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MALTATODAY 4 April 2021

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2 maltatoday | SUNDAY • 4 APRIL 2021 NEWS Delivery fee of just €1 per day for orders up to 5 newspapers per address To subscribe 1. Email us your choice of newspapers, recipient's name, address, contact number to production 2. Forward cheques payable to Miller Distributors Ltd on address: Miller House, Airport Way, Tarxien Road, Luqa LQA1814 Queries on other news- papers and magazines, production@ maltatoday Same-day delivery of your favourite Sunday newspaper Monday-Friday MaltaToday Midweek • €1 BusinessToday • €1.50 Sunday MaltaToday • €1.95 ILLUM • €1.25 Support your favourite newspaper with a subscription MATTHEW VELLA AN army of warranted profes- sionals in Malta – accountants, auditors, lawyers and notaries – are balking at new rules re- moving their exemption from onerous authorisation by the financial regulator (MFSA) to act as company officers. The pressure on Malta to tighten up its corporate gov- ernance rules by the Council of Europe's Moneyval, will mean warranted professionals must be authorised before accepting directorships on companies or providing the services of com- pany secretary. The reform will mean that any warranted accountant or accountancy firm carrying out corporate services "by way of business", will be subjected to a market entry or licensing requirement. Previously, war- ranted accountants and firms were exempted on the basis of their warranted status and the fact that the accountancy pro- fession is regulated by an inde- pendent body, the Accountancy Board. This major change also applies to the legal profession, as lawyers were also exempted prior to the reform. "It is a laborious process, it in- creases our expenses, and forc- es upon us new obligations in terms of compliance and risk," one financial services practi- tioner who renders his services to a multitude of companies, told MaltaToday. The rules were introduced in November 2020, with a six- month transitory period for new CSPs. "CSPs previously had to pres- ent their returns to the Finan- cial Intelligence Analysis Unit – now they have to be licenced by the MFSA for company for- mation services or to act as di- rectors, and that means being subject to further MFSA com- pliance. For those not with- in the orbit of Big Four com- panies, or who work out of a simple office, it means cutting down on business," the experi- enced CSP told MaltaToday. The heftiest changes will come with the ongoing obli- gations of authorised entities, where such registered CSPs will have to provide disaster recov- ery procedures; insurance re- quirements; risk management obligations; an annual compli- ance monitoring progamme; record-keeping obligations and other money laundering re- porting obligations. The new CSP Rulebook will impose a maximum adminis- trative penalty of up to €50,000 for breach of a rule, without re- course to a court of law. "In our view a consultation process was also required in respect of the definition or in- terpretation of 'by way of busi- ness, which did not take place possibly due to the deadline of implementing the framework by 16 March," said Fabio Axisa on behalf of the Malta Institute of Accountants. "This concept will determine which account- ants will be subjected to market entry requirements and which won't, so it is quite fundamen- tal," he told MaltaToday. Accountants whose CSP in- come falls under a certain threshold will be subjected to a lighter regulatory frame- work, but the MIA and other stakeholders think such 'un- der-threshold' professionals should be exempt from market entry and regulatory require- ments. "They pose less risk to the system," Axisa said. "Of course, it is the prerog- ative of the MFSA to imple- ment the frameworks deemed fit and considered necessary to achieve Moneyval related ob- jectives. We respect that and we supported that to the best of our abilities. But considering the MIA's membership base of 3,700 individuals ranging from sole practitioners to individ- uals acting as partners within the larger firms, I have to make the case for our profession," he said. Axisa points out that war- ranted accountants are already regulated by the Accountancy Board. Additionally, CSP ser- vices are a natural extension of their profession, being the most suited to take up the po- sition of directors or company secretaries. "I am sure this is equally applicable for the legal profession," he says. Additionally, accountants are Lawyers, accountants face tougher rules, higher costs to act as company directors

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