MFSA and legal updates July 2019

Malta Financial Services Authority (MFSA)

Brexit Update in case of a No-deal Brexit: the MFSA has issued an update to its first circular dated 28 March 2019 in relation to the Temporary Permission Regime for UK Investment Funds, Asset Managers, and Investment Firms passporting to Malta.

MFSA is currently drafting legislation to regulate the UK Entities in such a no-deal Brexit scenario. The Temporary Permission Regime shall be applicable to any UK Entity (i.e. Investment funds, Asset Managers, and Investment Firms) which satisfy a pre-determined list of conditions.

Additionally, it is MFSA’s intention that the Temporary Permission Regime would remain applicable until 31 March 2020. As from 1 April 2020 the UK Entities would be treated as Third Country Firms, unless they opt to either (i) terminate the contract, (ii) obtain the relevant authorisation by 31 March 2020, or (iii) assign the existing contracts.

Legal Notices

1. Legal Notice 158 of 2019 - Companies Act (Register of Beneficial Owners) The law has been updated. The beneficial owner list shall be retained by the Malta Business Registry (MBR) for a period of 5 years after the company has been struck off from the MBR register. Additionally, the MBR has the right to check the information provided and if it finds that the officers did not provide correct information or update the information regarding the UBOs, and MBR deems it necessary to update the beneficial ownership information, then the officers shall be liable to a penalty of €10,000.
2. Legal Notice 159 of 2019 - Income Tax Act (European Union Tax Dispute Resolution Mechanisms Directive Implementation Regulations). The regulation shall become applicable from 1^st July 2019 and shall apply to any complaint submitted on or after 1^st July 2019 if dispute in question relates to the income or capital earned in or after the year immediately preceding the YA2019.  The law implements the EU Directive 2017/1852 of 10 October 2017.  The mechanism has been implemented to assist with resolving disputes between Malta and other Member States when such disputes arise from the interpretation and application of agreements and conventions that provide for the elimination of double taxation of income, and where applicable, capital. The law also provides for the rights and obligations of those persons duly affected when such disputes arise. Complaints are to be filed to the Commissioner, following which the Commissioner shall be required to acknowledge due receipt within 2 months, with a subsequent decision (whether to accept or reject) on the complaint to be provided within 6 months from receipt of the complaint or the receipt of the relevant additional information duly requested whichever is later.   Complaints may be withdrawn. The Subsidiary Legislation has not been updated as yet.