In a move aimed at streamlining regulatory processes, the Malta Financial Services Authority (MFSA) announced significant changes to the Rulebook for Company Service Providers (CSP Rulebook), effective January 23, 2024. The amendments, detailed in Circular 23 January 2024 addressed to Company Service Providers [such as Papilio Services Limited, are entities that provide corporate services by way of business, including but not limited to company registration in Malta, mergers and acquisitions, or business relocation to Malta (company re-domiciliation), through to back-office support and administration services such as directorship and company secretary services and the provision of registered office, business support, or correspondence addresses for businesses, even recruitment, helping businesses large or small, from start-ups to international enterprises, across a range of sectors] introduce modifications impacting regulatory submissions due in 2024 and beyond. Notably, authorised CSPs will witness a reduction in standalone documentation submissions as the MFSA endeavours to simplify procedures.

Key Changes in Regulatory Submissions:

  1. Annual Self-Declaration and Certificate of Compliance: Under Threshold Class A and B CSPs will no longer need to submit an Annual Self-Declaration or Certificate of Compliance separately. Instead, this information will be integrated into the updated Annual Compliance Return (ACR).
  2. Statement of Solvency and Annual Financial Return: Individual CSPs no longer have to submit a Statement of Solvency or an Annual Financial Return. The ACR will now incorporate data previously collected through these documents.
  3. Financial Information for Partnerships: Partnerships operating as CSPs will see alterations in submission requirements. Warranted civil partnerships acting as Under Threshold Class A CSPs will not need to submit Audited Financial Statements, with financial data now included in the ACR. Other partnerships must submit Annual Income Statements, Balance Sheets, and explanatory notes within four months after their financial year-end.
  4. Timing of Submissions: All CSPs must submit the ACR and accompanying documents annually through the License Holder portal. Deadlines vary based on the CSP type, with legal person CSPs required to submit within four months after the financial year-end and individual CSPs by the end of April.

Other Amendments to the CSP Rulebook:

Apart from changes in regulatory submissions, the CSP Rulebook underwent further modifications:

  1. Evaluation of Internal Controls: CSPs now need to evaluate the adequacy and effectiveness of their systems and internal controls annually, rather than every six months.
  2. Voluntary Cancellation Process: The process for voluntary cancellation of CSP authorisation has been clarified to address practicalities and align with existing practices.
  3. Notification Requirement for Address Use: CSPs must inform the Authority if they intend to use an address different from their registered one for client services.
  4. Reporting Breaches: Breaches of regulations must be reported in the appropriate field of the ACR, with failure to submit the ACR considered a breach.
  5. Removal of Notification Requirement for Late Submission: CSPs no longer need to notify the Authority of late submissions, aligning with MFSA's Policy Document on Non-Material Enforcement Actio

The Malta Financial Services Authority (MFSA) declared on February 19, 2024, that the updated Annual Compliance Return (or "ACR") template is currently accessible on the MFSA website.

Conclusion:

The changes introduced by the MFSA aim to simplify regulatory procedures for CSPs, aligning with industry standards and enhancing efficiency. These modifications reflect the Authority's commitment to fostering a conducive environment for business operations while ensuring compliance with regulatory standards. Streamlining regulatory processes for CSPs can contribute to greater efficiency in business operations and make the jurisdiction even more appealing to foreign investors and companies seeking a favourable regulatory environment, i.e. with company registration in Malta. This, in turn, can stimulate foreign direct investment (FDI) and promote economic growth. While the changes aim to simplify procedures, they are also designed to ensure that Malta maintains robust regulatory standards. By integrating certain documentation requirements into the updated Annual Compliance Return (ACR), the Malta Financial Services Authority (MFSA) can continue to monitor and supervise CSPs effectively. This helps to safeguard the integrity of Malta's financial and corporate services sector, enhancing trust and confidence among investors and stakeholders.

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