Investment Services Rules for Investment Services Providers

Schedule A

Application for an Investment Services Licence

Name of Applicant	Click here to enter text.
Date of submission of application	18 June 2018
Final / Draft	Final ☐	Draft ☐

Table of Contents

Important information concerning Applications for an Investment Services Licence	3

The Applicant Declaration	6

Declaration by the Auditor	7

IT Audit report for Applicants engages in algorithmic trading ONLY	9

Section 1 – Introduction	10

Section 2 – General Information	11

Section 3 – Shareholding Structure/Regulatory History	13

Shareholding Structure	13

Shareholding in Other Entities	14

Regulatory History	15

Capital	16

Section 4 – Nature of Investment Services to be Carried Out	16

Section 5 – Operations	21

Governance & Personnel	21

Operational Set-up	22

Section 6 – Competence	25

Portfolio Managers/Investment Advisors	25

Compliance Officers/MLROs	26

Risk Managers	28

Section 7 – Miscellaneous Information	29

Checklist	31

Guidance Notes	33

Important information concerning Applications for an Investment Services Licence

Part A of the Investment Services Rules for Investment Services Providers should be read carefully before this Application form is completed.

We are required by law to determine applications for Investment Services Licences within six months from receipt of a properly completed application including relevant documentation. However we aim to process applications and take decisions about applications as soon as possible.

In this regard, an Application pack shall be submitted complete and not in a piece-meal fashion. An Application is deemed to have been officially submitted once a full application pack (i.e. the Application Form and all relevant supporting documentation) together with the relevant application fee is submitted to the MFSA. In the instance where application pack is incomplete, the processing of an application will not start and will be delayed until receipt of all the relevant documents and fees concerned.

Applicants are advised to provide comprehensive information regarding the regulated activities the Applicant intends to carry out and how it will be carrying out those activities. The Applicant’s description of its business is an integral part for the processing of the application. The amount of detail submitted should be proportionate to the nature and scale of the business the Applicant intends to carry out and the risks to the Applicant’s clients. It is important that Applicants are transparent with the MFSA at all stages of the application process.

Responsibility for the submission of all relevant information rests with the Applicant. Undue and unjustifiably lengthy delays in the submission of responses from Applicants may result in the requirement to re-submission of documents.

If a licence is granted, its terms will depend (inter alia) upon all the matters and circumstances discussed as part of the Application process. It is therefore essential that all pertinent matters are brought to the attention of the MFSA to enable the Authority to form a complete and thorough understanding of the Application and its proposal.

The provision of false, misleading or inaccurate information or omission of provision of material information may prejudice the status of the application and may also have a bearing on the fitness and properness of the person providing the information. Any person who knowingly or recklessly furnishes information or makes a statement which is inaccurate, false or misleading in any material respect is guilty of an offence under the Investment Services Act 1994.

If, after the Application has been submitted, the Applicant becomes aware that the information submitted has changed or if the Applicant becomes aware of any material fact that affects the information submitted, the Applicant must inform MFSA immediately.

If the proposal changes significantly and materially during the application process, then the processing time may be lengthier than in normal circumstances.

The Application Form and where applicable the supporting documentation can be submitted in draft form. Once the in principle approval for the granting of the licence has been issued by the MFSA and the entity to be licensed has been incorporated, an updated Final Application Form an supporting documents bearing original signatures should be submitted reflecting all comments and changes agreed between the MFSA and the Applicant of the signatory appointed by the Board of Directors during the application review process.

All questions should be answered. In case where replies go beyond the space provided, separate sheets should be used. If the Applicant believes that a question does not apply, the response should be “N/A”. NONE OF THE QUESTIONS ARE TO BE LEFT UNANSWERED.

Hard copies of Applications and supporting documents are to be submitted in either English or Maltese.

Any supporting documents submitted as part of the application pack which are not in either English or Maltese should be translated into one of these languages before submitted to the Authority.

An Application Form is available from MFSA’s web site (www.mfsa.com.mt). Applicants are required to send the Application Form electronically.

Reference should be made to the Glossary to the Investment Services Rules for Investment Services Providers for the definition of certain terms indicated in caps.

The fee structure is shown below. Fees are not refundable.

