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Komfie Manalo, Opalesque Asia: The Malta Financial Services Authority (MFSA) is considering the introduction of a Financial Instrument Test as a mandatory requirement under the Virtual Financial Assets Act (VFAA), applicable both within the context of an initial coin offering ('ICO') as well as during the intermediation of distributed ledger technology (DLT) assets, which may qualify as virtual financial assets.
The proposal was put forward after majority of the industry respondents who were asked for feedback about the test have agreed with the MFSA's proposal to introduce the test.
The MFSA said in its latest newsletter, "It is proposed that non-licensed persons providing a service or performing an activity in relation to a DLT asset, in or from within Malta, will also be required to conduct the test to determine the applicable regulatory framework."
The MFSA Discussion Paper on Initial Coin Offerings, Virtual Currencies and Related Service Providers, issued on 30 November 2017, proposed the introduction of a test. The objective of the Test will be that of determining whether a DLT asset, based on its specific features, falls within the ambit of either the traditional European and local financial services legislation or the proposed VFAA or is otherwise exempt from regulation.
As a further step taken by the MFSA towards achieving a comprehensive regulatory framework for the regulati...................... To view our full article Click here
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