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Regulatory Action against Ariadne Capital Malta Limited – MFSA

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On 11 June 2020, the Malta Financial Services Authority (“MFSA” or “Authority”) cancelled, on regulatory grounds, the Alternative Investment Fund Manager Licence of Ariadne Capital Malta Limited (“the Company” or “ACML”).

The Authority had suspended the Company’s licence in May 2018, after ACML was found to be in breach of the following Standard Licence Conditions of Part BIII of the Investment Services Rules for Investment Services Providers (“the Rules”), as set out hereunder:

[i] SLC 1.14 of Part BIII of the Rules – ACML failed to cooperate with the MFSA in an open and transparent manner and to supply the MFSA with the required documentation and information;

[ii] SLC 1.16 of the Part BIII of the Rules – ACML was not effectively directed and managed by at least two individuals;

[iii] SLC 1.17 of the Part BIII of the Rules – ACML did not notify the MFSA of the departure of directors and senior officials;

[iv] SLC 1.27 and 1.28 of the Part BIII of the Rules – ACML did not establish and maintain a compliance function and had been without a Compliance Officer since 3 January 2018;

[v] SLC 2.01 of the Part BIII of the Rules – ACML does not have adequate human and technical resources to manage Alternative Investment Funds;

[vi] SLC 2.04 of the Part BIII of the Rules- ACML had been without a permanent, functional and separate risk management function since 5 February 2016;

[vii] SLC 11.13 of the Part BIII of the Rules – ACML did not appoint a compliance officer as from 3 January 2018 for the NAIF, even though it is the Company’s responsibility as its AIFM to have a compliance function in place; and

[viii] SLC 11.26 of the Part BIII of the Rules – ACML did not appoint an MLRO as from 2 November 2017 for the NAIF, even though it is the Company’s responsibility as its AIFM to have an MLRO function in place.

Further to the suspension of the licence, the Company did not rectify the abovementioned breaches. In addition, the Company was found to be in breach of SLC 1.10 of the Part BIII of the Rules since ACML failed to commence its business since obtaining its licence on 31 July 2017.

The Authority has taken this decision in terms of the powers under Article 7(2)(a), (b), (d) and (e) of the Investment Services Act.

This notice is being published as part of the Authority’s standard enforcement policy and in terms of Article 25(1) of the Investment Services Act and Article 16(8) of the Malta Financial Services Authority Act.

It should be noted that the MFSA’s decision to cancel the Company’s Alternative Investment Fund Manager licence shall not become operative until the expiration of the period within which an appeal can be filed, as stipulated in Article 19 of the Investment Services Act or as otherwise determined by Law, and if an appeal is made within such period, the decision shall become operative on the date of the decision of the Tribunal dismissing the appeal or the date on which the appeal is abandoned.

Regulator Information

Abbreviation: MFSA
Jurisdiction: Malta

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