Application Fee	Supervisory Fee
EUR	EUR
Category 1a	2,500	For revenue up to EUR50,000	2,0000
Further tranches of EUR50,000 up to a maximum of EUR1,000,000	350 per tranche or part thereof
Category 1b	3,000	For revenue up to EUR50,000	2,750
Further tranches of EUR50,000 up to a maximum of EUR1,000,000	350 per tranche or part thereof
Category 2	5,000	For revenue up to EUR250,000	4,500
Further tranches of EUR250,000 up to a maximum of EUR5,000,000	400 per tranche or part thereof
Category 3	7,000	For revenue up to EUR250,000	6,000
Further tranches of EUR250,000 up to a maximum of EUR5,000,000	400 per tranche or part thereof
Category 4a	17,000	15,000
Category 4b	7,500	5,000
DRSP	To be determined based on the proposal

The Applicant Declaration

The Applicant Firm hereby confirms that it is responsible for this application for authorisation including compliance with the authorisation requirements as set out in Part A and Part BI (as applicable) of the MFSA Rules for Investment Services Providers which provide services in terms of the Market in Financial Instruments Directive. The Applicant Firm warrants that it has truthfully and fully answered the relevant questions in this form and disclosed any other information which might reasonably be considered relevant for the purpose of the application. The Applicant Firm warrants that it will promptly notify the Authority of any changes in the information it has provided and will supply any other relevant information which may come to light in the period during which the application is being considered and, if the application is accepted, thereafter.
Date:
Signed:	Position:
Signed:	Position:
For and on behalf of: (Please print name of the Applicant Firm. At least two directors, including the managing director, must sign the declaration if the Company is already in existence. Original signatures are required.)
NOTE: Provisions in this document should not be deleted nor amended in any manner. It is a criminal offence under article 22(2) of the Investment Services Act to knowingly or recklessly provide false or misleading information or make false or misleading statements in relation to an application for authorisation.

Declaration by the Auditor

Date:	18 June 2018

To:	The Director – Authorisation Unit

Malta Financial Services Authority

Notabile Road

Attard BKR 3000

Dear Sir/Madam

Re: Click here to enter text.

[“the Applicant”]

This letter is to confirm that the Auditing Firm described below has agreed to accept appointment as auditor of the Applicant.

Click here to enter text.

[“the Auditing Firm”]

We are pleased to confirm that:

We hold adequate and appropriate Professional Indemnity insurance in the context of the application;

We are members of the following professional bodies/associations:

Click here to enter text.

The information provided in respect of the business plan (or financial projections) has been properly prepared on the basis of the assumptions stated in the plan (or projections) by the directors of the Applicant (or managing partners) for which they are solely responsible;

We have satisfied ourselves that the statement of financial resources (included with the business plan or financial projections) has been prepared in accordance with these Rules;

In accordance with article 18 of the Investment Services Act, we undertake to report immediately to the MFSA any fact or decision about which we become aware in our capacity as auditor which:

Is likely to lead to a serious qualification or refusal of our audit report; or

Constitute or is likely to constitute a material breach of the legal or regulatory requirements applicable to the Applicant in or under this Act; or

Gravely impairs the ability of the Applicant to continue as a “going concern”, or which;

Relates to any other matter which has been prescribed;

Moreover, in terms of the said Act we also hereby undertake to likewise report to the MFSA any fact or decisions as specified above pertaining to any person having close links with the Applicant, of which we become aware in our capacity as auditor of the Applicant and of a person having close links with the former;

We shall, as requested by the Applicant, report to the MFSA in accordance with the applicable requirements of the Investment Services Rules for Investment Services Providers issued by the Malta Financial Services Authority;

Our responsibilities as auditor of the Applicant have been defined in a signed letter of engagement which has been confirmed in writing by the Applicant and the said letter of engagement includes the matters specified in the Investment Services Rules;

The Applicant satisfies the applicable financial resources requirements stipulated by the Investment Services Rules.

Yours faithfully,

Name:	Click here to enter text.
Signature:
Title	Click here to enter text.

IT Audit report for Applicants engages in algorithmic trading ONLY

Date:	18 June 2018

To:	The Director – Authorisation Unit

Malta Financial Services Authority

Notabile Road

Attard BKR 3000

Dear Sir/Madam

Re: Click here to enter text.

[“the Applicant”]

This letter is to confirm that the Auditing Firm described below has agreed to accept appointment as auditor of the Applicant.

Click here to enter text.

[“the Auditing Firm”]

We are pleased to confirm that we held an adequate and appropriate assessment of suitability of the IT systems for providing algorithmic trading in the context of the application in accordance with the COMMISSION DELEGATED REGULATION (EU) of 19.7.2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the organisational requirements of investment firms engaged in algorithmic trading;

We are members of the following professional bodies/associations:

Click here to enter text.

The information provided in respect of the business plan and relevant systems have been properly prepared on the basis of the assumptions stated in the plan by the directors of the Applicant (or managing partners) for which they are solely responsible;

Yours faithfully,

Name:	Click here to enter text.
Signature:
Title	Click here to enter text.

Section 1 – Introduction

This section requests contact details of the promoters behind the application and their legal/professional consultants.

While the MFSA will send correspondence regarding the Application to the Applicant through the appointed legal/professional consultants, all correspondence will be copied to the Applicant who will be considered responsible for any information submitted to the MFSA.

Promoters behind this Application:

Name:	Click here to enter text.
Address:	Click here to enter text.
E-Mail Address:	Click here to enter text.
Telephone:	Click here to enter text.
Fax:	Click here to enter text.

