As the Virtual Financial Assets Bill is coming gradually into fruition, the Malta Financial Services Authority (MFSA), has issued a Consultation with the financial services industry with regards to the VFA regulations to be issued under the final act.
This particular consultation is aimed at providing more granularity, specifically with respect to exemptions, fees and control of assets. The Legal Notice also provides for administrative penalties for failure to comply with the provisions of the Regulations.
Regarding the MFSA fees, and as described in the Regulation, any person upon submission of a whitepaper for registration or upon submission of an application for the granting of a registration, a licence or any other kind of authorisation, irrespective of whether the whitepaper is registered or whether the application is eventually accepted or not, shall pay to the Malta Financial Services Authoritythe respective fee as established in the Second Column of the table at the end of the article.
Furthermore, once the license is granted, a supervisory fee will be paid annually to the MFSA. The first annual supervisory fee shall be due immediately upon the granting of the licence and will be proportionate to the period remaining between the date of the granting of the licence and the established date for the submission of the annual audited financial statements. All supervisory fees are depicted in the Second Column of the aforementioned table.
Additionally, a person applying for a licence will be classified at the discretion of the MFSA into one of the four categories which determine the requirements of licence holders.
The categories will be as follows:
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.
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.
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.
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.
It is quite clear from the categorization, that, the bigger the class, the bigger rights and responsibilities are attributed to the entities vis-à-vis their clients. For instance, a simple consulting entity with no interest in controlling the clients’ money or investing for the own account is categorized in VFAA Class 1.
At the other end of the spectrum, Class 4 entities, not only can proceed in VFA exchanges on behalf of their clients, they also get to hold and control their client’s private cryptographic keys.
It’s important to take note that the application and supervisory fees are adjusted accordingly, depending on the VFAA Class (please see table).
You should also bear in mind that none of the fees established and due shall be refundable or prorated.
|REGULATIONS 5 & 6 FEES|
|Application/Notification Fee||Supervisory Fee|
|Whitepaper Registration||4,000||1,000 upon the submission of the certificate of compliance|
|Appointed in terms of article 7 or the Act||5,000||5,000|
|Appointed in terms of article 14 or the Act||5,000||5,000|
|Appointed in terms of both articles 7 & 14 or the Act||7,500||7,500|
|VFAA Class 1||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||5,000||For revenue up to €250,000||4,500|
|Further tranches of €50,000 up to a maximum of €5,000,000||400 per tranche or part thereof|
|VFAA Class 3||7,000||For revenue up to €250,000||6,000|
|Further tranches of €50,000 up to a maximum of €50,000,000||400 per tranche or part thereof|
|VFAA Class 4||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|