Administrative Measures and Penalties Archive

Date

Entity

Subject
23/12/2019Portmann Capital Management LimitedOn the 23 December 2019, the Malta Financial Services Authority (“MFSA”) revised the Directive of the 22 August 2018 issued to Portmann Capital Management Limited (“Portmann”), a company holding a Category 2 investment services licence, whereby it was directed, with immediate effect, to:

(a) cease the on-boarding of new clients; and
(b) cease any outgoing transactions from all clients’ accounts held by Portmann. This restriction shall also apply to intra client accounts.

The MFSA has taken this decision in terms of the powers granted to it under Article 6(2)(a) and Article 15 of the Investment Services Act.

On 20 September 2018, Portmann Capital Management Limited had submitted an appeal before the Financial Services Tribunal against the MFSA’s decision of 22 August 2018. The appeal is still on-going.

On the 23 December 2019 the MFSA has decided that whilst maintaining both afore-mentioned restrictions in place, it has directed Portmann to address and implement remediation measures in view of serious internal control and governance weaknesses.

Portmann has been granted a maximum period of one (1) year to implement all these remediation measures.
The Authority has therefore decided that the above restrictions shall be maintained in full force until the afore-mentioned remediation measures are implemented, in part or in full, by the Company to the satisfaction of the Authority, at which point in time the Authority will consider the variation or withdrawal thereof. Should the Company fail to implement such remediation measures within the stipulated timeframe, the Authority will consider what other regulatory action may be warranted in the circumstances

This Directive was not appealed before the Financial Services Tribunal within thirty (30) days from the date of notification.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8)
of the Malta Financial Services Authority Act.
22/11/2019Mr Adrian PaceOn 22nd November 2019, the Malta Financial Services Authority (“MFSA”) decided to impose an administrative penalty of eight thousand Euro (€8,000) on Mr Adrian Pace for breach of article 33(1) of the Insurance Distribution Act (Cap. 487). The MFSA has concluded that Mr Pace carried out tied insurance intermediary activities for classes of business for which he was not authorized.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act (Cap. 330).
18/11/2019E&S Consultancy LimitedOn 18th November 2019, the Malta Financial Services Authority (“MFSA”) has taken the following regulatory action against E&S Consultancy Limited (“the Company”):

In terms of article 6(1)(a)(b) and (e) of the Company Service Providers Act (Cap. 529 of the Laws of Malta), the MFSA has decided to cancel the Company’s registration granted to it under article 5 of the Company Service Providers Act, for breaches of articles 5(1)(a), 5(7) and 6(1)(a) of the Company Service Providers Act, and Rules 5, 13.04(e), 13.04(f), 16.06, 17.03 and 17.07 of the Rules for Company Services Providers;

In terms of article 6(3) of the Company Service Providers Act, a Company whose registration has been cancelled shall, within sixty days from the date of cancellation of registration, ensure that the services it has been providing to companies or other legal persons in terms of its registration are transferred to another person which is duly registered in terms of this Act;

Further to the above obligation set out in the law and in terms of article 11(1) of the Company Service Providers Act, the Company is directed to provide, from the date of the cancellation of the registration, bi-weekly updates to the Authority with respect to the transfer of business which is to be carried out in terms of article 6(3) of the CSP Act.

In terms of article 21(17) of the Malta Financial Services Authority Act, the MFSA’s decision to cancel the Company’s registration shall not become operative until the expiration of the period within which an appeal lies under article 21 of the Malta Financial Services Authority Act and, if an appeal is made within such period, the said decision shall become operative on the date of the decision of the Financial Services Tribunal dismissing the appeal or the date on which the appeal is abandoned.

Update: On 17th December 2019, E&S Consultancy Limited filed an appeal before the Financial Services Tribunal against the MFSA’s decision of 18th November 2019.
16/05/2019Money+Card Payment Institution LtdOn the 15th May 2019, the Malta Financial Services Authority (“MFSA”) has decided to restrict the licence of Money+Card Payment Institution Ltd (“the Institution”), in terms of article 6(4) (c) and (d) of the Financial Institutions Act, as follows:

The Institution and all its officials or any connected persons or related persons thereto, whether direct or indirect, henceforth and until further notice, are to refrain, cease and desist, with immediate effect, from undertaking any activity for which they have been licenced in terms of the Financial Institutions Act. The Institution shall obtain the Authority’s prior written approval before effecting any other transactions related to the payment of salaries and essential services.

This restriction is immediately applicable and shall remain operative until the Authority directs otherwise, including if the Institution, for whatever reason, ceases to hold a licence.

This notice is being published in terms of article 6(8) of the Financial Institutions Act and article 16(8) of the Malta Financial Services Authority and as part of the MFSA’s standard enforcement policy.

Updated 9 August 2019

Reference is made to the Malta Financial Services Authority’s (‘the Authority’) Media Release concerning Money+Card Payment Institution Ltd (‘the Institution’) dated 15 May 2019, whereby it was notified that the Authority restricted the licence of the Institution, in terms of Article 6(4) (c) and (d) of the Financial Institutions Act (‘the Act’). The restriction imposed was based on the following grounds:

[i] the Institution no longer possesses sufficient own funds to cover the minimum required by law; and
[ii] the Institution, due to the deficiencies at management and Board level, no longer meets its governance requirements in terms of Article 5(1)(d) of the Financial Institutions Act.

Further to the above, on 10 June 2019, the Authority notified the Institution that after due consideration, given that the serious circumstances of the Institution subsisted, the following regulatory action was taken:

[i] require the institution to wind up its business in accordance with the Authority’s power in terms of Article 17(1)(e) of the Act;
[ii] direct the institution to take all the necessary steps to pass an extraordinary resolution for the dissolution and consequential members’ voluntary winding up of the Institution in terms of Article 16(2)(b) of the Malta Financial Services Act , including the appointment of the liquidator to be chosen from a list of persons provided by the Authority.

Upon appointment of Dr Louis Cassar Pullicino as the liquidator, the Authority has on 09 August 2019:

[i]removed the restrictions imposed on the institution in terms of Article 6(5) of the Act insofar as this is required for the liquidator to perform the duties necessary` for the winding-up of the business;
[ii] withdrawn the licence issued to the Institution in terms of Article 6(1) of the Act.

It should be noted that, in terms of Article 21(17) of the Malta Financial Services Authority Act, the Authority’s decision to cancel the Financial Institution’s licence shall not become operative until the expiration of the period within which an appeal can be filed, 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.

This notice is being published in terms of Article 6(8) of the Financial Institutions Act and Article 16(8) of the Malta Financial Services Authority Act and as part of the MFSA’s standard enforcement policy.
06/05/2019Signature Opportunities Fund SICAV plcOn 06 May 2019, the Malta Financial Services Authority (“MFSA” or “Authority”) cancelled, on regulatory grounds, the Collective Investment Scheme Licence of Signature Opportunities Fund SICAV plc (“the Scheme”), including the Licence granted to its only Sub-Fund, namely Eden Rock Fund, with immediate effect.

In addition to the Scheme’s failure to satisfactorily address a number of post-licencing conditions which needed to be addressed prior to the commencement of any business, the Scheme was found to be in breach of the following article of the Investment Services Act (“ISA”) and Standard Licence Conditions (“SLC”) of Part BIII of the Investment Services Rules for Professional Investor Funds (“the Rules”):

(i) Article 13(1) of ISA - Failure to cooperate with the MFSA and to furnish information and documents to MFSA as required;
(ii) SLC 1.64 of Part BIII of the Rules - Failure to submit the Audited Financial Statements of the Scheme
(iii) SLC 1.5 of Part BIII of the Rules - Failure to appoint an Investment Manager
(iv) SLCs 1.22 and 1.28 of Part BIll of the Rules - Failure to appoint a Compliance Officer and a Money Laundering Reporting Officer (MLRO);
(v) SLC 1.65 of Part BIll of the PIE Rules - Failure to settle Supervisory Fees

The Authority has taken this decision in terms of the powers under Article 7(3)(b) of the Investment Services Act. This notice is being published in terms of the powers vested in the Authority under the provisions of the Malta Financial Services Authority Act.

It should be noted that the MFSA decision to cancel the Scheme’s collective investment scheme licence shall not become operative until the expiration of the period within which an appeal can be filed, 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.
29/04/2019Mare Nostrum Melita LimitedOn the 25th of April 2019, the Malta Financial Services Authority (“MFSA”) has taken the following regulatory action against Mare Nostrum Melita Limited (“the Company”):

[i] In terms of article 46(b) of the Trusts and Trustees Act, the MFSA has decided to cancel the Company’s authorisation, granted to it under article 43 of the Trusts and Trustees Act (Cap. 331 of the Laws of Malta), for breaches of article 43(13)(i)(c), 43(13)(i)(f) and 43(14) of the Trusts and Trustees Act, paragraphs 5.0, 6.0, 9.4, 9.6 and 11 of the Code of Conduct for Trustees and Regulation 4(1) of the Trusts and Trustees Act (Fees) Regulations (L.N. 356 of 2008, S.L. 331.01); and

[ii] In terms of article 51(7) of the Trusts and Trustees Act, the MFSA has decided to impose on the Company an administrative penalty amounting to eight thousand Euros (EUR 8,000), for the infringements of the above mentioned Articles of the Trusts and Trustees Act, Code of Conduct and Trusts and Trustees Act (Fees) Regulations.

In terms of article 21(17) of the Malta Financial Services Authority Act a decision to cancel the licence shall not become operative until the expiration of the period within which an appeal lies under this article 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.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
12/03/2019Doyen Sports Investments LimitedOn 7 March 2019, the Malta Financial Services Authority (“MFSA”) decided to impose an administrative penalty of twenty three thousand Euros (EUR 23,000) on Doyen Sports Investments Limited (“the Company”) in terms of Article 23(1) of the Financial Institutions Act Cap. 376 (‘FIA’) and the Fines and Penalties for Offences Regulations (S.L. 376.02) for having breached Article 3(1) of the FIA.

The MFSA has concluded that the Company has carried out lending activities as set out in paragraph 1 of the First Schedule of the FIA, without having the necessary licence. Consequently, the Authority considers the Company to have acted in breach of Article 3(1) of the FIA.

The Company did not appeal the decision of the Authority before the Financial Services Tribunal within thirty (30) days from the date of notification of the decision.
18/12/2018NOVUM BANK LIMITEDOn 16 November 2018, the Malta Financial Services Authority ("the Authority") decided to impose an administrative penalty on Novum Bank Limited of eighty thousand and five hundred Euro (€80,500) after the bank was found to be in breach of Article 11(2) of the Banking Act and of Regulation 10 of the European Passport Rights for Credit Institutions Regulations. The administrative penalty was imposed by the Authority in terms of the powers granted under Article 35A(1)(c) of the Banking Act and Regulation 4(1) and (2) of the Administrative Penalties, Measures and Investigatory Powers Regulations (S.L.371.05).

The bank had 30 days from the notification date to appeal to the Financial Services Tribunal. However, no such appeal was filed by the bank.

This Notice is being published in terms of the powers vested in the Authority under Article 35B of the Banking Act.
12/12/2018Novium AG Investment SolutionsOn 12 December 2018, the Malta Financial Services Authority issued a directive to Novium AG Investment Solutions (“the Company”), a company domiciled in Switzerland and supervised by the Swiss self-regulatory organisation Verein zur Qualitätssicherung. The Company was previously the appointed Investment Manager of Novium Opportunity Umbrella SICAV plc, Excellence Investment Umbrella SICAV plc and Public Private Real Estate Funds SICAV plc in terms of an exemption laid down in Regulation 3(1)(h)(ii) of the Investment Services Act (Exemptions) Regulations.

