MiCA

The Malta Financial Services Authority (“MFSA”) has issued a circular announcing immediate updates to the Markets in Crypto-Assets (“MiCA”) Rulebook and Chapter 3 of the Financial Institutions Rulebook (FIR/03). These changes align Malta’s regulatory framework with the latest technical standards and supervisory guidance issued by the European Securities and Markets Authority (“ESMA”) and the European Banking Authority (“EBA”), which are collectively, together with the European Insurance and Occupational Pensions Authority (“EIOPA”) are referred to as the European Supervisory Authorities (“ESAs”).

Key updates to the MiCA Rulebook include reference to the following guidelines and requirements to ensure their applicability in relation to the submission and assessment of authorisation applications for Crypto-Asset Service Providers (CASPs) and white paper notifications, as applicable:

• The Joint ESA’s Guidelines on templates for explanations and opinions, and the standardised test for the classification of crypto-assets, and the ESMA Guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments;
• The Joint EBA and ESMA Guidelines on the assessment of the suitability of the members of the management body of issuers of asset-referenced tokens and of CASPs when conducting the fit and proper assessment on qualifying holders, beneficial owners, members of the Board, senior managers, MLRO, Compliance Officer and any other person which the MFSA may deem necessary;
• The ESMA Guidelines on the maintenance of systems and security access protocols under MiCA, which supplements Article 14(1) of MiCA. This is applicable to issuers or other persons wishing to notify an ‘other crypto-asset’ whitepaper;
• The ESMA Guidelines on supervisory practices for competent authorities to prevent and detect market abuse; and
• The requirement to submit the MFSA’s Limited Network Exclusion Form in the case of offerors or persons availing themselves of the exemption under Article 4(3)(d) of MiCA where an offer of ‘other crypto-assets’ only refers to crypto-assets where the holder has the right to use it only in exchange for goods and services in a limited network of merchants with contractual arrangements with the offeror.

Additionally, the Financial Institutions Rulebook (FIR/03) has been amended to provide clearer notification instructions to electronic money institutions (“EMIs”) issuing e-money tokens which may wish to provide the service of custody and administration of crypto-assets and crypto-asset transfer services on behalf of clients.

The implementation of these updates helps bring greater legal clarity and consistency for market participants operating in Malta, particularly as MiCA’s publication was followed up with a large number of Regulatory Technical Standards, Implementing Technical Standards and Guidelines by the ESAs. The MFSA’s experience in the crypto-asset sector helps ensure that CASPs and crypto-asset issuers benefit from more predictable regulatory expectations, backed by regulatory experience in the sector, while also respecting important principles of strong internal governance, security infrastructure, and fitness and properness. These updates mark another step in Malta’s ongoing efforts to align with EU-wide standards while fostering a stable and credible environment for crypto-asset innovation.

For information or assistance please contact us at info@gtg.com.mt

Author: Dr Cherise Abela Grech