Main Contact person(s) of the Applicant responsible for this Application:

Name:	Click here to enter text.
Address:	Click here to enter text.
E-Mail Address:	Click here to enter text.
Telephone:	Click here to enter text.
Fax:	Click here to enter text.
Capacity:	Click here to enter text.

Contact details of legal/professional consultant (where applicable):

Name:	Click here to enter text.
Address:	Click here to enter text.
E-Mail Address:	Click here to enter text.
Telephone:	Click here to enter text.
Fax:	Click here to enter text.
Capacity:	Click here to enter text.
Permission for the MFSA to liaise with the named consultant in respect of this application

Section 2 – General Information

This section requests general information regarding the Applicant

2.1 Full legal name of the Applicant (this is the name that will appear in the Investment Services Licence, if granted) and Legal Entity Identifier ( LEI) :

Legal Name	LEI

2.2 Does the Applicant intend to use any trading name as well as the name given in Q. 2.1 above.

Choose an item.

If Yes, please indicate trading name:

2.3 Is the Applicant an entity in formation? Choose an item.

If Yes, Please indicate:

Anticipated registered address:

Anticipated business address (if different from anticipated registered address) including any offices in Malta from where investment business will be transacted:

Anticipated legal form of the Applicant:

Details of the Auditor to be appointed by the Applicant:

Name:
Address:
E-Mail Address:
Telephone:
Fax:

If No, Please indicate

Date of incorporation/registration of the Applicant:

Company/Partnership Registration number:

Registered Address:

Business address/es (if different from registered address):

Email:
Telephone:
Fax:
Web-Site Address:
Legal Form of the Applicant:

Has the Applicant ever been known by another name? If Yes, please advise names by which the Applicant has been known previously:

Details of the Applicant’s Auditor:

Name:
Address:
E-Mail Address:
Telephone:
Fax:
Date of Appointment:

Please indicate whether there has been any change in Auditor in the past 5 years:

Business:

Please state whether the Applicant has had other principal bankers during the three years prior to the date of this Application.

Please submit certified true copies of constitutional documents and copies of recent audited accounts.

Section 3 – Shareholding Structure/Regulatory History

This section regards who controls/owns the Applicant or is in a position to influence the business of the Applicant – directly or indirectly.

Shareholding Structure

3.1 Please submit a detailed organisational structure, showing:

The names of all shareholders

Whether the respective shareholder/s are individuals or corporate entities

Indicating their respective shareholding and voting rights (example: any rights regarding the appointment of Directors on the board of the Applicant)

Indicating their respective regulatory status, as applicable.

Please refer to Guidance Note 1 at the back of this Application Form.

3.2 Insert ALL Proposed Shareholders/Partners/Controllers of the Applicant (upon issue of licence).

Name of Shareholders/Partners/ Controllers	Qualifying Shareholding	Direct/ Indirect Shareholding	Ordinary/ Preference Shares	% Voting Rights	Control/Voting Powers (e.g. appointment of Directors etc.)

3.3 Does the Applicant have any Qualifying Corporate Shareholders?

Choose an item.

If Yes, please provide the following information about any shareholder/partner in the Applicant that is a qualifying shareholder/partner:

Name of Corporate Shareholder/Partner:
Date of Incorporation:
Country of Incorporation:
Registration/Reference Number:
Registration Address:
Nature of Activities:

Regulated? (If yes please provide details of the regulatory status and the regulatory authority (wherever located) to which this entity reports now or has reported to during the last 10 years)

Directors/Partners:
Qualifying Shareholders:
Name:
% Voting Rights:

3.4 Please confirm the names of the ultimate beneficial owners of the Applicant:

3.5 Please confirm whether the identity of the ultimate beneficial owners of the Applicant is/will be verifiable from public records:

3.6 Please advise the source of funds for the Applicant’s capital contribution.

Shareholding in Other Entities

3.7 Does the Applicant have any Qualifying Shareholding in any Company? (If Yes, please provide details)

Choose an item.

3.8 Kindly provide details of any persons (other than those referred to in Questions 3.4 and 3.8) which have Close Links with the Applicant.

3.9 Please list below all regulatory or licensing authorities (wherever located) to which, the Applicant or any of its Qualifying Shareholder including, related entities via common shareholders or entities in which the Applicant has a Qualifying Shareholding report now or have reported to during the last 10 years.

Name:
Relationship to Applicant:
Country or countries concerned:
Nature of licensed activities:
Regulatory Authority:

Regulatory History

3.10 Is the Applicant or any of its beneficial owners or qualifying shareholders or any Company/Partnership in which the Applicant has a qualifying shareholding awaiting a decision about a licence application submitted elsewhere?

Choose an item.

If Yes, please give full details (e.g. name of regulatory authority; nature of regulated activities applied for; status of the application etc…)

3.11 Please provide details of any licence application made by:

- the Applicant

- Qualifying Shareholder (corporate or non-corporate) in the Applicant

- any Company/Partnership in which the Applicant has a Qualifying Shareholding

- to any regulatory authority or licensing authority (wherever located)

which was withdrawn before a decision was given or which was refused.