By means of the directive, the Authority hereby prohibits the Company from:

(a) undertaking any investment services activity in terms of the Investment Services Act for a period of four (4) years applicable from 12 December 2018; and

(b) operating under any exemption permitted in terms of the Investment Services Act (Exemptions) Regulations for a period of four (4) years applicable from 12 December 2018.

The MFSA has taken this decision in terms of the powers granted to it under Article 15 of the Investment Services Act.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act.

UPDATE

The Authority’s decision was appealed before the Financial Services Tribunal within the period established by law.
05/11/2018PILATUS BANK PLCPublic Notice regarding Pilatus Bank

Further to the Authority’s proposal to the European Central Bank (ECB) to withdraw the authorisation of Pilatus Bank as a credit institution, the ECB’s Governing Council has decided to withdraw the authorisation of Pilatus Bank with effect from today.

The Competent Person remains in control of Pilatus Bank in terms of the Banking Act as communicated in Public Statement 03/2018 dated 2 April 2018. All of the regulatory measures taken in relation to the bank remain in full force and applicable until further notice by the Authority.

Further information may be obtained by accessing the Authority’s webpage www.mfsa.mt.

Any communication in relation to Pilatus Bank should be addressed to the bank on 356 2779 9999 or the Authority on contact number Freephone 80074924.
20/10/2018SATABANK P.L.C.Public Notice Concerning Satabank plc

This notice is being issued with respect to Satabank p.l.c., (“the Bank”) holding a credit institution licence in terms of the Banking Act (Chapter 371 of the Laws of Malta) (“the Banking Act”), having registration number C66993 and operating from Aragon Business Centre, Level 3, Dragonara Road, St. Julians STJ 3140.

The Authority is hereby notifying the public that, pursuant to the Authority’s powers in terms of Article 9 and 4B of the Banking Act, Satabank plc has been directed as follows:

i. to refrain, cease and desist from taking further deposits into accounts of its current customers, (this includes the acceptance of any payment in any account of a customer held with the Bank);

ii. to refrain, cease and desist from accepting any new customers;

iii. to refrain, cease and desist from affecting or processing any withdrawal or outward transfers from any accounts held by the Bank;

iv. to refrain from effecting any transfer, sale, placement or any other movements of the Bank’s or the customers’ assets;

v. to retain and preserve all records, data and documents relating to its business and its clients, including those on the Bank’s IT systems and networks whether in Malta or in any other jurisdiction, as well as any other documentation which relates in any way, whether directly or indirectly, to the business of the Bank;

vi. to ensure that all such records, data and documents, in whatever form and however stored, are kept safe and not altered, destroyed, erased, concealed or disposed of in any manner; and

vii. to ensure that all such records, data and documents, in whatever form and however stored, are accessible at any time to the Authority and/or to any person appointed by the Authority in terms of law.

The Authority has also upgraded the appointment of the Competent Person EY (Ernst & Young) from an appointment in terms of article 29(1) (b) of the Banking Act (as communicated under the MFSA Public Notice dated 15th October 2018) to an appointment in terms of Article 29 (1) (c) and (d) of the same Act to conduct the following:

i. take charge of the assets of the Bank for the purpose of safeguarding the interests of depositors;

ii. assume control of the Bank’s business and to carry on such functions as the Authority may direct.

The above regulatory measures have been issued with immediate effect and shall remain in place until the Authority directs otherwise. The Authority shall be closely monitoring any developments which may ensue in relation to the Bank, which could justify the maintenance, variation or withdrawal thereof.

Any communication in relation to the Bank should be addressed to the Bank on the following number (+356) 2247 7999 or 2247 7900 or email: [email protected]

UPDATE

The Authority’s directives and decision were partially appealed before the Financial Services Tribunal within the period established by law.
15/10/2018SATABANK P.L.C.Public Notice Concerning Satabank plc

This notice is being issued with respect to Satabank p.l.c. (“the Bank”) holding a credit institution licence in terms of the Banking Act (Chapter 371 of the Laws of Malta) hereinafter ‘the Banking Act’, with registration number C66993 and operating from Aragon Business Centre, Level 3, Dragonara Road, St Julians STJ 3140.

Pursuant to its powers in terms of Article 29(1)(b) of the Banking Act, the MFSA has appointed Ernst and Young Ltd (EY) as a competent person to advise and monitor the Bank in the proper conduct of its business. This measure has been taken in order to ensure good governance and controls and the implementation of remedial measures in line with the MFSA’s supervisory requirements as mandated by law. The bank continues to meet its financial prudential requirements.

This regulatory measure shall remain in force until such time as the MFSA shall otherwise direct and shall be without prejudice to any further regulatory action.

Any communication in relation to the Bank should be addressed (to the Bank) on the following number +356 2247 7900 or email [email protected].
01/10/2018Christopher Zahra On 1 October 2018, the Malta Financial Services Authority struck-off the name of Mr Christopher Zahra from the Tied Insurance Intermediaries List, in terms of Article 40(3) of the Insurance Distribution Act (Cap 487) for failure to comply with the requirements of paragraph 7 of Insurance Intermediaries Rule 7 of 2007 – Code of Insurance Selling Practice. Mr Zahra was enrolled to carry out tied insurance intermediaries activities in the long term business classes I and III for an on behalf of GlobalCapital Life Insurance Limited.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act (Cap. 330).
This decision may be appealed before the Financial Services Tribunal within thirty days from the date of this notice.
22/08/2018 PORTMANN CAPITAL MANAGEMENT LIMITEDOn 22 August 2018, the Malta Financial Services Authority (“MFSA”) issued a directive to Portmann Capital Management Limited (“Portmann”), a company holding a Category 2 investment services licence, whereby it was directed, with immediate effect, to:

(a) cease the on-boarding of new clients; and

(b) cease any outgoing transactions from all clients’ accounts held by Portmann. This restriction shall also apply to intra client accounts.

The MFSA has taken this decision in terms of the powers granted to it under Article 6(2)(a) and Article 15 of the Investment Services Act.

This directive may be appealed before the Financial Services Tribunal within thirty (30) days from the date of notification of the directive.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act

Update on 24 September 2018

On 20 September 2018, Portmann Capital Management Limited submitted an appeal before the Financial Services Tribunal against the MFSA’s decision of 22 August 2018.
14/08/2018PORTMANN CAPITAL MANAGEMENT LIMITEDOn 14 August 2018, the Malta Financial Services Authority (“MFSA”) has imposed an administrative penalty of sixty two thousand, eight hundred ninety three Euros and seventy three cents (€62,893.73) on Portmann Capital Management Limited (“the Company”) in terms of Article 23(1) of the Financial Institutions Act Cap. 376 (‘FIA’) and the Fines and Penalties for Offences Regulations (S.L. 376.02) for having breached Article 3(1) of the FIA.
The MFSA has concluded that the Company has provided payment services, as defined in the Second Schedule to the FIA, without having the necessary licence. Consequently, the Authority considers the Company to have acted in breach of Article 3(1) of the FIA.

The Company may appeal the decision of the Authority before the Financial Services Tribunal within thirty (30) days from the date of notification of the decision.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.

Updated on 14 September 2018

On 13 September 2018, Portmann Capital Management Limited submitted an appeal before the Financial Services Tribunal against the MFSA’s decision of the 14 August 2018 to impose an administrative penalty for breach of article 3(1) of the Financial Institutions Act (Cap.376).
24/07/2018APC Travel Bureau LtdOn 24 July 2018, the Malta Financial Services Authority struck-off the name of APC Travel Bureau Limited (Enrolment. number C16100) from the Tied Insurance Intermediaries List, in terms of Article 40(2) of the Insurance Intermediaries Act (Cap 487) for failure to comply with the requirements of Article 38(1) of the said Act and the requirements of Insurance Intermediaries Rule 7 of 2007.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act (Cap. 330).
This decision may be appealed before the Financial Services Tribunal within thirty days from the date of this notice.
06/07/2018SATABANK P.L.C.On 4 July 2018, the Malta Financial Services Authority (“the Authority”) issued a decision to impose an administrative penalty of sixty thousand and five hundred euro (€60,500) on the bank in view of the breach of article 17B(1) of the Banking Act transposing Article 74 of Directive 2013/36/EU, as well as rule 5(a) and the second sub-paragraph of rule 5(e) set out in Annex 2B of Banking Rule 12 of 2014 entitled “The Supervisory Review Process” of Credit Institutions Authorised under the Banking Act 1994.

The bank may appeal the decision of the Authority before the Financial Services Tribunal within 30 days from the date of notification of the decision.

This Notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
30/05/2018ARIADNE CAPITAL ECO2 VC LIMITED PARTNERSHIPOn 30 May 2018, the Malta Financial Services Authority (‘the Authority’) decided to remove Ariadne Capital ECO2 VC Limited Partnership (‘the Scheme’) and its four sub-funds: 2SQRS Venture Fund, ECO2 Fund, JGV Tamar Fund, and Sustainable Aviation Fund, from the list of Notified Alternative Investment Funds (‘NAIFs’). This action has been adopted in terms of the powers granted to the Authority under standard licence condition (‘SLC’) 11.11 of Part BIII of the Investment Services Rules for Investment Services Providers.

The Scheme was the subject of serious deficiencies in its governance structures and was not deemed to be in a position to operate as set out hereunder:

(i) The Scheme remained without an appointed Compliance Officer as required in terms of SLC 11.13 of Part BIII of the Rules since 03 January 2018; and

(ii) The Scheme failed to have a money laundering reporting function in place as required by SLC 11.26 of Part BIII of the Rules since 02 November 2017.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act. The MFSA’s decision may be appealed before the Financial Services Tribunal within thirty (30) days from the date of the MFSA’s communication.
11/05/2018ARIADNE CAPITAL MALTA LIMITEDOn 11 May 2018, the Malta Financial Services Authority (“MFSA” or “the Authority”) has suspended the licence of Ariadne Capital Malta Limited (“ACML”) with immediate effect in terms of the powers granted to it under Article 7(2) (a) (b) and (e) of the Investment Services Act.

The Company was found to be in breach of the 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 manner and to supply the MFSA with the requested information and documentation;

(ii) SLC 1.16 of Part BIII of the Rules: ACML was not effectively directed and managed by at least two individuals in line with the ‘dual control’ principle;

(iii) SLC 1.17(e) of 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 Part BIII of the Rules: ACML failed to establish and maintain a compliance function and was also without an appointed of Compliance Officer since 03 January 2018;

(v) SLC 2.01 of Part BIII of the Rules: ACML does not have adequate and appropriate human and technical resources to manage Alternative Investor Funds;

(vi) SLC 2.04 of Part BIII of the Rules: ACML was without a permanent, functionally and hierarchically separate risk management function since 05 February 2016;

(vii) SLC 11.13 of Part BIII of the Rules: The Compliance Function of a NAIF under the management ACML, namely Ariadne Capital ECO2 VC Limited Partnership was the responsibility of ACML as its AIFM. The Compliance Officer position remained vacant since 03 January 2018 as the Compliance Officer of ACML resigned from the position; and

(viii) SLC 11.26 of Part BIII of the Rules: Following the resignation of the MLRO of ACML with effect from 02 November 2017, the position of MLRO of the NAIF under its management, which was appointed in view of ACML’s role as AIFM, remained vacant.

