S.L. 590.1 Art. 4Exemption from licensing. 

(1) The following persons are hereby being exempted for the purposes of the requirement for a licence for VFA services in terms of article 13 of the Act:

(a) the Central Bank of Malta and the members of the European System of Central Banks (ESCB) and other national bodies performing similar functions in the European Union, other public bodies charged with or intervening in the management of the public debt in the European Union and international financial institutions established by two or more Member States which have the purpose of mobilizing funding and providing financial assistance to the benefit of their members that are experiencing or threatened by severe financing problems;

(b) the competent authority and any person who is appointed thereby in the course and for the purpose of its regulatory and supervisory functions;

(c) a liquidator or a curator in bankruptcy acting in the course of the liquidation or bankruptcy;

(d) persons dealing on own account in terms of the Act and not providing any other VFA services or performing any other activities in virtual financial assets unless such persons:

(i) are market makers; or

(ii) deal on own account when executing client orders:

Provided that persons exempt under paragraphs (f), (g) and (n) are not required to meet the conditions laid down in this point in order to be exempt:

Provided further that for the purposes of this exemption, dealing on own account shall mean the trading by a person in his own name and against proprietary capital resulting in conclusion of transactions in one or more virtual financial assets.

(e) persons who provide VFA services exclusively for their parent companies, for their subsidiaries or for other subsidiaries of their parent undertakings;

(f) a person licensed in terms of paragraph 5(c) of the

First Schedule to the Investment Services Act to act as custodian in relation to a collective investment scheme or holding an equivalent authorisation issued by a European regulatory authority providing services in Malta in exercise of a European right:

Provided that such person shall solely be exempt from the provisions of the Act for the purposes of providing the VFA service listed in paragraph 5 of the Second Schedule to the Act to a collective investment scheme;

(g) A person licensed to provide the services of management of investments in terms of paragraph (4) of the

First Schedule to the Investment Services Act to a collective investment scheme or holding an equivalent authorisation issued by a European regulatory authority providing services in Malta in exercise of a European right:

Provided that such person shall solely be exempt from the provisions of the Act for the purposes of providing the VFA services listed in paragraphs 4 and, or 6 of the Second Schedule to the Act to a collective investment scheme;

(h) a person, being an individual, who manages assets, in terms of paragraph 4 of the Second Schedule to the Act, in relation to a portfolio which includes virtual financial assets, for his spouse, descendants and ascendants in the direct line and their relative spouses, or his brothers and sisters, as long as such portfolio is owned by the person to whom such services are provided and does not constitute a collective investment scheme, and as long as the person providing the service does not do any of the following:

(i) receive, directly or indirectly, any remuneration or other benefit for the service;

(ii) hold himself out as providing a VFA service; or

(iii) solicit members of the public to take such services;

(i) a person who acts as manager, in terms of paragraph 4 of the Second Schedule to the Act, of a portfolio which includes virtual financial assets belonging to him and to no other person, as long as:

(i) such portfolio has not been established for investment purposes in the interest of other beneficiaries where such interest is legally enforceable; and

(ii) such portfolio does not constitute a collective investment scheme;

(j) a person providing a VFA service where that service is provided in an incidental manner in the course of a professional activity and that activity is regulated by legal or regulatory provisions or a code of ethics governing the profession which do not exclude the provision of that service:

Provided that for the purposes of this paragraph, a service shall be deemed to be provided in an incidental manner in the course of a professional activity if the person providing such a service does not:

(i) receive, directly or indirectly, any remuneration or other benefit for the service;

(ii) hold himself out as providing a VFA service; or

(iii) solicit members of the public to take such services;

(k) a person providing investment advice in terms of paragraph 6 of the Second Schedule to the Act, in the course of providing another professional activity not covered by the Act, provided that the provision of such advice is not specifically remunerated;

(l) supranational institutions, such as the European Central Bank, the European Investment Bank, the European Investment Fund, the European Development Finance Institutions and bilateral development banks, the World Bank, the International Monetary Fund and other supranational institutions and similar international organisations, in the event that such institutions or organisations manage collective investment schemes and in so far as those collective schemes act in the public interest;

(m) securitisation special purpose entities;

(n) collective investment schemes licensed under the

Investment Services Act or otherwise authorised by a European regulatory authority, providing services in Malta in exercise of a European right;

(o) a person providing custodian or nominee services in terms of paragraph 5 of the Second Schedule to the Act who is authorised in terms of article 43(3) of the Trusts and Trustees

Act to act as a trustee, provided that such person does not provide any other service in terms of the Second Schedule to the Act; and

(p) the Asset Recovery Bureau in the course of and for the purpose of its functions as delineated in the Proceeds of

Crime Act.

(2) The exemptions laid down in paragraphs (d), (e), (f), (g) and (o) of sub-regulation (1) shall not be automatically operative but their applicability shall be subject to the determination in writing by the competent authority:

Provided that the applicability of the exemption laid down in paragraph (o) shall not exempt such person from satisfying any regulations, rules or authorisation conditions issued by the Authority that such person must satisfy to carry out the service set out in paragraph 5 to the Second Schedule to the Act:

Provided further that the applicability of the exemption laid down in sub-regulation (1)(d) shall be automatically operative in the case of a natural person:

Provided further that any person who intends to benefit from the exemptions laid down under paragraphs (d) or (e) of sub-regulation (1) shall, when requesting a determination in writing from the competent authority, provide a written declaration to the competent authority which shall include a statement on the level of activity which that person plans to conduct, whether such person will be engaging employees to carry out such activity, the business model and the identification details and address of every ultimate beneficial owner:

Provided further that, following the determination in writing from the competent authority, any person benefiting from the exemptions laid down under paragraphs (d) or (e) of sub-regulation (1) shall submit to the competent authority a written declaration, at the end of each calendar year, which shall include the following information:

(a) a statement on the level of activity carried out during the preceding year, which activity would have been licensable had that person not been exempt;

(b) whether such person engages employees to carry out such activity and, if applicable, the number of employees engaged; and

(c) a confirmation that, from the date on which such person obtained a determination in writing from the competent authority in terms of this sub-regulation, there were no changes to the business model and to the information provided to the competent authority on the ultimate beneficial owners.