Relationship to Applicant:

Country or Countries concerned:

Nature of licensable activities:

Regulatory Authority:

Reason for withdrawal:

Reason for refusal:

Capital

3.12 Amount and currency of proposed share capital or total contribution (upon issue of licence):

Authorised Share Capital:
Issued/Paid Up Share Capital:
Total Contribution:

Please provide evidence of paid-up share capital and other types of capital raised.
Please provide a copy of all relevant agreements and contracts regarding the capital raised.
Does the Applicant use or expects to use borrowed funds?
Yes
No
If yes, please complete the following table:
Facility	Details
Please provide details of the sources of financial resources expected to be available should they be required by the applicant firm subsequent to authorisation.

Section 4 – Nature of Investment Services to be Carried Out

This section requests information regarding the activities the Applicant intends to carry out

4.1 Please indicate the Category of Investment Services Licence for which the Applicant is applying:

Category	Select
1A	Receive and transmit orders in relation to one or more instruments and, or provide investment advice and, or place instruments without a firm commitment.	Choose an item.
1B	Receive and transmit orders, and, or provide investment advice in relation to one or more instrument, and, or place instruments without a firm commitment.	Choose an item.
2	Provide any investment service and to hold or control clients’ money or customer’s asserts, but not top operate a multilateral trading facility or deal for their own account or underwrite or place instruments on a firm commitment basis.	Choose an item.
3	Provide any investment service and to hold and control clients’ money or customers’ assets.	Choose an item.
4	Act as Trustee or Custodians of Collective Investment Schemes.	Choose an item.

4.2 Please mark as ‘YES’ the appropriate boxes to show what licensable activity the Applicant proposes to undertake:

Dealing on own account	Execution of orders on behalf of other persons	Reception and Transmission of Orders	Management	Investment Advice	Nominee	Placing of instruments without a firm commitment basis	Underwriting/placing of instruments on a firm commitment basis	Trustee/Custody	Operation of an MTF	Operation of an OTF
Transferable Securities	-	-	-	-	-	-	-	-	-	-
Money Markey Instruments	-	-	-	-	-	-	-	-	-	-
Units in collective investment schemes	-	-	-	-	-	-	-	-	-	-
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivative instruments, financial indices or financial measures which may be settled physically or in cash	-	-	-	-	-	-	-	-	-	-
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event)	-	-	-	-	-	-	-	-	-	-
Options, futures, swaps, and any other derivative contracts relating to commodities, that can be physically settled provided that they are traded on a regulated market, within the meaning of the Financial Markets Act and, or a Multilateral Trading Facility within the meaning of Schedule 1 to the Act	-	-	-	-	-	-	-	-	-	-
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities that must be settled not otherwise mentioned in point 6 above and not being for commercial purposes, which have the characteristics of other derivative financial instruments.	-	-	-	-	-	-	-	-	-	-
Derivative instruments for the transfer of credit risk	-	-	-	-	-	-	-	-	-	-
Rights under a contract for differences or under any other contract the purpose or intended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price for property of any description or in an index or other factor designated for that purpose in the contract	-	-	-	-	-	-	-	-	-	-
Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event) as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Schedule, which have the characteristics of other derivative instruments, having regard to whether, inter alia, they are traded on a regulated market within the meaning of the Financial Markets Act or a Multilateral Trading Facility within the meaning of Schedule 1 to the Act, are cleared and settled through recognized clearing houses or are subject to regular margin calls	-	-	-	-	-	-	-	-	-	-
Certificates or other instruments which confer property rights in respect of any instrument falling within Schedule 2 to the Act
Emission allowances, consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).	-	-	-	-	-	-	-	-	-	-
Foreign exchange acquired or held for investment purpose	-	-	-	-	-	-	-	-	-	-

4.3 Please mark as ‘YES’ the appropriate boxes to show the nature of the clients to be serviced by the Applicant

Dealing on own account	Execution of orders on behalf of other persons	Reception and Transmission of Orders	Management	Investment Advice	Nominee	Placing of instruments without a firm commitment basis	Underwriting/placing of instruments on a firm commitment basis	Trustee/Custody	Operation of a Multilateral Trading Facility
Retail Clients	-	-	-	-	-	-	-	-	-	-
Professional Clients (including collective investment schemes)	-	-	-	-	-	-	-	-	-	-
Professional Clients (excluding collective investment schemes)	-	-	-	-	-	-	-	-	-	-
Collective Investment Schemes	-	-	-	-	-	-	-	-	-	-
Eligible Counterparties	-	-	-	-	-	-	-	-	-	-

4.4 Does the Applicant intend to also carry out unregulated activities? (If Yes, please provide details)

Choose an item.