ACML was also not acting in line with the Terms of Reference of the Investment Committee adopted on 15 November 2017. The Investment Committee has not been properly constituted following the resignation of a number of members of the Investment Committee. The Investment Committee is consequently unable to function properly due to the inability to attain a quorum.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act. The MFSA’s decision may be appealed before the Financial Services Tribunal within thirty (30) days from the date of the MFSA’s communication.
11/05/2018CONFIANCE MALTA LIMITEDOn 10th May 2018, the Malta Financial Services Authority (“MFSA”) has taken the following regulatory action against Confiance Malta Limited (“the Company”):

[i] In terms of article 46(b) of the Trusts and Trustees Act, the MFSA has decided to cancel the Company’s authorisation, granted to it under article 43 of the Trusts and Trustees Act (Cap. 331 of the Laws of Malta), for breaches of article 21(1), 21(4)(a), 43(4)(i)(c), 43(4)(i)(d), 43(4)(i)(f), 43(5) and 47(1) of the Trusts and Trustees Act (Cap. 331 of the Laws of Malta), paragraphs 5.0, 6.0, 9.4, 9.6, 8.0 and 11 of the Code of Conduct for Trustees, Article 4(1) of the Trusts and Trustees Act (Fees) Regulations (L.N. 356 of 2008, S.L. 331.01) and Article 16(6)(a) of the Malta Financial Services Authority Act (Cap. 330 of the Laws of Malta); and

[ii] In terms of article 51(7) of the Trusts and Trustees Act, the MFSA has decided to impose on the Company an administrative penalty of sixteen thousand Euros (EUR 16,000), for the infringements of article 43(4)(i)(c) and 43(4)(i)(d) of the Trusts and Trustees Act.

In terms of article 21(17) of the Malta Financial Services Authority Act, the MFSA’s decision to cancel the Company’s authorisation shall not become operative until the expiration of the period within which an appeal lies under article 21 of the Malta Financial Services Authority Act and, if an appeal is made within such period, the said decision shall become operative on the date of the decision of the Financial Services Tribunal dismissing the appeal or the date on which the appeal is abandoned.

Furthermore, on 10th May 2018, the MFSA has taken the following regulatory action against Gareth O’Connell:

[i] In terms of article 48(2)(a) of the Trusts and Trustees Act, the MFSA has prohibited Gareth O’Connell from holding any new directorship, senior management and/or any roles, requiring the Authority’s approval, in any licensed entity authorised by the Authority for a period of two (2) years from the date of notification of the regulatory action taken by the MFSA against Gareth O’Connell, which is the 10th May 2018; and

[ii] In terms of article 48(2)(a) of the Trusts and Trustees Act, the MFSA has directed Gareth O’Connell to inform all entities licensed and/or otherwise supervised by the Authority in which he is currently approved by the Authority to perform any role, function or service whatsoever, of the regulatory action taken by the MFSA against him.

On the 10th May 2018, the MFSA has taken the following regulatory action against David Mason:

[i] In terms of article 48(2)(a) of the Trusts and Trustees Act, the MFSA has prohibited David Mason from holding any new directorship, senior management and/or any roles, requiring the Authority’s approval, in any licensed entity authorised by the Authority for a period of one (1) year from the date of notification of the regulatory action taken by the MFSA against David Mason, which is the 10th May 2018; and

[ii] In terms of article 48(2)(a) of the Trusts and Trustees Act, the MFSA has directed David Mason to inform all entities licensed and/or otherwise supervised by the Authority in which he is currently approved by the Authority to perform any role, function or service whatsoever, of the regulatory action taken by the MFSA against him.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
03/04/2018FERRATUM BANK P.L.C.On 28 March 2018, the Malta Financial Services Authority (“the Authority”) decided that the bank, between 18 July 2016 and 8 August 2016, breached the provisions of Article 17B. (1) and (2) of the Banking Act (Cap. 371 of the Laws of Malta), and the technical criteria on Governance Arrangements and Treatment of Risks specified in paragraphs 1(a)(i), 5(a), 8(a), 14(a), 14(b) and 15(a) of Annex 2B of Banking Rule 12 on The Supervisory Review Process Of Credit Institutions Authorised Under The Banking Act.

The Authority has imposed on the bank an administrative penalty of one hundred eighty-eight thousand, four hundred, and forty-five euros (€188,445).

The bank may appeal the decision of the Authority before the Financial Services Tribunal within 30 days from the date of notification.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act (Cap. 330 of the Laws of Malta), Article 35B of the Banking Act (Cap. 371 of the Laws of Malta), and Regulation 7(2)(a) of the Administrative Penalties, Measures and Investigatory Powers Regulations (S.L. 371.05).
02/04/2018INTREPID CAPITAL LTDOn 2 April 2018, the Malta Financial Services Authority (“MFSA” or “the Authority”) cancelled the investment services licence granted to Intrepid Capital Limited (“the Company”) in terms of Article 7(2)(b) and (d) of the Investment Services Act, Chapter 370.

In addition to the Company’s failure to satisfactorily address a number of post-licencing conditions which needed to be addressed prior to the commencement of any business, the Company was found to be in breach of the following Standard Licence Conditions (“SLC”) of Part BI of the Investment Services Rules for Investment Services Providers (“the Rules”) (applicable up to 2 January 2018):

i. SLC 1.01 failure to commence its Investment Services business within twelve months of the date of issue of the Investment Services Licence;

ii. SLC 1.21 and 1.22 in breach of establishing and maintaining a permanent and effective compliance function;

iii. SLC 7.29 failure to maintain the required Capital Resources Requirement; and

iv. SLC 7.48 for the failure to submit the Interim COREP Returns within the applicable deadlines and in the required manner.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.

It should be noted that the MFSA decision to cancel the Company’s investment services licence shall not become operative until the expiration of the period within which an appeal lies, 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.

Update on 3 May 2018

The Company did not submit a formal appeal with the Financial Services Tribunal by the stipulated timeframe, i.e. 2 May 2018 (thirty days from the date of notification to the Company of the said decision). Consequently, the regulatory action imposed on Intrepid Capital Limited is due to the Authority and the cancellation of the Company’s licence has become operative as at the aforementioned date, i.e. 2 May 2018.
21/03/2018PILATUS BANK PLCNotice to the Public concerning Mr Ali Sadr Hasheminejad and Pilatus Bank Limited

Pilatus Bank Limited, (“the Bank”) having registration number C-62995 and operating from Whitehall Mansions, Level 2, Ta’Xbiex Wharf, Ta’Xbiex XBX 1026, Malta and which holds a credit institution licence in terms of the Banking Act (Chapter 371 of the Laws of Malta), and an Investment Services licence in terms of the Investment Services Act (Chapter 370 of the Laws of Malta).

The Authority has determined to take the following actions concerning Mr Ali Sadr Hasheminejad:

1. In terms of Article 14(10) of the Banking Act the Authority has issued an order to remove Mr Ali Sadr Hasheminejad, with immediate effect, from the position of director of the Bank and any executive roles that he holds within the Bank.
2. In terms of Article 4B(1) of the Banking Act, the Authority has directed that with immediate effect Mr Ali Sadr Hasheminejad:
a. Suspends the exercise of his voting rights as shareholder of the Bank; and
b. Refrains from exercising the legal and judicial representation of the Bank.


The above measures have also been taken in terms of Article 15(1) and (2)(c) of the Investment Services Act (Cap 370).

In addition, in terms of Article 4B of the Banking Act and until notified further, the MFSA has directed Pilatus Bank Limited not to allow any banking transactions, including withdrawals or deposits held with the Bank by the shareholder, members of the Board of Directors and Senior Management officials of the Bank, or any connected persons or related persons thereto, whether direct or indirect.

The Bank has been further directed to obtain the MFSA’s prior approval before effecting any movement of the Bank’s assets.

The Authority is also considering other supervisory measures that may be applicable in the circumstances.


Notice to the Public concerning Mr Ali Sadr Hasheminejad and Pilatus Bank Limited

------------------------
Update:

Reference is made to the above Notice issued earlier today.

The Statement made reference to the issuance of a Directive in terms of Article 4B of the Banking Act (Cap 371) of the Laws of Malta, directing Pilatus Bank Limited (“the Bank”) not to allow any banking transactions, including withdrawals or deposits held with the Bank by the shareholder, members of the Board of Directors and Senior Management officials of the Bank, or any connected persons or related persons thereto, whether direct or indirect.

The Bank has been further directed to obtain the MFSA’s prior approval before effecting any movement of the Bank’s assets.
The MFSA clarifies that the content of the afore-said Directive as regards the relative scope stipulates that the Bank has been directed not to transact any business whatsoever irrespective of the client or the counterparty. The MFSA further clarifies that the afore-said Directive applies to all deposits and withdrawals and any disposal of the Bank’s assets.

The abovementioned directive was appealed before the Financial Services Tribunal within the period established by law.

---
Update 22/03/2018

Public Notice concerning Pilatus Bank Limited

This notice is being issued in respect of Pilatus Bank Limited (“the Bank”) having registration number C-62995 and operating from Whitehall Mansions, Level 2, Ta’ Xbiex Wharf, Ta’ Xbiex XBX 1026, Malta and which holds a licence to operate as a credit institution in terms of the Banking Act (Cap. 371 of the Laws of Malta) and an Investment Services Licence in terms of the Investment Services Act (Cap. 370 of the Laws of Malta).
The MFSA has today appointed Mr Lawrence Connell (bio attached) as a ‘Competent Person’ in terms of Article 29(1)(c)and(d) of the Banking Act and Article 15A(1)(b)and(c) of the Investment Services Act to:
(i) take charge of all the assets of Pilatus Bank Limited. In this case, reference to assets also includes any assets related to the investment services business of the Bank;

(ii) assume control of the Bank’s banking and investment services business and to continue carrying on that business until such time as the MFSA may direct.
The MFSA has also issued an additional Directive in terms of Article 15 (1) and (2) of the Investment Services Act and Article 16(2b) of the Malta Financial Services Authority Act (Cap. 330) directing the Bank not to dispose, liquidate, transfer or otherwise deal with clients’ assets and monies.

These measures shall remain in place until such time as the MFSA may direct otherwise.

This decision was appealed before the Financial Services Tribunal within the period established by law.
23/01/2018EXCELLENCE INVESTMENT UMBRELLA SICAV P.L.C.On 23 January 2018, the Malta Financial Services Authority issued a directive to Excellence Investment Umbrella SICAV plc (“EIUS”), a company licensed as a collective investment scheme targeting professional investors, whereby the Directors of EIUS were directed to:

(a) refrain from making any further use of any of the services offered to EIUS, either directly or through sub-delegation, by its Investment Manager, Novium AG Investment Solutions. Novium AG Investment Solutions is an Investment Manager domiciled in Switzerland, which is supervised by the Swiss self-regulatory organisation Verein zur Qualitätssicherung;

(b) at all times, have two Directors, acting jointly and on behalf of EIUS, as signatories in relation to EIUS’ bank accounts;

(c) take all the necessary steps for the dissolution and consequential winding up of EIUS in accordance with all applicable provisions at law, including the appointment of a liquidator; and

(d) until such time as a liquidator is appointed, they have to take charge of the safekeeping and management of EIUS’ assets.

The MFSA has taken this decision in terms of the powers granted to it under Article 15 of the Investment Services Act.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act.

This directive may be appealed before the Financial Services Tribunal within thirty (30) days from the date of notification of the directive.
12/12/2017MALTA CAPITAL MANAGEMENT LIMITEDOn 12 December 2017, the Malta Financial Services Authority (“the Authority”) suspended the Category 2 Investment Services Licence granted to Malta Capital Management Limited (“the Company”), the Investment Manager of MCM Global Opportunities Fund SICAV plc. The suspension will be applicable with immediate effect and will remain in force until such time as may be otherwise directed or decided by the Authority.

