have jointly ensured that Malta remained resistant to the negative consequences which hit a number of other euro area jurisdictions over the past year. Therefore “Comparisons between Cyprus and Malta continue to appear misplaced” with even the European Commission issuing “a clean bill of health” to the Maltese banking system.

More detailed info at A Review of the 2013 European Commission s Report for Malta (MCC)

Alternative Investment Fund Managers Directive: Frequently Asked Questions

After what seems like an eternity of proposals and counter-proposals, the Alternative Investment Fund Managers Directive is finally due to come into force. In the run up to the big day, we've been getting an increasing number of queries from fund managers, service providers and fund directors with respect to various aspects of the directive. We've therefore put up a detailed FAQ page on our website. The FAQs deal with various key questions such as:

• Which entities fall within the scope of the directive?
• What are the directive's provisions on valuation?
• Will Malta's PIF regime be retained post-AIFMD?
• Are there any limits to the use of leverage?
• What are the regulatory reporting requirements under the directive?

We'll be updating this soon with more useful information, so check in from time to time.

You will find the FAQs here:

http://www.ccmalta.com/publications/malta_aifm_faqs

Dr Charles Cassar

Chetcuti Cauchi Advocates, Malta Funds Law Firm