The Authority recognises the need to grant additional time to existent operators in order to satisfy the said requirement. In this regard, and with reference to entities: i. operating under the transitory provision in terms of Article 62 of the VFA Act and wishing to continue providing VFA Services following the expiry of the transitory period – the requirement to have such a Live Audit Log in place shall be imposed as a post-licensing condition.
Compliance Certificate
The contents of the Compliance Certificate will be predominantly based on the Compliance Monitoring Plan carried out by the entity s CO. Compliance Certificates shall now include:
i. the outcome of the CO s Compliance Monitoring Plan, including a list of breaches identified thereof;
ii. a confirmation that all the local AML/CFT requirements have been satisfied, which should be obtained from the LH s MLRO; and
iii. a list of Clients against which disciplinary action has been taken by the LH along with a brief description of the breach, and the actions taken by the LH.
Furthermore, the Authority highlighted that R3-3.2.3.14, which sets out additional requirements in relation to the Compliance Certificate, applicable to Class 4 LHs, has been removed.
Cybersecurity
R3-3.1.2.1.8 required that LHs establish a cybersecurity framework, comprising a number of policies and plans. Following an internal review, it was noted that the rule was too prescriptive, and it has therefore been amended. The rule has been reworded such that LHs are now required to ensure that their cybersecurity architecture is in line with inter alia any cybersecurity guidelines issued by the Authority. As a result of the amendment, R3-3.1.2.1.9 has been removed.
Matters requiring Approval
Pursuant to the current Rulebook, LHs are obliged to obtain the written consent of the MFSA before inter alia engaging any persons, whether Administrators, Senior Managers or other employees, who are engaged in portfolio management activities or the provision of investment advice. The said requirement for written consent in the event of occurrence of [a] above has been amended so that this shall only require the MFSA s prior notification. This notwithstanding, the Authority may, at its discretion, object to the proposed engagement.
Exercising a European Right
The section pertaining to the exercise of a European Right has been renamed Provision of VFA Services in Other Jurisdictions. LHs shall also be required to maintain a list of countries in which they are providing, or holding themselves out as providing, their services. Furthermore, following amendments to R3-2.3.4.3.3, LHs wishing to provide, or hold themselves out to provide VFA services in other jurisdictions, will no longer be required to obtain a legal opinion from a lawyer in such other jurisdiction. The Authority wishes to highlight that the LH shall be responsible for ensuring that the provision/marketing of its services is in conformity with the laws of such other jurisdiction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
