Regulatory Action against MPM Capital Investments Limited (“MPM” or “the Company”)
AUGUST 29, 2020

The Malta Financial Services Authority (“MFSA” or “the Authority”) has decided to cancel the Company’s investment services licence by virtue of the powers granted under Article 7(2)(a), (b), (c) and (g) of the Investment Services Act and with imposing a number of directives against MPM.

Additionally, the Authority has decided to proceed with appointing an Inspector to assist the Authority in the fulfilment of its functions at law, in particular to investigate and report on the affairs of MPM.

Address:

76,
Valley Road,
Birkirkara
Malta

Business Activity: Investment Services

BREACHES

The deficiencies identified further to the Authority’s analysis of the activities undertaken by the Company, relate to the issues that:

  • MPM has carried out, on a regular and habitual basis, the payment service activity set out in paragraph 2, sub-paragraph (f), of the Second Schedule of the Financial Institutions Act (“FIA”), that is, money remittance, without the required licence;
  • The Company provided the Authority with false, inaccurate and misleading information; and
  • MPM failed, as a licence holder, to act and cooperate with the Authority in an open and honest manner, thus being in breach of Rule 1.02 of Part BI - Standard Licence Conditions applicable to Investment Services Licence Holders which qualify as MiFID Firms (applicable up to 2 January 2018) (“the Investment Services Rules). Additionally, the Company has also been in breach of Rule 1.06(o) of the Investment Services Rules since it may have not informed the Authority of material information concerning the Company immediately upon becoming aware of the matter.

REGULATORY ACTION

On 28 August 2020, the MFSA decided to cancel the Company’s investment services licence by virtue of the powers granted under Article 7(2)(a), (b), (c) and (g) of the Investment Services Act once the transfer of the Company’s investment services business and the transfer of clients’ investment holding is finalised.

The Authority has also decided to proceed with imposing the following directives on the Company with immediate effect to:

  • Refrain from onboarding new investment services clients and accepting new business;
  • Undertake the transfer of the Company’s investment services business and the orderly transfer of the remaining clients’ investment holdings;
  • Maintain proper safeguards of all records relating to MPM’s operations, including its investment services activities. The Company should therefore not destroy, conceal or alter such records in any way which would prejudice the Authority’s functions at law; and
  • Cooperate fully with the Inspector appointed by the Authority in the course of the tasks assigned to him as indicated below.

Furthermore, the Authority has decided to appoint an Inspector to assist the Authority in the fulfilment of its functions at law, particularly to assist with the transfer of the Company’s investment services business as well as, the transfer of the clients’ investment holdings and review the reconciliation exercises as required.

It should be noted that the MFSA’s decision to cancel the Company’s licence may be appealed before the Financial Services Tribunal in accordance with applicable law and shall not become operative until the expiration of the period within which an appeal lies. If an appeal is made within such period, the cancellation shall become operative on the date of the decision of the Tribunal dismissing the appeal or the date on which the appeal is abandoned.

PUBLICATION

This regulatory action is being published in terms of the powers vested in the Authority under Article 16(8) of the Malta Financial Services Authority Act and as part of the Authority’s standard enforcement policy, any administrative sanction, of whatever type.