The Company was found to be in breach of:

(a) Standard Licence Condition (“SLC”) 8(a) in Section 1 of Part BIII of the Investment Services Rules for Investment Services Providers (“the Rules”), whereby the Company should notify the MFSA in writing and at least one month in advance, of a change in its business name;
(b) SLC 29 in Section 1 of Part BIII of the Rules, which requires the Company to act professionally in accordance with the best interests of its clients;
(c) SLC 35 in Section 1 of Part BIII of the Rules, which requires the Company to maintain financial resources sufficient for the proper performance of its functions. The Company should have sufficient financial resources at its disposal to enable it to conduct its business effectively and to meet its liabilities. SLC 35 then defines the applicable capital requirements regime;
(d) SLC 22 in Section 1 of Part BIII of the Rules, which requires the Company to have an appointed Compliance Officer;
(e) SLC 38 in Section 1 of Part BIII of the Rules which requires the Company to have an appointed Auditor; and
(f) SLC 40 in Section 1 of Part BIII of the Rules as the Company failed to submit the audited financial statements for the years ending 31 December 2015 and 31 December 2016 and the accompanying documentation required.

This regulatory action has been enforced in terms of Article 7(2)(b) of the Investment Services Act whilst this notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
28/11/2017NOVIUM OPPORTUNITY UMBRELLA SICAV P.L.C.On 28 November 2017, the Malta Financial Services Authority issued a directive to Novium Opportunity Umbrella SICAV plc (“NOUS”), a company licensed as a collective investment scheme targeting professional investors, whereby the Directors of NOUS were directed to:

(a) refrain from making any further use of any of the services offered to NOUS, either directly or through sub-delegation, by its Investment Manager, Novium AG Investment Solutions. Novium AG Investment Solutions is an Investment Manager domiciled in Switzerland, which is supervised by the Swiss self-regulatory organisation Verein zur Qualitätssicherung;

(b) at all times, have two Directors, acting jointly and on behalf of NOUS, as signatories in relation to NOUS’ bank accounts;

(c) take all the necessary steps for the dissolution and consequential winding up of NOUS in accordance with all applicable provisions at law, including the appointment of a liquidator; and

(d) until such time as a liquidator is appointed, they have to take charge of the safekeeping and management of NOUS’ assets.

The MFSA has taken this decision in terms of the powers granted to it under Article 15 of the Investment Services Act.

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act.
04/10/2017FALCON FUNDS SICAV p.l.c.On 3 October 2017, the Malta Financial Services Authority (“MFSA” or “the Authority”) has taken the following regulatory action against the Directors of Falcon Funds SICAV plc (“the Scheme”):

[i] issued a reprimand to each and all of the members of the current Board of Directors of the Scheme namely Mr Anthony Fenech, Mr Ian Zammit and Mr Joseph Xuereb in terms of Article 16(7) of the Malta Financial Services Authority Act; and

[ii] in terms of Article 16(2)(b) of the Malta Financial Services Authority Act and Article 15(2)(c) of the Investment Services Act prohibited the current Directors of the Scheme, namely Mr Anthony Fenech, Mr Ian Zammit and Mr Joseph Xuereb, from accepting any new appointments which require MFSA approval in entities or in relation to activities licensed and/or otherwise supervised by the MFSA for a period of two years from the date of communication of the Authority’s final decision; and

[iii] directed the current Directors of the Scheme, namely Mr Anthony Fenech, Mr Ian Zammit and Mr Joseph Xuereb to inform all entities licensed and/or otherwise supervised by the MFSA in which they are currently approved by the Authority as qualifying shareholders and/or approved by the Authority to perform any role, function or service whatsoever of the regulatory action taken by the MFSA.

The Directors of a scheme have specific duties and obligations at law to ensure and oversee the running of the Scheme and to ensure that the interests of the underlying investors are duly safeguarded and protected. The Authority evaluated the manner in which the Scheme operated as well as the level and quality of supervision of the Board of Directors of the Scheme over the last years.

The Scheme was found to be in breach of Article 15 of the Investment Services Act and the Standard Licence Conditions of Part BII of the Investment Services Rules for Retail Collective Investment Schemes, as set out hereunder:

- Article 15 of the Investment Services Act, which inter alia stipulates that “any person or scheme as is referred to in article 13(1) to whom or to which the notice is given shall obey, comply with and otherwise give effect to any such directive within the time and in the manner as stated in the directive”;

- SLC 15.7 of Part BII of the Investment Services Rules for Retail Collective Investment Schemes in that the Scheme failed to act honestly, fairly and with integrity in the best interests of its investors;

- SLC 2.01 and SLC 2.02 of Appendix VI of Part BII of the Investment Services Rules for Retail Collective Investment Schemes in that the Scheme failed to adopt adequate and effective arrangements, processes and techniques in order to measure and manage the risks that the Scheme was exposed to, failed to check that any internal risk limits established by the Investment Manager were being adhered to and also did not ensure that any remedial action to breaches of limits and UCITS eligibility was implemented in a timely manner and in the best interest of investors; and

- SLC 4.4(iii) of Part BII of the Investment Services Rules for Retail Collective Investment Schemes in that the Scheme failed to obtain a reliable valuation of the Scheme’s illiquid securities, nor did it ensure that this valuation was obtained by the Investment Manager on its behalf.

From the review of the modus operandi of the Directors of the Scheme, the MFSA determined that the Board failed in its primary responsibilities toward the Scheme and its investors.

The Directors of the Scheme were sitting on the board of a UCITS collective investment scheme which by its very nature attracts a high degree of investor protection given its accessibility to retail investors.

Whilst the Directors of the Scheme delegated a number of tasks to Temple Asset Management Limited (“the Investment Manager”), the Directors were still responsible to maintain the required adequate level of oversight on the Investment Manager: this required adequate level of oversight on the Investment Manager was not maintained. The Directors of the Scheme were expected to use their skills, competence and judgement to act in a responsible manner and with due diligence in the best interests of the Scheme and its underlying investors.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
17/08/2017CONFIANCE MALTA LIMITEDOn the 17th August 2017, the Malta Financial Services Authority (the “MFSA”) has, in terms of article 48 of the Trusts and Trustees Act (Cap. 331 of the Laws of Malta), directed that Confiance Malta Limited, a company authorised to act as trustee or co-trustee and provide other fiduciary services including acting as an administrator of private foundations in terms of article 43 of the Trusts and Trustees Act, commences, with immediate effect, the transfer of its business to another person authorised to provide trust and fiduciary services in terms of the Trusts and Trustees Act. Confiance Malta Limited has also been directed to report regularly to the MFSA on the progress being made on the transfer of its trusts and fiduciary business. Furthermore Confiance Malta Limited was directed to ensure that the safety and the integrity of its client files is preserved.

In the exercise of its supervisory work, the MFSA has found Confiance Malta Limited to have fallen short of the standards expected of a trustee under the Trusts and Trustees Act and, in the interest of its clients, has decided to issue these Directives.

These Directives are being published in terms of article 48(4) of the Trusts and Trustees Act.

UPDATE

The Authority’s decision was appealed before the Financial Services Tribunal within the period established by law. On 10 July 2019, the appeal before the Financial Services Tribunal was withdrawn.
16/08/2017P.D.K. FINANCIAL SERVICES LIMITEDThe Malta Financial Services Authority (“the Authority”), by the powers vested in it by Article 16 of the Malta Financial Services Act (Chapter 330 of the Laws of Malta) has issued an administrative measure against P.D.K. Financial Services Limited (the “Financial Institution”) for failure to communicate with the Authority and to submit its audited financial statements within the stipulated timeframes. The Financial Institution has been directed to:

- make immediate contact with the Authority,
- preserve and safeguard all clients’ money if any,
- ensure that all the Financial Institution’s records, including any records related to the Institution’s clients are kept safe and not destroyed, erased or disposed of in any manner, and
- inform the Authority of the existence of any pending complaints against the Financial Institution and/or litigation, local or otherwise, in which the Financial Institution may be involved.

This notice is being published in terms of Article 16(8) of the Malta Financial Services Act, Chapter 330 of the Laws of Malta
26/05/2017MCM GLOBAL OPPORTUNITIES FUND SICAV PLCOn 24 May 2017, the Malta Financial Services Authority (“the Authority”) suspended the Collective Investment Scheme Licence granted to MCM Global Opportunities Fund SICAV plc (“the Scheme”) in respect of its Sub-Fund, namely Global Equity Opportunities Fund. The suspension will be applicable with immediate effect and will remain in force until such time as may be otherwise directed or decided by the Authority.

The Scheme was found to be in breach of:

(a) Standard Licence Condition (“SLC”) 1.39 of Part BII of the Investment Services Rules for Professional Investor Funds (“the Rules”), whereby the Scheme should take all reasonable steps to comply with the investment objectives, policies and restrictions outlined in its Offering Documentation;
(b) SLC 1.23 and SLC 1.29 of Part BII of the Rules, which require the Scheme to have a Compliance Officer and a Money Laundering Reporting Officer at all times;
(c) SLC 1.8 of Part BII of the Rules, which requires the Scheme to have an appointed Administrator unless the Investment Manager assumes responsibility for the said function. Upon the resignation of the appointed Administrator, no arrangements were made for another Administrator to be appointed or for the Investment Manager to take over the administration function;
(d) Upon the resignation of the appointed Auditor, there was no action taken for the appointment of a new Auditor, meaning that the Scheme was in breach of SLC 1.32 laid down in Part BII of the Rules;
(e) During the onsite visit conducted by the Authority, there was not a complete repository of share certificates and other documents evidencing title to the underlying investments held by the Scheme, constituting a breach of SLC 1.13 in Part BII of the Rules; and
(f) SLC 1.62 of Part BII of the Rules as the Scheme failed to submit the audited financial statements for the years ending 31 December 2014 and 31 December 2015.

 
This regulatory action has been enforced in terms of Article 7(3)(b) of the Investment Services Act whilst this notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
05/05/2017VICTORIA INSURANCE AGENCY LIMITEDOn the 5th May 2017, the Malta Financial Services Authority (‘MFSA’) suspended the name of Victoria Insurance Agency Ltd from the Agents List on regulatory grounds in terms of its powers under articles 16(b), 16(d), 16(f) and 16(g) of the Insurance Intermediaries Act (Cap. 487).

This notice is being published in terms of the powers vested in the MFSA under Article 16(8) of the Malta Financial Services Authority Act (Cap. 330).

Victoria Insurance Agency Ltd has appealed this decision and is pending before the Financial Services Tribunal. In terms of article 21(17) of the Malta Financial Services Act (Cap 330 of the Laws of Malta), an appeal by a company to the Financial Services Tribunal from a decision of the MFSA to suspend the enrolment of the company and the issue of a directive, shall not suspend the operation of such decision and directive.
17/04/2017TEMPLE ASSET MANAGEMENT LIMITEDRegulatory Action against Temple Asset Management Limited:

On 13 April 2017, the Malta Financial Services Authority (“MFSA” or “the Authority”) has taken the following regulatory action against Temple Asset Management Limited (“the Company” or “Temple”):

i. Cancellation of the investment services licence granted to the Company, in terms of Article 7(2) of the Investment Services Act, Chapter 370 of the Laws of Malta (“ISA”); and

ii. An administrative penalty of €612,473.85 in terms of the powers granted to the Authority both under Article 16A of the Investment Services Act and under regulation 4 of Subsidiary Legislation 370.33, Investment Services Act (UCITS Administrative Penalties, Measures and Investigatory Powers) Regulations.

