​The Malta Financial Services Authority ("MFSA") has issued a consultation paper on the Virtual Financial Assets Rules which will be applicable to Issuers of Virtual Financial Assets to be issued in accordance with the Virtual Financial Asset Act. This consultation document is in line with the MFSA's proposal of issuing a rule book to be titled the "Virtual Financial Assets Rulebook" which will be subdivided into three parts:

  • ​Chapter 1: Virtual Financial Assets Rules for VFA Agents
  • Chapter 2: Virtual Financial Assets Rules for Issuers of Virtual Financial Assets
  • Chapter 3: Virtual Financial Assets Rules for VFA Service Providers

The consultation paper on Chapter 1 has been issued by the MFSA on the 12 July 2018 and closed on the 31 July 2018

The consultation paper on Chapter 2 focuses on four titles which will be applicable to Issuers of Virtual Financial Assets, which are the following:

(i) High-level Principles Issuers are required to act ethically, honestly fairly and professionally and to co-operate fully with the MFSA with emphasis on any applicable law which might be applicable to the issuer.

(ii) Requirements for Issuers The general requirement applicable to issuers include ensuring that at least two persons effectively control its business, this to ensure a dual control principle is adopted. The obligation for the issuer to appoint a VFA Agent, Systems Auditor, Auditor and Money Laundering Reporting Officer are also outlined.

(iii) Initial VFA Offerings and Trading on a DLT Exchange Title 3 outlines the initial and ongoing requirements applicable to Initial VFA Offerings which include the content of the whitepaper and the requirement to register same with the MFSA. This title also sets out the conditions applicable for the admission of certain assets to trading on a DLT Exchange.

(iv) Enforcement and Sanctions Administrative penalties and sanctions which may be imposed by the MFSA are outlined in Title 4 of Chapter 2 of the Rulebook. The consultation is open to the public from 30 July 2018 until 13 August 2018.