Corporate Service Providers

A large proportion of members of the IFSP are, to a greater or lesser degree, involved in the provision of corporate services: formation of companies or other legal entities, acting as or arranging for another person to act as a director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities, or provision of registered office services. Some then provide other ancillary client services not formally classified as corporate services, of which there are a plethora.

The corporate service providers’ (CSPs) arena has seen considerable development over the past years, development in which the IFSP has been, and will continue to be, deeply involved.

A new CSP Regulatory Framework

In rebuilding trust in the jurisdiction, a new regulatory regime for CSPs has been launched by the MFSA. This has had a long genesis: the initial CSP Act came into force some time ago. Its second iteration, eventually approved by Parliament last in 2020 and in force since mid-March 2021, took well over a year to reach fruition.

The IFSP has been in discussion with the MFSA constantly over this long gestation period. This engagement has been successful in that the published CSP Act and now, CSP regulations are more suited to actual industry best practice than they would have been without the discussions the IFSP held with the MFSA.

There remains one note of caution: the regulation of CSPs is very new for Malta, and indeed for most of the rest of the world: this is not an activity which typically attracts regulation! Therefore, there is no experience of an existing regulatory regime upon which one may draw. We are learning how to do this as we gain in experience, on the job as it were. The framework will need adjustment and amendment as it hits cold reality through implementation in the real world. The IFSP will remain engaged with the MFSA to navigate through this maturation process.

The documents related to the new regulatory framework for CSPs may be found on the MFSA’s website, by clicking on the following link.

• CSP Framework page: https://www.mfsa.mt/firms/conduct-supervision/company-service-providers/the-new-company-service-providers-regime-in-light-of-act-l-of-2020/

Updated PMLFT Requirements

The risk status of the CSP arena is related mostly to anti-money laundering requirements, which themselves are subject to almost constant development. The IFSP has engaged with the FIAU on the provision of guidance to practitioners for a very long time, as well as providing training in the basic concepts to ensure practitioners have access to at least the main elements of their AML responsibilities.

Over the years, the IFSP has discussed the FIAU’s Implementing Procedures Part 1 (applicable to all subject persons) and Part 2 (applicable to specific sectors of practitioners), and the Register of Beneficial Ownership.

For the past two years, however, that engagement has been focussed upon the Implementing Procedures Part 2 (Guidance for CSPs), with consideration also being given to other elements such as the Financing of Terrorism guidelines and the amended Implementing Procedures Part 1. The IFSP’s PMLFT Sub-Committee, often in conjunction with STEP Malta, has been deeply instrumental in the drafting of the Implementing Procedures Part 2 for CSPs, resulting in a document that is better suited to both the industry and the aims anti-money-laundering regulation seeks to achieve.

The documents relating to AML/CFT requirements for Malta may be accessed through the following links.

• Implementing Procedures (all): Consult all published Implementing Procedures
• Legislation (Maltese and EU): Browse the legislation
• Implementing Procedures Part 2 (CSPs): Get the document
• New Publication (4 May 2021): Enforcement Factsheet: Description in FIAU release