Reference is made to the "Consultation document relating to creation of a proposed Conduct of Business Rulebook" (Ref.04/2015) which was issued by the MFSA for consultation on 6th May 2015. This consultation procedure follows the previous consultation undertaken by the MFSA regarding the "Proposed Conduct of Business Rules for the Enhanced Protection of Customers in Investment Services" (Ref.03/2014) which was issued by the MFSA for consultation on 27th January 2014.
As indicated in the consultation procedure in relation to the proposed Conduct of Business Rulebook, the Rulebook is addressed to persons licensed under the Investment Services Act (excluding custodians) and to persons carrying on insurance activities in terms of the Insurance Business Act or the Insurance Intermediaries Act (insurance undertakings and insurance intermediaries), and individuals who work with or advise such entities, as well as persons licensed as credit institutions under the Banking which sell or advise clients in relation to structured deposits, where applicable. The Rulebook is aimed at setting out the regulatory requirements of regulated persons insofar as their conduct vis-à-vis their clients is concerned.
The proposed Conduct of Business Rulebook will deal with a number of matters, namely the following:
- Client Disclosures and Reporting
- Product Governance
- Conflicts of Interest
- Selling Process and Practices
- Contractual Agreement with Retail Clients
- Execution of clients' orders
- Governance of Regulated persons
The consultation procedure in relation to the proposed Conduct of Business Rulebook will take place over two phases. Through the issuance of the consultation document on 6 May 2015, the MFSA has entered into the first phase of this consultation procedure which tackles the first three topics:
- Client Disclosures and Reporting;
- Product Governance; and
- Conflicts of Interest.
This consultation document is aimed at obtaining the industry's views on the regulatory approaches which the MFSA is proposing to adopt in relation to specific areas as well as any comments or feedback in relation to the above-mentioned three topics. The second consultation document addressing the remaining topics, will also be issued by the MFSA in due course.
The attention of the industry is drawn to the deadline for submission of feedback which was originally set to 13 June 2015. In this respect, the Authority wishes to advise that the period of consultation has been extended to 10 July 2015. In this respect, interested parties are kindly requested to submit any comments which they may have in relation to these proposed amendments, in writing, on csu@mfsa.com.mt.
Furthermore, the MFSA also wishes to inform the industry that in June it shall be organising an Industry Update for industry players in order to provide further guidance and clarifications as may be required. Further details in relation to this Industry Update will be announced in due course. Industry players are strongly encouraged to provide their feedback to this consultation document within the stipulated timeframe.
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.
