MFSA’s rules for Virtual Financial Assets Agents


The Malta Financial Services Authority (MFSA) is currently preparing the rules underpinning and substantiating the Virtual Financial Assets (VFA) Act and the VFA Regulations. These rules will provide further guidelines and regulations to operators int is field of financial services. The MFSA is working on the introduction of a rulebook with the title of “Virtual Financial Assets Rulebook”. This rule book will be subdivided in to the following three chapters:

Chapter 1 - Virtual Financial Assets Rules for VFA Agents

Chapter 2 - Virtual Financial Assets Rules for Issuers of Virtual Financial Assets

Chapter 3 - Virtual Financial Assets Rules for VFA Service Provider

Around the end of July 2018, the MFSA released a consultation document to obtain industry feedback on chapter one of the proposed rulebook. For this reason the proposals outlined in this consultation document are not final and are subject to change depending on the feedback.

Apart from a statement on scope and principles, the consultation document  is divided into three main parts, outlining in turn the requirements for issuers,  another one overseeing initial VFA offerings and trading on DLT exchanges and final one concerned with enforcement and sanctions.

The general requirements for Issuers were set out as follows:

  • An issuer must be a legal person formed under any law in force in Malta.
  • The Issuer must have a board of administration to ensure that the issuer complies with its obligations under the rules and guidelines issued by the MFSA.
  • It is incumbent upon the board to act honestly and in good faith in the interests of the issuer and investors, and it is expected to show exercise reasonable care, skill, and diligience and conform to the standards of ethical behaviour.
  • An issuer must also appoint  and have in place at all the times the following functionaries: a systems auditor, a VFA agent, an auditor, and a money-laundering reporting officer.
  • An issuer also needs to ensure a cyber-security framework and keep adequate documentation.

The rules overseeing initial VFA offerings and trading on DLT exchanges reaffirm the principle that no issuer shall offer VFA to the public in or from within Malta, or apply for their admission to trading on DLT exchange without drawing up a whitepaper which complies with the requirements of the VFA act and is regiserest with the MFSA in accordance with the VFA act. If an issuer wants to issue VFA offerings or do so and apply for their admission to trading on a DLT exchange, the issuer shall submit through its VFA agent, the whitepaper, the copy of the Financial Instrument Test, confirmation from the Systems Auditor tha tthe technology arrangements are compliant with the MDIA’s standards, a copy of the issuer’s audited annual accounts for the last three financial years, and consolidated accounts for the same time period of the group if the issuer forms part of such group, a certified copy of the its constitutional document, and the applicable registration fee.

The consultation period for this document closes on 13 August 2018.