MFSA Proposed Enhancements to the CSP Framework

The Malta Financial Services Authority (MFSA) has released a consultation document proposing enhancements to the Company Service Providers (CSPs) Framework. The document, dated 1st November 2024, is part of the MFSA’s ongoing efforts to strengthen the financial system and mitigate money laundering and terrorist financing (ML/TF) risks.

CSPs play a pivotal role in Malta’s financial system. They are often the first point of contact for individuals seeking to establish a business in Malta. The proposed enhancements aim to further strengthen the regulatory framework applicable to individuals who provide directorship/company secretary services.

Introduction of a Notification Requirement

This requirement is aimed at individuals who are providing directorship and/or company secretarial services but are not doing so ‘by way of business’, and fall within certain criteria to be prescribed by the Authority. These individuals would not be required to seek authorisation or registration but would be required to notify the Authority of the fact that they hold solely these involvements.

Introduction of a Registration Requirement

A new category of CSPs, known as ‘Registered Persons’, is proposed. This category will consist of individuals acting, or holding themselves out as acting, ‘by way of business’ to third parties, who provide directorship and/or company secretarial services to companies up to a maximum of 10 involvements.

Increase in the Number of Involvements of Class B Under Threshold CSPs

The number of involvements for Class B Under Threshold CSPs will be increased from a maximum of 10 involvements to a maximum of 20 involvements. For those individuals who wish to hold more than 20 involvements as director/company secretary, a full authorisation as a Class B CSP would be required.

Streamlining of Regulatory Submissions

The MFSA proposes a more consolidated and efficient way for collecting data from these ‘Registered CSPs’, with a single yearly return to be filed for both MFSA and FIAU purposes.

A specific rulebook for Registered Persons is proposed to be created, which will establish the requirements and obligations of such persons. The MFSA is seeking stakeholders’ views on these proposals. The consultation period for feedback is 15 November 2024. For more details please refer to the Consultation Document.