Operators in the trustee sector may be familiar with the
restrictions contained in the Trusts and Trustees Act (Cap.331 of
the Laws of Malta, "TTA") that the MFSA have interpreted
as obliging authorised trustees (and fiduciary mandataries and
administrators of private foundations) to only offer CSP services
to persons to whom trustee services are being offered and not,
therefore, to persons that are not also the recipients of trustee
services. This was the result of an interpretation of the relevant
provisions dealing with the regulatory requirements for trustees,
fiduciary mandataries and administrators requiring them to:
Only carry on activities ancillary or incidental to the main
services, and to not have objects which are not compatible with
such an activity; and
To actually conduct activities that are compatible and
connected with the main services provided (paras (a) and (b) of
articles 43(4)(i), 43(13)(i) and 43(15)(i) of the TTA).
The interpretation gave rise to a reality that presented severe
difficulties for those trustee companies that either did not have a
separate CSP company within the group or which, following the
enactment of the Company Service Providers Act (Cap. 529 of the
Laws of Malta), actually liquidated their separate CSP company in
view of the exemption that the CSP Act contemplates for trustee
companies already authorised by the MFSA.
Although the proposed amendments to the TTA that would seemingly
relax the restrictions and finally formally allow trustee companies
to provide CSP services across the board, even to persons who are
not also recipients of trustee services, have not been enacted, the
consultation document issued by the MFSA on the 30th December, 2016
(and closing, following an extension, on the 15th February, 2017)
proposing the repeal of the Code of Conduct for Trustees and other
Fiduciaries and its replacement with a 'Rule Book' for
trustees and other fiduciaries, has shed some light on the
direction that the MFSA is likely to have taken on this matter and,
in fact, includes 2 whole sections (largely lifted from the CSP
Rules) in section 5 of the proposed rules, dealing with the
provision of company formation services by trustees and the
provision of director services by trustee companies. In them, the
MFSA refers to a proviso to the above-mentioned provisions (that
currently does not feature in the TTA) and which one can only
assume to constitute the solution to this practical problem. One
will, of course, have to await the actual enactment of the amending
act, but at least the inclusion in the proposed Rulebook for
trustees and other fiduciaries of rules regulating the provision of
corporate services by such authorised persons is very positive.
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