Fintech

Malta on the Verge of Regulating Security Tokens

Malta’s vision to create the first truly tailor-made legal framework for Distributed Ledger Technology (“DLT”) assets and investment was established with the Malta Digital Innovation Authority (“MDIA”) Act, the Innovative Technology Arrangements and Services (“ITAS”) Act, and the Virtual Financial Assets (“VFA”) Act, which came into law in 2018. The Malta’s financial services regulator, the Malta Financial Services Authority (“MFSA”) has now started the process to implement the next step in Malta’s drive to become the leading DLT jurisdiction in the world. To this end, in mid-July, the MFSA released its  policy on Security Token Offerings (“STO”) to consult with the views of stakeholders on this new policy, and to receive their feedback on the same. The consultation document states that the proposed STO policy complements the VFA regime to continue supporting innovative technology while ensuring investor protection and without compromising financial stability and integrity.

The proposed STO policy proposal is a sound and responsible further step on Malta’s journey to become the premier DLT jurisdiction in the world. While eschewing the temptation to regulate untested and experimental forms of native digital securities, it is putting into place yet another part of the infrastructure that will give Malta the experience and expertise to integrate further developments seamlessly into its DLT legislative framework. Feedback is solicited from all interested parties for the duration of the consultation process, which concludes on 30 August 2019. Feedback to the MFSA may be sent to: capitalmarkets@mfsa.com.mt.

Zeta is a group of companies that specializes in financial and corporate services. It has long experience with securities and securitization, and has received MFSA approval and authorization as a VFA Agent under the VFA Act. Zeta is therefore in a prime position to assist any potential issuers of STOs in meeting their objective. For more information on how we can be of help, please contact us on: techfin@zeta-financial.com.