The Authority investigated the manner in which Temple executed its role/function as Investment Manager of Falcon Funds SICAV plc (“Falcon” or “the Scheme”) and inter alia it conducted three onsite visits (on 1 July 2016; 13 September 2016 and 14 October 2016) at Temple’s offices focusing on the manner in which Temple was managing Falcon’s portfolio.

The Company was found to be in breach of 23 different Standard Licence Conditions of Part BII of the Investment Services Rules for Investment Services Providers (“the Rules”) and Part BII of the Investment Services Rules for Retail Collective Investment Schemes (“the UCITS Rules”).

Standard Licence Condition followed by a brief description of breach:

- SLC 1.07 of Part BII of the Rules
General requirements - Lack of co-operation with the Authority in an open and honest manner

- SLC 1.13 of Part BII of the Rules
General requirements - Lack of co-operation with the Authority during an inspection or other enquiry

- SLC 1.10(j) of Part BII of the Rules
General Requirements - Lack of approvals/ notifications sought from/ notified to the Authority

- SLC 1.11(i) of Part BII of the Rules
General requirements – Failure to seek written consent from the Authority to appoint Portfolio Manager

- SLC 2.29 of Part BII of the Rules
Permanent risk management function – Failure to establish and maintain a risk management function which is hierarchically and functionally independent from the operating units

- SLC 2.40 of Part BII of the Rules
Assessment, monitoring and review of risk management policy – Failure to notify the Authority of material changes to the risk management process

- SLC 2.32 (a) - (c) of Part BII of the Rules
Permanent risk management function - Shortcomings re risk reporting and lack of adherence to the risk management policies

- SLC 3.18 of Part BII of the Rules
Duty to act in the best interest of UCITS and their Unit-holders – Failure to ensure fair, correct and transparent pricing models and valuation systems

- SLC 3.23 of Part BII of the Rules
Due diligence requirements – Failure to formulate forecasts and perform analysis of illiquid assets

- SLC 3.20 of Part BII of the Rules (in the instance of at least nine different securities)
Due diligence requirements – Failure to undertake due diligence and ongoing monitoring of investments

- SLC 3.07 of Part BII of the Rules
Independence in conflicts management – Failure to ensure procedures and measures which provide for relevant persons engaged in activities involving conflict of interest carry out such activities independently as possible

- SLC 3.11 of Part BII of the Rules
Management of activities giving rise to detrimental conflicts of interest - Senior management failed to take necessary decision where the arrangement made by the Company for the management of conflicts of interest was not sufficient

- SLC 3.12 of Part BII of the Rules
Management of activities giving rise to detrimental conflicts of interest – Failure to notify the investors of situations mentioned in SLC 3.11

- SLC 5.01 of Part BII of the Rules
Financial resources – deficit in financial resources requirement

- SLC 2.19(a) of Part BII of the Rules
Permanent compliance function – Failure to ensure that the compliance function has access to all relevant information

- SLC 2.03(c) and (d) of Part BII of the Rules
Administrative procedures and internal control mechanisms - Lack of internal control mechanisms and effective internal reporting

- SLC 2.12 (c) and (e) of Part BII of the Rules
Control by senior management and supervisory function – Failure to ensure an effective compliance function and failure to approve and review on periodic basis the adequacy of internal procedures for undertaking investment decisions for each managed UCITS

- SLC 2.13 (a) of Part BII of the Rules
Control by senior management and supervisory function - Lack of assessment and periodic review of the effectiveness of policies, procedures and arrangements

- SLC 3.08(d) of Part BII of the Rules
Independence in conflicts management – Failure to ensure measures which prevent or limit any person from exercising inappropriate influence on relevant persons carrying out portfolio management activities

- SLC 3.21 of Part BII of the Rules
Due diligence requirements – Failure to ensure adequate knowledge and understanding of the assets in which the UCITS are invested in

- SLC 12.5 of the UCITS Rules
Failure to comply with the custodian’s directions

- SLC 12.20 of the UCITS Rules
Failure to notify the Authority of breaches of SLCs or Constitutional Documents

- SLC 2.18 of Part BII of the Rules
Permanent compliance function – Failure to establish and maintain a permanent and effective compliance function which monitors the adequacy and effectiveness of the measures, policies and procedures; and to advise and assist the relevant persons for carrying out their activities

The Company is authorised by the Authority to manage AIFs and UCITS, and as a Super Management Company, i.e. a company licensed to provide management services to AIFs and UCITS, the Authority would reasonably have expected the Company to demonstrate a culture that supports effective compliance – clearly this was lacking as evidenced by the broad range of breaches that were recorded touching practically all facets of the Company’s business as a regulated entity. Moreover, Temple failed to maintain an adequate internal control environment and for a number of months, the Company relied heavily on one person, for both portfolio management and risk management – a situation that was untenable given the manifest conflicts of interest that arose.

The quantum of the administrative penalty for each breach has been determined in accordance with Regulation 7 of the Investment Services Act (UCITS Administrative Penalties, Measures and Investigatory Powers) Regulations and Appendix 5 to Part B of the Investment Services Rules for Investment Services Providers. In this regard, the following factors were considered:

(a) The gravity and duration of the breach in question;
(b) The degree of responsibility of Temple for the infringement as delegated Investment Manager of Falcon Funds SICAV plc;
(c) The financial strength of Temple;
(d) The damage to other persons and the market, in particular the significant losses sustained by the investor;
(e) The level of cooperation with the MFSA; and
(f) The failure by Temple to implement remedial actions to rectify the breaches and to prevent repetition after the breach had been identified.

This notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.

The Authority’s decision to cancel the Company’s licence shall not become operative until the expiration of the period within which an appeal lies 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.

Update on 24 July 2017

The Company failed to submit a formal appeal with the Financial Services Tribunal by the stipulated timeframe, i.e. 12 May 2017 (thirty days from the date of notification to the Company of the said decision). Consequently, the administrative penalty imposed on Temple is due to the Authority and the cancellation of the Company’s licence has become operative as at the aforementioned date, i.e. 12 May 2017.
23/03/2017 NEMEA BANK PLCPublic Notice concerning Nemea Bank p.l.c.


Reference is made to the Malta Financial Services Authority’s (‘the Authority) Media Release concerning Nemea Bank plc (‘the bank’) dated 20 January 2017.

Further to the above media release, on 23 March 2017 the ECB decided to withdraw the licence of the bank.
This notice will remain valid until such time as the Authority may communicate further information.

Further information may be obtained by accessing the Authority’s webpage www.mfsa.mt which includes a number of Frequently Asked Questions.

Any communication in relation to the Bank should be addressed to the Bank on 25708100 or the Authority on contact number Freephone 80074924.

- view attached file -
09/03/2017LANDOVERSEAS FUND SICAV p.l.c.On 09 March 2017, the Malta Financial Services Authority (‘the Authority’) has suspended the Collective Investment Scheme Licence of LandOverseas Fund SICAV plc (‘LandOverseas’ or ‘the Scheme’) in respect of its sub-funds, namely LandOverseas Distributor Fund and LandOverseas Property Fund. The suspension will be applicable with immediate effect and will remain in force until the Scheme’s licence is surrendered to the Authority or as otherwise may be directed by the Authority.

LandOverseas was found to be in breach of:

(a) Standard Licence Condition (‘SLC’) 1.23 of Part BI and SLC 1.23 of Part BII of the Investment Services Rules for Professional Investor Funds (‘the Rules’), which require the Scheme to have an appointed Compliance Officer at all times;

(b) SLC 4.4 of Appendix I to Part B of the Rules, which requires the Investment Committee of a self-managed collective investment scheme to be composed of three individuals;

(c) SLC 1.8 of Part BI and SLC 1.8 of Part BII of the Rules, which requires LandOverseas to have an appointed Administrator unless the Investment Manager assumes responsibility for the said function. In addition, LandOverseas breached SLC 1.10 of Part BI and SLC 1.10 of Part BII of the Rules as it failed to obtain the Authority’s approval prior to implementing changes to the administration function of the Scheme;

(d) Failure to adhere to the conditions set out in the derogation granted by the Authority on 24 April 2012 with respect to SLC 1.13 of Part BI of the Rules which exempted LandOverseas to appoint a Custodian subject to the appointed Administrator reviewing the activities of the portfolio manager to ensure compliance with the Offering Documentation;

(e) SLC 1.71 of Part BI and SLC 1.44 of Part BII of the Rules as the information provided in the Offering Documentation on: (i) service providers, and (ii) the net asset value calculation function was not updated accordingly; and

(f) SLC 1.88 of Part BI and SLC 1.62 of Part BII of the Rules as the Scheme failed to submit the audited financial statements for the years ending 30 June 2013, 30 June 2014 and 30 June 2015 within the applicable deadlines.

This regulatory action has been enforced in terms of Article 7(3)(b) of the Investment Services Act whilst this notice is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act.
07/03/2017FPC WEALTH MANAGEMENT LIMITEDOn 6 March 2017, the Malta Financial Services Authority has, on regulatory grounds, suspended with immediate effect, the authorisation granted to FPC Wealth Management Limited in terms of article 43 of the Trusts and Trustees Act (Chapter 331 of the Laws of Malta).

After consideration of all the circumstances, FPC Wealth Management Limited was found in breach of the following article of the Trusts and Trustees Act:

- Article 43(4)(1)(c) which requires the directors of the company or, in case of a body corporate other than a company, any other persons entrusted with the management and administration thereof, are not less than three in number and are individuals who are approved persons.

FPC Wealth Management Limited is also being directed to transfer its remaining fiduciary business to another person authorised to provide fiduciary services in terms of article 43(4) of the Trusts and Trustees Act.

The Malta Financial Services Authority has taken this decision in terms of its powers under article 46(b) of the Trusts and Trustees Act.
07/03/2017Venture Services LimitedOn 6 March 2017, the Malta Financial Services Authority has, on regulatory grounds, suspended with immediate effect, the authorisation granted to Venture Services Limited in terms of article 43 of the Trusts and Trustees Act (Chapter 331 of the Laws of Malta).

After consideration of all the circumstances, Venture Services Limited was found in breach of the following articles of the Trusts and Trustees Act:

- Article 43(4)(1)(c) which requires the directors of the company or, in case of a body corporate other than a company, any other persons entrusted with the management and administration thereof, are not less than three in number and are individuals who are approved persons; and

- Article 43(4)(1)(d) which requires the body corporate to have a minimum share capital of fifteen thousand euro (€15,000), which it shall maintain throughout its duration.

Venture Services Limited is also being directed to transfer its remaining fiduciary business to another person authorised to provide fiduciary services in terms of article 43(4) of the Trusts and Trustees Act.

The Malta Financial Services Authority has taken this decision in terms of its powers under article 46(b) of the Trusts and Trustees Act.
06/02/2017John RadfordOn the 6th February 2017, the Malta Financial Services Authority (“MFSA”) requested Mr. John Radford, on regulatory grounds, to resign from all executive roles within One Insurance Limited (“OIL”), including all its board committees. Such decision has been issued in terms of the Insurance Business Act (Cap 403).

The Authority will review its position in his regard after the lapse of two years from the date of the final decision.

