On the 15th of January, the Malta Financial Services Authority (MFSA) published a ‘Circular to Issuers of Virtual Financial Assets’ which provides an update to the circular of the same name which was issued by the Authority last December. This document, amongst other things, stated that the Authority has finalised the Financial Instrument Test and has made it available on their website.

Online Registration Form for Whitepapers

The MFSA has also made possible the online registration of whitepapers through the Whitepaper Registration Form that has been made available on the Authority’s website. The term ‘VFA Agent’ has been defined within the circular as being a person who has either “registered as a VFA Agent in accordance with Article 7 of the [Virtual Financial Assets] Act; or has submitted an application for registration as a VFA Agent in accordance with Article 7 of the Act, provided that such person shall have at least three proposed Designated Persons who have successfully completed a course approved by the Authority.”

Publication of Final version of the Financial Instrument Test

The final version of the MFSA’s Financial Instrument Test (FIT) was also published. This test sets out to determine whether a Distributed Ledger Technology (DLT) Asset is a Virtual Token (VT), a Virtual Financial Asset (VFA), electronic money or a financial instrument. This determination then sets forth the regulatory regime that is applicable to the DLT Asset.

A point of note is that within the new FIT, there has been a restructuring of the format of the questions. A DLT Asset whose standard is capable of being converted into another DLT Asset can now be classified as a virtual token as long as it is technically prevented from so doing.

The MFSA have stated that a guidance note concerning the updated FIT is expected to follow shortly.

Additions to the Glossary of Terms

Aside from the updates to the FIT and the online Whitepaper Registration Form, the MFSA has also announced within the circular that it has added a number of definitions to the Glossary of Terms that can be found on their website. The terms included are: Admission to Trading on a DLT Exchange; Auditor; Board of Administration; Connected Person; Cyber Security Framework; Experienced Investor; Functionary; Offer of virtual financial assets to the Public; Parent Undertaking; Public Sector Issuer; Regulated Information; Related Parties; Restricted Person; Substantial Unitholder; and Systems Auditor.

Systems Auditors

Issuers with Innovative Technology Arrangements in place must necessarily appoint and have at all times engaged, a systems auditor that has met all of the competence recognition criteria set out in the Systems Auditor Guidelines as issued by the Malta Digital Innovation Authority (MDIA), but this person need not be registered with the MDIA for the time being.