4.5 Please indicate whether the Applicant intends to provide any ancillary services in accordance with Annex I Section B of Directive 2014/65/EU

Retail Clients	Professional Clients (including collective investment schemes)	Professional Clients (excluding collective investment schemes)	Collective Investment Schemes	Eligible Counterparties
Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level	-	-	-	-	-
Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction	-	-	-	-	-
Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings	-	-	-	-	-
Foreign exchange services where there are connected to the provision of investment services	-	-	-	-	-
Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments	-	-	-	-	-
Services relating to underwriting	-	-	-	-	-
Investment services and activities as well as ancillary services of the type included under Section A or B of Annex I related to the underlying of the derivatives included under points (5), (6), (7) and (10) of Section C where these are connected to the provision of investment or ancillary services	-	-	-	-	-

Section 5 – Operations

This Section relates to information regarding the operational set up of the Applicant, in particular who will be doing what, and from where, that is where duties and responsibilities reside and how the Applicant intends to carry out its operations and from where. It is important that comprehensive details are provided in this Section, which should also take into account the information provided in Section 4 – Activities

Governance & Personnel

5.1 Please give a detailed staff organisational chart showing the ‘mind and management’ of the Applicant i.e. the proposed Board of Directors, the Chief Executive Officer (or equivalent), the senior management (persons who are under the immediate authority of the board of directors or the CEO of the Applicant, and who exercise managerial functions) and proposed staff set-up (proposed titles) and indicating the responsibilities and duties of each staff member, including employees to be involved in the provision of investment services and the respective reporting lines. If particular key positions have not yet been filled, please insert the proposed job title instead of the name of the employee, indicating also the number of anticipated personnel for each position (e.g. Investment Advisors – 2). Please also specify where employees are to assume multiple roles.

The organisational chart should be supported with a detailed description of who will be doing what and from where with reference to the activities the Applicant is applying to carry out. Such description should also include reference to the Compliance Officer & MLRO functions as well as any marketing functions to be done by the Applicant.

The organisational chart should also show where the individuals thereon will be based.

A Personal Questionnaire Form [*] should be completed by each board member, senior manager (including the CEO or equivalent), the Money Laundering Reporting Officer, the Compliance Officer and other key functionaries including personnel carrying out the investment services activities of portfolio management. Individuals to be appointed as Investment Advisors are required to submit a detailed Curriculum Vitae.

5.2 Please indicate the names of the Directors on the Board/Partners of the Applicant, indicating also the date of appointment (if Applicant has already been formed)

Name of current/proposed Director/Partner	Current/Proposed	Date of Appointment

5.3 For each current/ proposed Director/ Partner, please indicate if any further appointment(s) as a director other than that with the Applicant are currently held

Name of current/proposed Director/Partner	Existing appointments	Date of Appointment	Non-executive or executive function

5.3.1 With respect to current involvements, please specify how the current/ proposed members of the Management Body will be ensuring segregation of duties, sufficient time commitment and mitigate any potential conflict of interest which may arise from the relationships/interests from the existing posts held.

Name	Time Commitments	Relationships/ Interests
Monthly	Annual

Operational Set-up

5.4 If the Applicant has already been formed, please identify any Directors or Partners who have resigned or not sought re-appointment during the previous ten years.

5.5 If the Applicant has already been formed, please identify any Directors who have been dismissed during the previous ten years.

5.6 Does the Applicant intend to appoint an Internal Auditor? (If no, please refer to the relevant procedure to be followed as detailed in the Guidance Notes to the ISR for ISP in case of any requests for exemption for the applicable requirement).

5.7 Does the Applicant intend to appoint any internal committees (e.g. Investment Committee; Risk Management Committee)?

Choose an item.

If No, please comment:

If Yes, please provide details and the respective Terms of Reference:

5.8 What are the staffing intentions of the Applicant at start up stage versus the medium term (3 years)?

5.9 Please comment on the intended staffing and operational set-up at the outset versus the anticipated business of the Applicant (with reference to Volume & Nature)

5.10 Please indicate in which countries the Applicant intends to provide its investment services.

5.11 If the answer to Q. 5.10 above includes the provision of investment services in countries other than Malta, please describe how the Applicant intends to carry on investment business outside of Malta. In this regard, please indicate:

Whether this is to be done through a branch office or otherwise (please give details)

Whether any authorisation will be sought in the respective jurisdiction for the provision of the activities in that jurisdiction

Who will be carrying out activities in the name of the Applicant?

5.12 Please indicate whether the Applicant intends to passport any regulated activities into another EEA State indicating under which Directive:

Choose an item.

Applicable Directive:

If Yes, please indicate the manner in which passporting will be undertaken:

Providing cross border services; and/or Choose an item.

Establishing a branch; and/or	Choose an item.

Appointing a tied agent	Choose an item.

Please also indicate the countries where the Applicant intends to passport any of its activities and what would be the activities in question.