This notice is being published in terms of the powers vested in the Authority under article 16(8) of the Malta Financial Services Authority Act (Cap.330 of the Laws of Malta).
20/01/2017NEMEA BANK PLCPublic Notice concerning Nemea Bank plc

On 27 April 2016 the Malta Financial Services Authority (‘the Authority’) issued a Public Notice concerning Nemea Bank plc (‘the Bank’) whereby the Authority informed the public that in order to ensure the proper protection of depositors and the Bank’s other clients, the Authority was appointing PricewaterhouseCoopers Malta (‘PwC’) as a competent person in terms of Article 29 of the Banking Act and Article 15A of the Investment Services Act.
In terms of the same Directive, the Competent Person was instructed to [i] take charge of the assets of the Bank for the purpose of safeguarding the interests of depositors and its other clients; and [ii] to assume control of the Bank’s business and to carry on that business and such other functions as the MFSA may direct.
These precautionary measures were taken in view of regulatory shortcomings that had been identified at the Bank and were to remain in place until such time as the MFSA may otherwise direct.
By a further Notice issued on the same date the Authority advised that the limit for withdrawals from Nemea Bank deposit accounts had been set at €250 per depositor per day.
By means of another Public Notice published on 18 July 2016 the Authority advised that it had decided to ease the deposit withdrawal limit from €250 to €2,500 per depositor per day. This easing was subject to the condition that the present maturities of deposits are maintained and that no term deposits are allowed to be withdrawn before their stated maturity dates.
The Authority also confirmed that discussions were being conducted with the Bank’s shareholders with the aim of ensuring that the necessary action is taken to address the regulatory shortcomings.
Despite repeated requests, to date no tangible progress has been registered to fulfil these regulatory requirements. Given that this situation cannot be sustained indefinitely without undue detriment to depositors, the Authority has now decided to propose to the ECB the withdrawal of the licence granted to the Bank under the Banking Act, Cap 371. This measure has been taken by the Authority in the interests of the depositors of the Bank.
Pending the ECB’s final decision on the license withdrawal, a prohibition of the withdrawal of deposits has been put in place with immediate effect as a precautionary measure to safeguard the assets of the Bank and to ensure the equal treatment of depositors. In addition the Competent Person will remain in place until further notice.
This notice will remain valid until such time as the MFSA may communicate further information.
Further information may be obtained by accessing the Authority’s webpage www.mfsa.mt which includes a number of Frequently Asked Questions.
Any communication in relation to the Bank should be addressed to the Bank on 25708100 or the Authority on contact number Freephone 80074924.

- view attached file -
12/01/2017FALCON FUNDS SICAV p.l.c.This notice is being issued in respect of Falcon Funds SICAV plc (‘the Scheme’) having registration number SV295 and registered office at TG Complex, Suite 2, Level 3, Brewery Street, Mriehel, Birkirkara and which holds a collective investment scheme licence pursuant to Section 6 of the Investment Services Act and qualifies as a Maltese undertaking for collective investment in transferable securities (UCITS) pursuant to the Investment Services Act (Marketing of UCITS) Regulations in respect of its three sub-funds: Falcon Aggressive Fund, Falcon Cautious Fund and Falcon Balanced Fund (‘the Sub-Funds’).

The MFSA has been investigating the conduct of the Scheme since December 2015. Following careful consideration of the facts available to the Authority, on 9 and 22 September 2016 the MFSA issued two directives to the Scheme under the powers granted to the Authority in Article 15 of the Investment Services Act.

In order to ensure the proper protection of the unit-holders and other creditors of the Scheme, the MFSA appointed KPMG Malta (‘KPMG’) as a competent person in terms of Article 15A of the Investment Services Act with effect from 11 January 2017 to inter alia: [a] to take charge of the assets of the Scheme for the purpose of safeguarding the interests of the investors in the Sub-Funds of the Scheme, [b] assume control of the business of the Scheme, [c] periodically report to the MFSA and other relevant persons on the activities undertaken, and [d] carry out such other functions as the MFSA may direct. This measure is being taken with specific reference to the Scheme following an on-going investigation on the Scheme and the termination of the Investment Management Agreement between the Scheme and Temple Asset Management Ltd, the former Investment Manager of the Scheme.

These measures will remain in place until such time as the MFSA directs otherwise.
22/09/2016FALCON FUNDS SICAV p.l.c.Directive of the Malta Financial Services Authority in terms of Article 15 of the Investment Services Act

Falcon Funds SICAV plc is hereby directed to redeem the units of the sub-funds held by the Swedish Pension Agency according to an orderly redemption plan. In this regard, the MFSA further directs Falcon Funds SICAV plc to:

[a] realise in an orderly manner the liquid assets of the sub-funds in the best interest of the unit-holders and pay out of the related redemption proceeds within two weeks of receipt of this directive;

[b] realise in an orderly manner the illiquid assets of the sub-funds as soon as prices for them may be obtained that are in the best interest of the unit-holders and, in any case, no later than nine months from the receipt of this directive;

[c] pay out the redemption proceeds relating to the asset disposal referred to in sub-paragraph (b) on a continuous basis as soon as possible after the assets are disposed of;

[d] report to the MFSA on the implementation of the redemption plan on a weekly basis for the first month following the receipt of the MFSA directive and every two weeks thereafter. This report is to include a section setting out the efforts to sell, liquidate or transfer the ETIs and other illiquid investments in an orderly manner and in the best interest of unit-holders; and

[e] notify the MFSA of any material impairments and/or realised losses as soon as they arise.

The above directive is being issued by the MFSA to protect and safeguard the interests of the current unit-holders in the Fund in the context of the specific circumstances that have arisen.

The above directive is being issued in terms of Article 15 of the Investment Services Act and shall take effect immediately.

Falcon is further advised that this directive may he appealed before the Financial Services Tribunal by not later than 30 days from the date of notification of the directive. Any such appeal does not suspend the operation of any directive from which the appeal is made.
09/09/2016FALCON FUNDS SICAV p.l.c.Directive of the Malta Financial Services Authority in terms of Article 15 of the Investment Services Act

Falcon Funds SICAV plc is hereby being directed with immediate effect to lift the temporary suspension of redemptions and subscriptions.
The above directive is being issued by the MFSA to protect and safeguard the interests of the current and prospective investors in the Fund in the context of the specific circumstances that have arisen.

The above directive is being issued in terms of Article 15 of the Investment Services Act and shall take effect immediately.

Falcon is further advised that this directive may be appealed before the Financial Services Tribunal by not later than 30 days from the date of notification of the directive.
27/06/2016STM MALTA TRUST AND COMPANY MANAGEMENT LIMITEDOn 13 April 2016, the Malta Financial Services Authority (“The MFSA”) imposed the following administrative penalties on STM Malta Trust and Company Management Limited (“STMT”), a retirement scheme administrator, which at the time of the breaches, was registered under the Special Funds (Regulation) Act (Cap. 450): In terms of article 7(6) of the Special Funds (Regulation) Act, the MFSA imposed an administrative penalty of ten thousand Euro (€10,000) for breach of article 2 of the Special Funds (Regulation) Act and Standard Operational Condition B.1.1.12 of the Directives issued under the said Act; In terms of article 17(6) of the Special Funds (Regulation) Act, the MFSA imposed an administrative penalty of ten thousand Euro (€10,000) for breach of Standard Operational Condition B.2.7.6 of the Directives issued under the said Act; In terms of article 7(6) of the Special Funds (Regulation) Act, the MFSA imposed an administrative penalty of two thousand five hundred Euro (€2,500) for non-compliance with Licensing Condition 2.2(d)(iii) of the STM Malta Retirement Plan); and In terms of article 7(6) of the Special Funds (Regulation) Act, the MFSA imposed an administrative penalty of five thousand Euro (€5,000) for non-compliance with Licensing Condition 2.2(d)(v) of the STM Malta Retirement Plan. This notice is being published in terms of the powers vested in the MFSA in terms of article 16(8) of the Malta Financial Services Authority Act (Cap. 330) and article 59 of the Special Funds (Regulation) Act.
09/06/2016The Depositary of FUTURA FUNDS SICAV P.L.CFollowing the postponement of the review of the licence upgrade of Futura Investment Management Limited (“Futura”) to a full AIFM and the subsequent directive issued by the Malta Financial Services Authority to Futura on 9 June 2016 to inter alia: (a) restrict its business in line with the de minimis threshold stipulated in Article 3(2) of the AIFMD, and (b) to comply with Section 1 (General Requirements) to Section 8 (Supplementary Reporting Obligations for Licence Holders Managing Specific Types of AIFs – Leveraged AIFs) of Part BIII of the Investment Services Rules for Investment Services Providers until such time as the assets under management figure of Futura falls below €100 million. On 9 June 2016, the MFSA issued a separate directive to Bank of Valletta plc as Depositary of Futura Funds SICAV plc in terms of Article 15 of the Investment Services Act. In this regard, the MFSA directed Bank of Valletta plc as Depositary to upgrade the existing Custody Agreement with Futura Funds SICAV plc and to make it fully AIFMD compliant, in particular to reflect the provisions of Article 21 of the AIFMD under the assets under management figure of Futura falls below €100 million or as otherwise directed by the MFSA. The revised Custody Agreement would inter alia require Bank of Valletta plc as Depositary to:

1) undertake cash flow monitoring duties with respect to transactions conducted by Futura Funds SICAV plc;
2) review compliance with the investment restrictions of Futura Funds SICAV plc; and
3) ensure that the asset valuation is carried out in line with the valuation rules of Futura Funds SICAV plc as well as the provisions of Article 19 of the AIFMD.

This is apart from other obligations pertaining to the depositary as arising from Article 21 of the AIFMD.

The MFSA has taken this decision in terms of the powers granted to it under Article 15 of the Investment Services Act.

UPDATE WITH EFFECT FROM 14 JULY 2021

Having considered the goodwill demonstrated by Futura Investment Management Ltd and Futura Funds SICA V plc the Authority has decided to settle pending issues relating to the said companies subject to a number of terms. As part of the settlement, the Authority has decided to lift the directives issued by it on the 9 June 2016 against Futura Investment Management Limited (“Futura Manco”) and REYL & Cie (Malta) Ltd as the depositary thereof and, consequently, Futura Manco has agreed to withdraw, immediately and unconditionally, its appeal against the said directives before the Financial Services Tribunal bearing reference number FSTO8/16.
09/06/2016FUTURA INVESTMENT MANAGEMENT LIMITEDOn 9 June 2016, the Malta Financial Services Authority postponed the review of the upgrade of the licence of Futura Investment Management Limited (“Futura”) (a Category 2 Fund Manager) to a full Alternative Investment Fund Manager and issued the following two directives to Futura.

Directive 1:

To restrict the business of Futura to the existing levels with immediate effect and to refrain from increasing Futura’s total assets under management (including to reject subscriptions in all existing funds managed) or to accept any new mandates until the assets under management figure of Futura falls below the €100 million threshold stipulated in Article 3(2) of the AIFMD as transposed in Section 1 of Part BIII of the Investment Services Rules for Investment Services Providers.

Directive 2:

Given that the total assets under management of Futura significantly exceeded the €100 million de minimis threshold stipulated in Article 3(2) of the AIFMD, the MFSA directed Futura:
a) to abide by and comply with Section 1 (General Requirements) to Section 8 (Supplementary Reporting Obligations for Licence Holders Managing Specific Types of AIFs – Leveraged AIFs) of Part BIII of the Investment Services Rules for Investment Services Providers in the conduct of its operations; and
b) to refrain from marketing funds in general and from exercising passporting rights and/ or the private placement provisions within the EU as provided for under the AIFMD.

The MFSA has taken this decision in terms of the powers granted to it under Article 15 of the Investment Services Act.

This notice is being published in terms of the powers vested in the MFSA under Article 15(4) of the Investment Services Act.

