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Increased Investment Sharpens Enforcement Interventions – MFSA

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This year, the Authority has, to date, issued a number of enforcement actions ranging from the imposition of administrative penalties, licence cancellations, disqualifications of individuals and other restrictions or directives.

More recently, during the months of August and September, three administrative penalties have been issued. An administrative penalty of €15,000 was imposed against ARQ Fiduciaries Ltd for failing to submit the declaration of beneficial ownership for trusts which generated tax consequences. A second penalty of €5,000 was imposed on JD Capital plc for failure to adhere to its obligation of submitting the updated List of Insiders to the MFSA within the established timeframes as required under the provisions of the Market Abuse Regulation. Thirdly, a penalty of €150,000 was imposed on Dennis Muscat for providing investment services without a licence on a regular and habitual basis. Concurrently, Mr Muscat was directed to cease the activity of introducing investment services clients to locally licensed investment firms for a period of ten years from the date of the Authority’s decision.

Two other entities had their licences withdrawn due to weak governance structures and internal controls and breaches of licence conditions, namely, AYN Limited and Corporate & Commercial FX Services Limited With the removal of its licence, Corporate & Commercial FX Services Limited has also been obliged to return, within a period indicated by the MFSA, the client funds it held.

The failure to adhere to Standard Licence Conditions and other conditional requirements has also brought about the cancellation of the collective investment services licences which had been granted to Novium Opportunity Umbrella SICAV plc and Excellence Investment Umbrella SICAV plc as well as their respective sub-funds.

The Authority has also taken action to disqualify three individuals from undertaking authorised positions in financial services, all of which related to the failure to meet the fitness and properness criteria on a continuing basis. John Anthony Farrell, Alexander Mangion and Melvyn Mangion have all been prohibited for a period of ten years from acting in any capacity, as approved persons with any entity licensed or otherwise authorised by the Authority, or to be personally licensed, authorised, enrolled, registered or otherwise approved by the Authority.

Another directive was issued against MPM Capital Investments Limited subsequent to the cancellation of its licence. With the assistance of an inspector appointed by the MFSA, the company has been ordered to transfer its investment services business and the remaining clients’ holdings, on the basis of a number of identified deficiencies, such as the provision of payment services without the required licence and the failure to openly cooperate with the Authority.

On account of recent developments, the MFSA has also issued directives against BTI Management Limited and BT International Limited because the MFSA considered that they are not in a position to continue servicing their clients. BTI Management and BT International Limited have been ordered  to refrain from onboarding new clients and providing existing clients with any new or additional services until such time the MFSA is assured of the companies’ ability to satisfy applicable legal requirements on an on-going basis.

The MFSA’s commitment to increase its organisational capacity and operational efficiency has been supported by substantial investment in human resources, training and educational activities, capacity building and modern technologies. Coupled with the recent enhancements made to the Enforcement process, MFSA officials have been better equipped to take more efficient and effective Enforcement actions, as can be seen from the Supervisory and Enforcement Dashboard being updated on a monthly basis. Check it out!

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Regulator Information

Abbreviation: MFSA
Jurisdiction: Malta

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