NB. Any details provided here would not exonerate the Applicant from the requirements and procedures outlined in the relevant Passporting Regulations, which would need to be followed if a licence is issued.

5.13 Please indicate whether the Applicant intends to offer any of its services on-line.

If this is the case, the Applicant is required to complete an IT Questionnaire (available upon request from the Authorisation Unit)

Choose an item.

If Yes, please provide details:

5.14 Please indicate whether the Applicant intends to outsource any of its activities in connection with its regulated business:

Choose an item.

If Yes, please indicate:

What activities are to be outsourced and to whom including its’ regulatory status, as applicable;

How the Applicant will monitor the outsourcing of any regulated activity

Please also provide copies of the respective outsourcing agreements

5.15 In the absence of key individuals – particularly those involved in the provision of investment services (in particular investment advisors and portfolio managers, as applicable), please describe the arrangements which the Applicant will put in place to ensure that clients’ needs will be satisfied on an on-going basis.

5.16 Please include a brief description of the business continuity and disaster recovery plans for the business and its IT systems.

5.17 Please provide the name/s and address/es of bank(s) with whom the Applicant intends to carry out banking business and/or with whom the Applicant intends to maintain client accounts distinguishing between the two. Only Category 2 to 4 Licence Holders are permitted to hold a client account.

Section 6 – Competence

The purpose of this Section is for the Authority to be provided with information regarding the proposed employees of the Applicant to be involved in key functions of money laundering reporting, compliance duties, risk managers as well as the provision of investment advice and/or portfolio management.

Portfolio Managers/Investment Advisors

Please refer to Guidance Note 2 at the back of the Application Form

Where already identified, please complete the following questions for each employee intended to carry out the provision of investment advice, portfolio management

6.1 Name of Proposed Employee

6.2 Activity to be carried out	Portfolio Management: Choose an item.

Investment Advice: Choose an item.

6.3 Please indicate in relation to which instruments the selected activity will be provided:

All those indicated in Q. 4.2	Choose an item.

If No, please indicate in relation to which instruments from those indicated in Q. 4.2

6.4 Have you ever provided the activity indicated in Q. 6.2 with a regulated entity?

Choose an item.

If yes, to specify: with which entity, the jurisdiction and the period in question:

Entity:
Jurisdiction:
Period:
Authority:

6.11 To include any other details relating to the basis on which the Applicant is considered competent in relation to the proposed activity as considered appropriate.

Compliance Officers/MLROs

Please refer to Guidance Note 2 at the back of the Application Form

Where already identified, please complete the following questions for each employee to be appointed as Compliance Office and/or MLRO:

6.12 Name of Proposed Employee

6.13 Have you ever acted as Compliance Officer and/or MLRO with a regulated entity?

Choose an item.

If yes, to specify: with which entity, the jurisdiction and the period in question:

Entity:
Jurisdiction:
Period:
Authority:

6.14 Have you ever been authorised/approved by any regulatory authority to act as Compliance Officer and/or MLRO of a regulated entity?

Choose an item.

If yes, to specify by which authority and the period in question, including any restrictions / limitations of such authorisation.

Entity:
Jurisdiction:
Period:
Authority:

6.19 To include any other details relating to the basis on which the Applicant is considered competent in relation to the proposed activity as considered appropriate.

Risk Managers

Please refer to Guidance Note 2 at the back of the Application Form

Where already identified, please complete the following questions for each employee to be appointed as Risk Managers:

6.20 Name of Proposed Employee

6.21 Have you ever acted as Risk Manager with a regulated entity?

Choose an item.

If yes, to specify with which entity, the jurisdiction and the period in question:

Entity:
Jurisdiction:
Period:

6.22 Have you ever been authorised/approved by any regulatory authority to act as Risk Manager?

Choose an item.

If yes, to specify by which authority and the period in question, including any restrictions/limitations of such authorisation.

Entity:
Jurisdiction:
Period:
Authority:
Restrictions:

6.28 To include any other details relating to the basis on which the Applicant is considered competent in relation to the proposed activity as considered appropriate.

Section 7 – Miscellaneous Information

7.1 Has a petition for bankruptcy or compulsory winding up or sequestration been made against the Applicant if already formed/constituted or any person listed in Q. 1.1, Sections two, three and five at any time?

7.2 Has the Applicant is already formed/constituted, at any time, had a receiver, administrator, or liquidator appointed; failed to satisfy a debt adjudged due; or come to a comprise or similar arrangement with any of its creditors, whether as a result or insolvency or otherwise?

7.3 Has any body corporate, partnership or unincorporated association with which the Applicant is already formed/constituted is or was associated as director, Qualifying Shareholder, manager, Company/Partnership secretary or representative, or any person listed in Q. 1.1, Sections two, three and five been compulsorily wound up; or had an administrator, receiver or liquidator appointed; or made a compromise or similar arrangement with its creditors; or ceased trading in circumstances where its creditors did not receive (or have not yet received) full settlement of their claims?