UPDATED ON 14 JULY 2021

Having considered the goodwill demonstrated by Futura Investment Management Ltd and Futura Funds SICA V plc the Authority has decided to settle pending issues relating to the said companies subject to a number of terms. As part of the settlement, the Authority has decided to lift the directives issued by it on the 9 June 2016 against Futura Investment Management Limited (“Futura Manco”) and REYL & Cie (Malta) Ltd as the depositary thereof and, consequently, Futura Manco has agreed to withdraw, immediately and unconditionally, its appeal against the said directives before the Financial Services Tribunal bearing reference number FSTO8/16.
27/04/2016NEMEA BANK PLCPublic Notice Concerning Nemea Bank plc


This notice is being issued in respect of Nemea Bank p.l.c., (“the Bank”) having registration number C-45026 and operating from Level 17, Portomaso Tower, St Julians, and which holds a credit institution licence in terms of the Banking Act (Chapter 371 of the Laws of Malta), and a Category 2 and Category 3 investment services licence in terms of the Investment Services Act (Chapter 370 of the Laws of Malta).

In order to ensure the proper protection of depositors and the Bank’s other clients, the MFSA has today appointed PricewaterhouseCoopers Malta (‘PwC’) as a competent person in terms of Article 29 of the Banking Act and Article 15A of the Investment Services Act. Furthermore the Bank has been given direction with respect to acceptance of deposits and withdrawals until further notice.

These measures are being taken with specific reference to the Bank following an on-site inspection at the Bank carried out jointly with members of the DGMSIII of the European Central Bank (‘ECB’) and which was finalised in April 2016. As a result of this joint inspection a number of serious regulatory shortcomings have been identified and the Authority has decided to take regulatory action to safeguard the interests of depositors and other creditors of the Bank.

In view of these regulatory concerns, which were also discussed by the Supervisory Board of the ECB, the MFSA considered that as a response to the Bank’s situation, taking also the recommendation of the Supervisory Board of the ECB, it is necessary to appoint a competent person to: [i] take charge of the assets of the Bank for the purpose of safeguarding the interests of depositors and its other clients; and [ii] to assume control of the Bank’s business and to carry on that business and such other functions as the MFSA may direct.

These precautionary measures will remain in place until such time as the MFSA may direct otherwise.

Any communication in relation to the Bank should be addressed to the Bank on the following number 25708100.

Click below to view Questions & Answers in relation to the above Notice:

- view attached file -
13/04/2016STM MALTA TRUST AND COMPANY MANAGEMENT LIMITEDOn 13 April 2016, the Malta Financial Services Authority imposed an administrative penalty of fifty thousand Euro (€50,000) on STM Malta Trust and Company Management Limited (“STMT”) for breach of article 21(1) of the Trusts and Trustees Act (Cap.331) and paragraph 6.0 of the Code of Conduct for Trustees. The Authority’s decision was based on STMT’s failure to disclose and repeated resistance to the Authority’s direction to disclose its interest to the members or potential members of its Retirement Schemes, with respect to transactions between itself, a particular introducer and a product provider, creating a conflict of interest. This notice is being published in terms of the powers vested in the MFSA in terms of article 16(8) of the Malta Financial Services Authority Act (Cap. 330).

Updated on 14 July 2016

On 20 June, 2016, the Malta Financial Services Authority was notified of the appeal filed by STM Malta Trust and Company Management Limited against the Authority’s decision to impose an administrative penalty for breach of article 21(1) of the Trusts and Trustees Act (Cap.331) and paragraph 6.0 of the Code of Conduct for Trustees. The appeal had been received by the Financial Services Tribunal on the 12 May 2016.

Updated 22 November 2018

Further to the Notice issued by the Malta Financial Services Authority on 13 April 2016 in relation to the Authority’s decision to impose an administrative penalty of fifty thousand Euro (€50,000) on STM Malta Trust and Company Management Limited (“STMT”) for the breach of article 21(1) of the Trusts and Trustees Act (Cap.331) and paragraph 6.0 of the Code of Conduct for Trustees, and further to the update issued on 14 July 2017 relating to the appeal filed by STMT against the Authority’s decision, it should be noted that STMT has now withdrawn its appeal in this regard
29/03/2016FIMBank p.l.c.On 29th March 2016, the Malta Financial Services Authority (the MFSA or the Authority) decided to apply a number of restrictions on FIMBank plc through applying limitations on the expansion and further investment in its network of subsidiary and associated entities, in terms of the powers granted to the Authority under article 17E(1)and (2) of the Banking Act and sub-regulation 9(e) of the Banking Act (Supervisory Review) Regulations (subsidiary legislation 371.16).

Following an on-site inspection carried out during March and April 2015, on the basis of an accumulation of findings, the MFSA has determined that the governance arrangements, processes and mechanisms in place at the time of the inspection were not considered to be comprehensive to the nature, scale and complexity of the credit institution’s activities. Therefore, the requirements of article 17(B)(1) and 17(B)(2) of the Banking Act (Cap. 371) were not met.

Mitigating Factors

On the basis of a thorough assessment of the developments that have taken place subsequent to the conclusion of the on-site inspection, the Authority considers that significant progress has been registered by the FIMBank plc to remediate identified shortcomings. Accordingly, the Authority specifies that certain mitigating factors, particularly the positive stance taken by the Bank’s Board of Directors through inter alia the changes in senior management structures, the sustained level of shareholder support, the fact that actions to implement the corrective measures as requested by the Inspectors have been taken (or are in the process of being undertaken) and the collaborative stance adopted by the Bank’s Board of Directors and executive management, had a material bearing on its assessment and consideration to impose this regulatory action.

This notice is being published in terms of the powers vested in the MFSA under the Malta Financial Services Authority Act (Cap. 330).

Update on 9th May 2017

On the 8th May 2017, the Malta Financial Services Authority advised FIMBank plc of its decision to revoke the restrictions imposed on the 29th March 2016, with immediate effect. This decision was taken on the basis of the assurance obtained by the Authority regarding adherence to the requirements of article 17B(1) and 17B(2) of the Banking Act (Cap. 371).
08/03/2016FX-CAM CONSULTING AND ADVERTISEMENT LIMITEDFX-CAM Consulting and Advertisement Ltd [formerly Sensus Capital Markets Limited]

On the 8 March 2016, the Malta Financial Services Authority (the MFSA or the Authority) has decided to cancel the Category 2 Investment Services Licence of FX-CAM Consulting and Advertisement Ltd (C57386), formerly Sensus Capital Markets Limited (Sensus or Company) in terms of the powers granted to the Authority under Article 7 of the Investment Services Act (ISA).


Sensus was found in breach of:


- Article 3(1) of the ISA and Standard Licence Condition (SLC) 1.13 of Part BI of the Investment Services Rules for Investment Services Providers (the Rules) for acting beyond its licence by dealing on own account when it was not licensed to do so;


- SLCs 2.94, 2.95, 2.96 and 2.97 of the Rules in breach of the conflicts of interest requirements;


- SLCs 1.06(m), 2.133, 2.134 and 2.141 of the Rules in relation to Sensus’ appointment of Introducing Brokers;


- SLCs 2.83, 2.84 and 2.85 in relation to breaches relating to record keeping and retention of data;


- SLCs 1.17(c), 1.17(e), 1.18(c) and 1.25 of the Rules with respect to breaches of the general organisational requirements;


- SLCs 1.06(o) and 1.06(k) of the Rules for failure to notify the MFSA of material information concerning the Company;


- SLCs 7.16 and 7.17 for failure to submit the annual audited financial statements and related documents within the required timeframes;


- SLCs 1.04 and 1.22(b) of the Rules in relation to the appointment of company officials;


- SLCs 1.02 and 1.09 of the Rules as well as Article 13 of the ISA for failure to cooperate in an open and honest manner with the MFSA and for providing inconsistent information to the MFSA;


- SLC 1.20 of the Rules for providing the Company’s Compliance Officer with incomplete and /or misleading information;


- SLC 1.06(b) of the Rules for failing to formally notify the MFSA about its change in registered address.


The seriousness of Sensus’ above breaches is aggravated by a number of factors including the following:


- The Company does not appear to have acted in good faith and has not shown any degree of openness or co-operation; rather, it has, on numerous occasions, attempted to conceal information and mislead the MFSA whilst undertaking activities that went beyond its licence;


- There are circumstances suggesting that, Sensus consciously concealed information and/or attempted to mislead the MFSA;


- The seriousness of the Company’s infringements may have potentially caused losses to its clients as well as impacting its financial soundness, particularly since it failed to obtain a licence to operate as a Category 3 licence holder, and hence was not subject to more onerous licence conditions, including those related to capital requirements and reporting obligations; and


- Sensus engaged in these actions in a repeated and systematic manner and hence its infringements cannot be described as being isolated incidents.


Sensus has therefore been found in breach of a number of requirements which are inter alia intended both to protect investors and to ensure the financial soundness of the Company.


It should be noted that the MFSA decision to cancel Sensus’ licence shall not become operative until the expiration of the period within which an appeal lies, 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.


Updated on 22/06/2016

On the 20 June, 2016, the Malta Financial Services Authority was notified of the appeal filed by FX-CAM Consulting and Advertisement Ltd (formerly Sensus Capital Markets Ltd) against the Authority’s decision to cancel the Company’s licence. The appeal had been received by the Financial Services Tribunal on the 7 April, 2016.
08/03/2016D.B.R. INVESTMENTS LIMITEDThis notice is being issued in respect of D.B.R. Investments Limited (“DBR” and “the Company”) having registration number C-27129 and operating from ‘Deber’, Nigret Road, Zurrieq, and which holds a Category 2 investment services licence issued by the MFSA. DBR is licensed to: [i] receive and transmit orders; [ii] place instruments without a firm commitment basis; [iii] provide nominee services; and [iv] execute orders on behalf of clients. DBR is not licensed by the MFSA to provide any other type of financial services whatsoever. In particular, DBR is not licenced to transact in the business of banking or in the business of a financial institution.


As part of its supervisory functions, the Authority carried out a number of inspections at the offices of DBR. The last on-site inspection at DBR was held in October 2014 following which the Authority continued to monitor the company closely with respect to its investment services business. As a result of the Authority’s intervention, on the 23rd September 2015 the Company confirmed to the Authority that it had stopped taking on new investment services business and would only continue to service existing investment services clients.


On the 6th October 2015 the Managing Director and majority shareholder of DBR, Mr John Farrugia, passed away. The Company subsequently started to wind down its investment services business. It also came to the attention of the Authority that the late Mr John Farrugia might have carried out unauthorised financial services activities in his personal capacity. In this regard, a report was made to the Police. Investigations are underway to establish the extent to which DBR may be involved in these unauthorised activities.


In order to safeguard the interest of investors, in November 2015 the Authority directed the Company inter alia to transfer its existing clients to other service providers in an expedited manner. Investment services clients of the Company have been approached in this regard and the process of the transfer of clients’ assets and monies to other service providers is underway. The Authority is closely monitoring the orderly winding down of the Company’s investment services activities in the best interest of clients.


The Authority directed that all existing client records and documents are to be kept safe and not destroyed, erased or disposed of in any manner and should not be moved or transferred from the registered office of the Company. In addition, the directors, shareholders, other officers and employees of the Company were directed to retain and to desist from destroying, damaging or altering any documentation which may be in their possession relating to the Company and/ or its clients. Also, the Authority directed the directors, shareholders, other officers and employees of the Company to ensure that no assets are transferred from the Company, other than strictly for the payment of claims and legitimate expenses arising from the business of investments.


In order to safeguard the interests of investors the Authority has today taken further steps by appointing Mr Paul Mercieca in terms of Article 15A of the Investment Services Act to take charge of the assets and to assume control of the Company’s business.

UPDATE

Mr Mercieca has fulfilled the tasks entrusted to him in terms of his appointment under Article 15A of the Investment Services Act. In view of such, his appointment has been concluded on 27 April 2020.

