Malta IVFAO Application Process

The application process consists of three phases: i) preparatory phase; ii) pre-licensing phase; and iii) post-licensing phase:

Preparatory Phase

Appointment of functionaries, and fitness and properness assessment

The first step to apply for a VFA Service Provider License is to appoint the necessary functionaries:

• a VFA Agent who is to be the point of contact between the VFA Service Provider, as an Applicant and the MFSA
• Systems Auditor or IT Auditor, as necessary, to draw up an Audit Report to be submitted to the MFSA at application stage
• Compliance Officer
• Money Laundering Reporting Officer
• Auditor. Moreover, designated persons, including directors, senior management, qualifying shareholders and ultimate beneficial owners must undertake a fitness and properness assessment

Setting up of the Malta entity and adherence to requirements

The Malta Entity is established at an early stage of the application process. Furthermore, the Applicant shall also ensure that the requirements set forth in the Regulations and Rulebook are adhered to.

Completion of the financial instrument test, preparation of statement of intent and notification to the MFSA

The Financial Instrument Test will need to be undertaken to ensure that the service being provided relates to a Virtual Financial Asset. Once this is done, a Statement of Intent is prepared, by virtue of which the VFA Agent notifies the MFSA of the Application. The Statement of Intent must include a comprehensive written description of the proposed structure, the VFA Services being applied for identifying the Key Persons, and a legal opinion that the proposed activity does not fall within the scope of traditional financial services legislation, and that opines on the nature of the VFA Services being offered under the relevant License Category being applied for and on the nature of the VFA.

Setting up of meeting with MFSA and payment of fees

Upon receipt of the Statement of Intent, the MFSA schedules a mandatory preliminary meeting with the Applicant, who shall by not later than 60 days from the date of the meeting, submit the application form and any supporting documentation as specified therein. Applicants must also pay the non-refundable application fee to the MFSA as per the VFA regulations.

Pre-Licensing Phase

Review of the application and ‘in principle approval’

Upon submission of the complete application, the MFSA shall initiate the review of the application and supporting documentation. Once the MFSA is satisfied with the application and the fitness and properness assessment is completed, the MFSA issues an ‘In Principle Approval’ valid for three months from the date of issue.

Finalisation of the application process

During the ‘In Principle Approval’ period, the Applicant shall finalise any outstanding issues raised during the application process, finalise any pre-licensing conditions as determined by the MFSA in the in-principle approval and submit the original copies of the final application form together with all supporting documentation. Upon satisfaction of the above, a VFA Services License shall be issued by the MFSA.

Post-Licensing Phase

Satisfaction of post-licensing matters

License holders may be required to satisfy a number of post-licensing matters as required by the MFSA prior to commencement of business. If one fails to satisfy the matters in a set timeframe, the MFSA may vary or revoke any condition of a License as well as impose new conditions and shall have the power to cancel the License granted to a VFA Service Provider. The License Holder shall commence its VFA Services business within twelve months of the date of issue of the VFA Service.

Contact Rudolph Psaila to find out more.