Issue link: https://maltatoday.uberflip.com/i/1179052
24.10.19 15 BUSINESS LAWYERS, accountants, and notaries providing assistance to financial ser- vices firms will have to register with the Malta Financial Services Authori- ty under proposed new rules. The MFSA is proposing to remove the exemption from registration for legal professionals and accountants as it tries to raise the bar for company service providers. The proposal is one of several made by the authority in a consultation doc- ument released on Tuesday, targeting companies that offer their services to firms seeking authorisation from the MFSA. The rationale behind the proposed regulations is to ensure a more robust first line of defence against problem- atic operators. The requirement to have all provid- ers register with the MFSA is partly in response to concerns raised by Mon- eyval in its damning report on Malta released last month. The regulator is also proposing a three-tier classification for company service providers that will define what services they are able to offer. No such classification exists and any lawyer or accountant who today acts on behalf of a client requires no form of authorisation from the MFSA. The authority is also proposing that the current notification requirement for persons having a licence or regis- tration to provide company services be converted to a full authorisation. The rules propose that prospective applicants for authorisation would be required to engage a CSP in order to proceed with their application. Persons wishing to be authorised as CSPs will be required to do so as a company, the rules are proposing. This is a necessity given the onerous requirements related to controls and effective financial crime compliance, and other regulatory pressures, the MFSA said. Service providers will be obliged to appoint two designated persons or more, depending on the company size, to act as directors, company secretar- ies, or serve as a partner in partner- ships, on behalf of their clients. The MFSA is proposing enhancing the competence assessments for des- ignated persons, and other officials such as money laundering risk officers and compliance officers. The new rules will introduce a thor- ough scrutiny by the MFSA of client on-boarding systems and processes adopted by CSPs. Service providers will be required to conduct "a fitness and properness as- sessment" on prospective clients seek- ing their service prior to on-boarding. A requirement to inform the MFSA where any person fails such a fitness and properness assessment would also be introduced in order to ensure that the "first line of defence is not circumvented through forum shop- ping". The MFSA is also proposing substan- tial increases in capital requirements for commercial partnerships and nat- ural persons that will range between €30,000 and €150,000 from the cur- rent levels of €2,500 and €5,000. The MFSA said that a proposal from the industry for a self-regulated su- pervisory model was not considered a viable option given the strict demands of the anti-money laundering direc- tive. The consultation process is open un- til 22 November 2019 and the MFSA is receiving feedback on email CSP- framework@mfsa.mt. Lawyers, accountants will have to register with the regulator to handle financial services companies The Malta Financial Services Authority has released a public consultation document intended to raise the bar for company service providers e Malta Financial Services Authority has just published a consultation document proposing more onerous regulations for company service providers