- view attached file -
08/01/2016RFID Invest II SICAV P.L.C.On 8 January 2016, the Malta Financial Services Authority (‘the Authority’) has, on regulatory grounds, suspended with immediate effect, the Collective Investment Scheme Licence of RFID Invest II SICAV plc (“the Scheme”).

After consideration of all the circumstances surrounding the Scheme, RFID Invest II SICAV plc was found to be in breach of the following Standard Licence Conditions (“SLCs”):

- SLC 1.61 of Part BII of the Investment Services Rules for Professional Investor Funds for the failure to submit the audited financial statements for the year ended 31 December 2013 and 31 December 2014;

- SLC 1.22 and SLC 1.28 of Part BII of the Investment Services Rules for Professional Investor Funds for the failure to have a Compliance Officer and a Money Laundering Reporting Officer at all times; and

- SLC 1.5 of Part BII of the Investment Services Rules for Professional Investor Funds for the failure to have a third party manager until the Scheme is converted to a Self-Managed scheme.

The Authority has taken this decision in terms of its powers under Article 7(3)(b) of the Investment Services Act.
02/11/2015COSMIC FINANCIAL SERVICES (MALTA) LIMITEDIn terms of the Decision taken by the Malta Financial Services Authority (‘MFSA’) on 30 October 2015, the MFSA has cancelled the Category 1A investment services licence of Cosmic Financial Services (Malta) Limited, with effect from 30 October 2015 after identifying a series of regulatory breaches. Cosmic Financial Services (Malta) Limited is no longer licensed to offer/provide investment services in or from within Malta.

This notice is being published in terms of the powers vested in the Authority under the provisions of the Malta Financial Services Authority Act.
08/10/2015Kentish Alan RoyOn the 8th October 2015, the Malta Financial Services Authority directed Mr Alan Kentish not to hold any directorship, senior managerial and, or executive roles within STM Malta Trust and Company Management Limited and STM Malta Insurance Management Limited for a period of one year from the date of this decision, in terms of article 48(2)(a) of the Trusts and Trustees Act (Cap. 331), article 51(5) of the Special Funds (Regulation) Act (Cap. 450), and article 54 of the Insurance Intermediaries Act (Cap. 487) (applying article 31A of the Insurance Business Act). Mr Alan Kentish has voluntarily resigned from director of STM Malta Trust and Company Management Limited and STM Malta Insurance Management Limited and as a registered insurance manager of the latter company.

The MFSA’s regulatory measure is not connected with any licensable activities being carried on by the aforementioned companies.

This notice is being published in accordance with the provisions of the Malta Financial Services Authority Act (Cap. 330).

On 2nd February 2016, the Malta Financial Services Authority was notified of the appeal filed by Mr Alan Kentish against the Authority’s decision of directing Mr Alan Kentish not to hold any directorship, senior managerial and, or executive roles within STM Malta Trust and Company Management Limited and STM Malta Insurance Management Limited for a period of one year from the date of the decision, in terms of article 48(2)(a) of the Trusts and Trustees Act (Cap. 331), article 51(5) of the Special Funds (Regulation) Act (Cap. 450), and article 54 of the Insurance Intermediaries Act (Cap. 487) (applying article 31A of the Insurance Business Act). The appeal had been received by the Financial Services Tribunal on the 6th November, 2015.
01/09/2015SMART INSURANCE BROKERS LIMITEDOn the 31st August 2015, the Authority suspended the name of Smart Insurance Brokers Ltd from the Brokers List on regulatory grounds in terms of its powers under article 16(b) of the Insurance Intermediaries Act (Cap. 487).
04/11/2014COSMIC FINANCIAL SERVICES (MALTA) LIMITEDOn 4th November 2014, the Malta Financial Services Authority (‘MFSA’) has suspended the Category 1A investment services licence of Cosmic Financial Services (Malta) Limited (‘the Company’), after identifying a series of regulatory breaches.
As a result, Cosmic Financial Services (Malta) Limited cannot accept new business and cannot continue servicing existing clients.
The following are the breaches identified by the Authority in relation to the compliance function and reporting requirements of the Company:
Compliance Function: The Company has failed to establish and maintain an effective compliance function. The Compliance Officer of the Company did not fulfilling his oversight role for a number of months.
Reporting Requirements: The Company is currently in breach of its reporting requirements including the submission of:
i. the annual unaudited financial returns covering year ending 31 May 2014;
ii. the annual audited financial statements for year ending May 2014;
iii. the annual audited financial return covering year ending May 2014;
iv. the Auditors’ Report to the MFSA required in terms of SLC 7.25 of Part BI to the Investment Services Rules for Investment Services Providers; and
v. a copy of the Management Letter of 2014.

This notice is being published in terms of the powers vested in the Authority under the provisions of the Malta Financial Services Authority Act.
15/07/2014Brightwell Portfolio Fund SICAV plcOn 15 July 2014, the Malta Financial Services Authority (‘the Authority’) has, on regulatory grounds, suspended with immediate effect, the Collective Investment Scheme Licence of Brightwell Portfolio Fund SICAV plc (‘Brightwell’) in respect of its sub-funds, namely Sub-Fund A - Global Managed Futures, Sub-Fund B - Equity Hedged, Sub-Fund C - High Leverage Managed Futures, Sub-Fund I - Properties Preferred and Sub-Fund P - Fixed Yield.

Following the resignation of key officials and service providers, Brightwell Portfolio Fund SICAV plc was found to be in breach of:
- Standard Licence Conditions (‘SLCs’) 1.22 and 1.28 of Part BII of the Investment Services Rules for Professional Investor Funds, which require the Scheme to have a Compliance Officer and Money Laundering Reporting Officer at all times;

- SLC 2.2 of Appendix I to Part B of the Investment Services Rules for Professional Investor Funds, which requires Brightwell to have a Director who is independent from the Manager and Custodian; and Article 137(1) of the Companies Act and Section 8 of Brightwell’s Memorandum of Association requiring it to have at least two Directors at all times;

- Article 135 of the Companies Act, as a result of which no shareholders’ resolutions can be passed by the Scheme since the quorum required in terms of the said Article cannot be met; and

- Article 138(1) of the Companies Act requiring Brightwell to have a Company Secretary.
The Authority has taken this decision in terms of its powers under Article 7(3)(b) and (c) of the Investment Services Act.

This notice is being published in terms of the powers vested in the Authority under the provisions of the Malta Financial Services Authority Act.
07/07/2014Galea JohnOn the 7 July 2014, the Malta Financial Services Authority (“MFSA”) directed Mr John Galea to resign as director of Galea Insurance Brokers Ltd (“GIB”) on regulatory grounds in terms of article 16(2)(b) of the Malta Financial Services Authority Act. This resignation shall come into effect no later than three months from the date of this decision.

The MFSA will review Mr Galea’s position on the lapse of one year from the date of this decision and in the event that he applies for re-appointment as director of GIB.

This notice is being published in terms of the powers vested in the MFSA under the Malta Financial Services Authority Act (Cap 430).
10/06/2014A25 Gold Producers CorpWith effect from 6th June 2014, the Listing Authority has decided to discontinue the listing of A25 Gold Producers Corp in terms of Listing Rule 1.21 and Article 18 of the Financial Markets Act (Cap. 345).
20/11/2013Bisazza AlbertoOn the 19th November 2013, the Malta Financial Services Authority (‘the Authority’) resolved, on regulatory grounds, to strike-off Mr Alberto Bisazza from the Brokers Register in terms of the Insurance Intermediaries Act (Cap.487) with immediate effect.
The Authority will review Mr Bisazza’s position on the lapse of two years from the date of this decision and in the event that he re-applies for registration in the Brokers Register.
This notice is being published in terms of the powers vested in the Authority under the Malta Financial Services Authority Act.
11/04/2013Pan European Umbrella SICAV plcOn the 11th April 2013, the Malta Financial Services Authority resolved, on regulatory grounds, to cancel the Collective Investment Scheme Licence of Pan European Umbrella SICAV plc, including the Licence granted to its Sub-Funds, namely Energy-4-Europe Fund and Pan European Real Estate Fund, with immediate effect. The Authority has taken this decision in terms of the powers under Article 7(3)(b) of the Investment Services Act. This notice is being published in terms of the powers vested in the Authority under the provisions of the Malta Financial Services Authority Act.
29/11/2012Guardian Securities LimitedOn the 28th November, 2012, the Malta Financial Services Authority resolved, on regulatory grounds, to cancel the Investment Services Licence of Guardian Securities Limited in terms of its powers under Article 7(2)(b) of the Investment Services Act, with immediate effect.
29/09/2011European Insurance Group LtdWith effect from the 29th September 2011 and in terms of Article 28(1)(f) of the Insurance Business Act, MFSA appointed Mr Brian Tonna, Certified Public Accountant, of Nexia BT, Ground Floor, Tower Business Centre, Tower Street, Swatar BKR 3013, Malta, to act as liquidator of European Insurance Group Ltd for the purpose of winding up of the business of the Company.
26/04/201121st Century Investments SICAV plcOn the 14th April 2011 the MFSA resolved, on regulatory grounds, to cancel the Collective Investment Scheme Licence of 21st Century Investments SICAV plc issued in respect of its two sub-funds namely ‘21st Century Dynamic Europe Fund’ and the ‘21st Century Global Opportunities Fund’, in terms of its powers under Article 7 of the Investment Services Act, 1994.Accordingly, the company is no longer authorized to hold itself as a licensed Collective Investment Scheme within the meaning of the Act.
12/07/2010European Insurance Group LtdRevocation of authorisation of European Insurance Group Ltd and appointment of administrator. The Malta Financial Services Authority (the MFSA), on the 12 July 2010 revoked the authorisation of European Insurance Group Ltd in terms of Article 26 of the Insurance Business Act (Cap 403) (the Act). The company has filed an appeal to the Financial Services Tribunal. The MFSA, with effect from the 6th August 2010 has, in terms of Article 28(1)(c) and (d) of the Act, appointed Deloitte, Certified Public Accountants, of Deloitte Place Mriehel Bypass Mriehel BKR 3000 Malta: to take charge of the assets of European Insurance Group Limited for the purposes of safeguarding the interests of the insureds, policyholders, creditors and shareholders of the company; and to assume control of the business of the Company.
11/06/2010The International Banking Corporation (Malta) plcThe Malta Financial Services Authority, in accordance with the provisions of the Banking Act (Chapter 371 of the laws of Malta) has revoked, with effect from 11th June 2010, the licence granted to The International Banking Corporation (Malta) plc on the 16th November 2007. On the 3rd September 2009, the Authority had restricted the banking licence of The International Banking Corporation (Malta) plc (Company registration C42805) due to circumstances affecting its majority shareholder, The International Banking Corporation B.S.C., which had been placed under administration by the Central Bank of Bahrain on the 30th July 2009.
05/05/2010European Insurance Group LtdOn the 26th April 2010, l’Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse Collettivo (“ISVAP”) issued the following Provvedimento n.2798 in relation to European Insurance Group’s insurance activities in Italy. Bollettino ISVAP n. 3/2010 - Provvedimento n. 2798 del 26 aprile 2010 European Insurance Group LTD con sede in Malta.

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03/08/2007Montaigne Investment (Malta) LtdOn the 22nd June 2007 the Authority resolved, on regulatory grounds, to cancel the Investment Services Licence of Montaigne Investment (Malta) Limited in terms of its powers under Article 7(1) of the Investment Services Act, 1994. This decision has now become final and operative with effect from the 22nd July, 2007.