7.4 Has the Applicant if already formed/constituted or any body corporate, partnership or unincorporated association with which it is or was associated as director, Qualifying Shareholder, manager, Company/Partnership secretary or representative, or any person listed in Q. 1.1, Sections two, three and five been investigated by any Authority, regulatory or professional body (excluding investigations conducted in the course of normal monitoring and surveillance procedures which had no adverse findings)?

7.5 Has the Applicant if already formed/constituted or any person listed in Q. 1.1, Sections two, three and five or any body corporate, partnership or unincorporated association with which it is or was associated as director, Qualifying Shareholder, manager, Company/Partnership secretary or representative, ever been criticised, censured, disciplined, expelled, fined or been the subject of any disciplinary action by any Authority, regulatory or professional body whether in Malta or abroad?

7.6 Have any books and records of the Applicant or any body corporate, partnership or unincorporated association with which it is or was associated as a director, Qualifying Shareholder, manager, Company/Partnership secretary or representative, or any person listed in Q. 1.1 or Sections two, three and five, ever been requisitioned or seized by any court, Authority, regulatory or professional body whether in Malta or abroad?

Supplementary Requirements for Applicants intending to distribute contracts for differences (CFDs) and/or rolling spot forex contracts under the MiFID regime (jointly referred to for the purpose of this section as “Trading Organisations”)

Please indicate what best describes the type of forex related activity that the Applicant intends to carry out:

-	Market Maker/ Dealing on own account:

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-	Riskless Principal (i.e. the Applicant is to be involved in executing two matching trades (one with the client and one offsetting trade with another principal) entered at the same time and price, with the entity acting as counterparty to both transactions):

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-	Direct Market Access Straight Through Processing (DMA STP) Broker:

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-	Provider of an Electronic Communication Network (ECN):

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Note: The Applicant should provide a comprehensive step by step overview of how the activities will be undertaken in practice

Will the Applicant have a dealing desk?

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If the Applicant is to act as a DMA STP Broker, will the Agreements to be entered into with the Liquidity Providers be standardised?

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If Yes, please provide details of the standard characteristics of the facility to be provided as well as an indication of the Liquidity Providers to be appointed (by name or characteristics):

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If No, please confirm as to whether in certain instances the Broker will act as counterparty to client transactions (even if entering into back-to-back transactions):

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If the Applicant is to act as a DMA STP Broker or a provider of an ECN, please provide details of the depth of market (DOM) anticipated to be offered by the Applicant’s facility i.e. the anticipated number of liquidity providers on the facility:

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Please specify the target market of the Applicant for the usage of the online forex trades:

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Please indicate the online trading platforms that will be used by the Applicant including whether these are off-the-shelf / be/spoke.

To include general details of the software provider:

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Is the system already in use by other regulated entities?

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Will the company be offering auto trading software facilities? If Yes, please elaborate:

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Please indicate the nature of the forex contracts including whether services will be provided in relation to rolling spot forex contracts.

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Please indicate whether the client will deposit funds in an account with the Applicant or else with other authorised brokers.

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Please indicate if clients’ funds will be held by the Applicant, whether the Applicant will create different accounts depending on the type of client and with different conditions and restrictions attached to each account.

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Please indicate details regarding any leverage to be allowed and any restrictions to be imposed by the Applicant.

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Checklist

Enclosed The following information should be provided with the application:

The Covering Letter	-

The appropriate application fee (which is not refundable)	-

The Auditor’s Confirmation	-

Supporting Board Resolution – in draft or in final form duly signed	-

Financial Resources Statement	-

Projected Profit and Loss Account and Balance Sheet for the three years after the	-licence is issued

Where appropriate, copies of the las three years audited accounts of the Applicant	-

Memorandum and Articles of Association or Partnership Agreement (draft or	-Executed) of Applicant as appropriate

Detailed Business Plan which should include as a minimum:

background details about the Applicant and any affiliated entities including	-

their respective regulatory status and previous business history;

its target clients;	-

the Applicant should attach a chart which illustrates the internal operational	-

structure of the Applicant’s business (this should show names, reporting lines

and roles);

detailed description of the proposed operational set up – personnel and internal	-

controls;

the location of the business;	-

the Applicant’s plans anticipated level of business and its plans for the future;	-

if a part of a group and its’ role within that group where the Applicant Company/	-

Partnership forms part of a Group, please provide a diagram showing the relationships

between the Applicant and other members of the Group. The “family tree” submitted

should give details up to the ultimate beneficial owner(s), showing percentage sizes of

holdings in each entity; unless (a) the entity has one ultimate beneficial owner with a

holding of over 50% of the voting rights or (b) no less than fifty ultimate beneficial

owners who between them account for over 50% of the voting rights. If (a) or (b) apply,

it will only be necessary to give details of the ultimate beneficial owners with holding

of 10% or more;

rationale for applying for a licence;	-

at inception and the anticipated yearly development of such set-up for the first three	-

years of operation

marketing plan;	-

governance of the Applicant;	-

systems to be used;	-

business Strategy;	-

outsourcing arrangements.	-

Specimen copies of the insurance policies and draft schedule/cover note (where applicable),	-

and ‘Insurance Checklist’

Personal Questionnaire forms (see Schedule F of these Rules) for each Qualifying Shareholder,	-

Director and Senior Officer of the Applicant

Memorandum and Articles of Association of Immediate and Ultimate corporate shareholders	-

of the Applicant and audited accounts thereof

Draft Auditor Engagement Letter to be submitted as part of Application Documents	-

A detailed shareholding structure of the Applicant, showing:

the names of all shareholders	-

whether the respective shareholder/s are individuals or corporate	-

indicating their respective shareholding and voting rights (including any rights	-

regarding appointment of Director with the Applicant)

indicating their respective regulatory status as applicable	-

Evidence substantiating the competence of the proposed individual/s	-

IT Questionnaire (where applicable)	-

In case of Online Forex Applicants:

Overview of how services are to be provided	-

Details regarding the systems to be used	-

Specimen copies of agreements to be entered into with clients and with market	- makers/liquidity providers respectively

Guidance Notes

Shareholding Structures

In the case of complex shareholding structures, the information in Q. 3.1 should be provided in relation to all levels of shareholdings up to the ultimate shareholding entities/individuals.

Applicants are urged to contact the Authorisation Unit for guidance regarding the documents that need to be submitter in relation to or by the shareholders involved. However, in general the following documents need to be submitted:

Immediate and Ultimate Corporate shareholders within the shareholding chain are required to complete a Corporate Shareholders Questionnaire (Available for the Authorisation Unit) and also submit copies of their constitutional documents and audited accounts for the previous three years of operation.

The Directors of any immediate qualifying corporate shareholders within the shareholding chain are required to complete a Personal Questionnaire (‘PQ’) if that corporate shareholder is not regulated within EU/EEA or a recognised jurisdiction.

In cases where a qualifying shareholding is held through a trust arrangement, the Trustee needs to be a regulated entity and the following documents/confirmations are required to be submitted:

Trust deed (or relevant extract therefrom)

Details of the regulatory status of the Trustee

PQs of the settlor and the beneficiaries of the Trust

Declarations from the Trustee that it will notify the MFSA if it intends to resign as Trustee of the Trust in question and before making any changes/distributions to the beneficiaries named in the trust deed.

The Qualifying Shareholder of an Applicant are required to complete a Personal Questionnaire.

Qualifying Shareholders are any individuals who (1) hold 10% or more of the shares in the Applicant firm or its parent; or (2) is able to exercise significant influence over the management of the Applicant firm through a controlling interest in the Applicant firm or its parent; or (3) is entitled to control or exercise control of 10% or more of the voting power in the Applicant firm or its parent; or (4) is able to exercise significant influence over the management of the Applicant firm through their voting power in it or its parent.

Qualifying Shareholders include the ultimate beneficial owners of the Applicant and/or any other person who, alone or together with others, is in a position to exercise control over the Applicant.

Competency

The onus to prove the competence of an employee is on the Applicant. If Section 6 is completed by a mere cross reference to the respective Personal Questionnaire or CV, the Application Form will not be deemed as being fully completed and this may delay the processing of the Application.

Applicants are required to provide the Authority with any evidence that they may have to substantiate the quoted experience and qualifications relevant to the position in question.

Evidence can take various forms as the Applicant deems fit and may be in a position to provide. Evidence to substantiate qualifications held (unless the qualification in question is not one of those listed on the MFSA website can include but not limited to the submission of certified true copies of the qualification/s in question and official description of the	qualification concerned (e.g. detailed transcripts and/or official brochures issued by the respective educational institution). Evidence to substantiate work-related experience relevant for the position in question can take the form of exit references from previous employments or approvals given by other regulators etc.

In submission of references, MFSA expects references to be submitted by professional people independent from the person involved. In addition the reference should indicate:

The length of the relationship between the referee and the referenced

The basis on which the assertions in the regard of the individual concerned are being made (e.g. employment of x number of years; trading together for x number of years etc…)

Ideally referees should be individuals coming from regulated entities occupying senior positions of trusts therein and relevant to the position in respect of which the reference is being issued

A clear opinion regarding the competence of the individual concerned as required for the position being applied for within the MFSA

References should be submitted on proper letterheads, in original and signed by the respective individual concerned/properly authenticated as appropriate

Inn case of doubt, Applicants are encouraged to discuss with the MFSA when preparing application packs.

MFSA reserves the right to request any additional information that is deemed relevant in the competence.

The information provided to the MFSA is without prejudice to any independent checks and verification that the MFSA may carry out and to any requests for any other documentation that it may deem appropriate for the processing of the Application.