Malta moves closer to being the first with blockchain legislation

The end of a three-week consultation period is set to see the presentation of three bills in parliament which would push Malta a step closer to becoming the first country with blockchain legislation.

These bills are set to be the MDIA bill, which will provide for the establishment of the Malta Digital Innovation Authority, the TAS bill which will set out the regime for the registration of Technology service providers and the certification of ‘technology arrangements’ and the VC bill which will set out a framework for initial coin offerings and the regulatory regime on the provision of services relates to virtual currencies.

Speaking at the launch of the public consultation process Financial Services Parliamentary Secretary Silvio Schembri stated that the consultation process included extensive consultation with all regulatory authorities including MITA, the MFSA, the MGA and the Central Bank. Schembri further stated that there was interest from the global industry including operators in the United States, Europe and Asia.

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A Sell-Off with a long-term impact?

A sell-off that began last week after data in the US showed stronger wage growth, which raised expectations that US interest rates might start to rise more quickly to tackle inflation culminated in a heavy round of selling on Monday in the US that left the Dow Jones Industrial Average Index down 1,175 or 4.6% at the end of Monday’s session. This was the largest decline in percentage terms since August 2011.

Similarly, Asian markets followed suit with Japan’s Nikkei 225 closing down 4.7%. The trend also affected European markets with London, Frankfurt and Paris all falling sharply at the open with losses up to 3% before making up some ground.

Yet business analysts have stated that there are no indications pointing towards a prolonged period of selling although the same analysts did predict a period of more volatile stock markets. Commenting on the BBC Jane Sydenham, Investment Director at the stockbrokers Rathbones stated that the recent moves were a correction and not a crash. Similarly, speaking also to the BBC, Erin Gibbs, Portfolio Manager for S&P Global Market Intelligence stated that, “This isn’t a collapse of the economy. This is concern that the economy is actually doing much better than expected and so we need to re-evaluate”.

This article should not be construed as being investment advice but is intended solely for information purposes.

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The first step towards a Virtual Currency Act

The Malta Financial Services Authority (MFSA) has published its response to the feedback received on the Proposed Regulation of Collective Investment Schemes (CISs’) using Virtual Currencies. In its response the MFSA agreed with the suggestion made by key players within the industry that the new regulatory framework should extend to Alternative Investment Funds and Notified Alternative Investment Funds apart from PIFs. It was also extended for PIFs making investments in Virtual Currencies to limited partnerships and unit trusts apart from investment companies with variable share capital and investment companies with fixed share capital.

Noteworthy is the fact that this framework shall be applicable to all CISs investing in Virtual Currencies no matter what the exposure of such investment is.

The MFSA has chosen to reserve its original position however of making the proposed regime available solely to Qualifying Investors. This has been done in view of the specific risks associated with Virtual Currencies and the underlying technologies.

Commenting on this latest development Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri stated that this was the first step towards having a Virtual Currency Act. He further stated that work was being carried out for regulating virtual currencies, ICO’s, exchanges and the use of blockchain technology.

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Malta places first in personal freedom in business

In a ranking of 153 countries by Forbes, Malta was ranked 38th in terms of business friendliness. Analysts comments that such a result was impressive considering the fact that Malta was the smallest economy within the Eurozone. In the same ranking Malta ranked 1st in personal freedom, 17th in trade freedom, 35th in monetary freedom, 29th in property rights, 38th in innovation, 22nd in technology, 87th in red tape and 49th in investor protection.

In drafting the ranking, a number of different reports where taken into consideration including the World Bank’s Doing Business Report and the World Economic Forum’s annual Global Competitiveness Report.

Malta’s economic growth was also noted in drafting up the said ranking. In the third quarter of 2017 Malta’s economy registered an impressive growth of 7.2% when compared to the corresponding period in 2016.

In the Forbes ranking the United Kingdom topped the list for the first time, up from fifth place last year. Interestingly according to the Autumn Economic Forecast published by the European Commission in November 2017 the relocation of financial services operators from London as a result of Brexit could boost Malta’s GDP, particular in 2019.

At the other end of the scale the bottom worst ranked in the Forbes ranking where Libya, Afghanistan, Haiti, Gambia and Chad.

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MFSA issues Discussion Paper on ICO’s and Coins

The Malta Financial Services Authority (MFSA) recently launched a discussion paper on virtual currencies thus initiating the process which would eventually lead to a policy framework that supports virtual currencies and related technologies. Such a framework would also provide effective protection for investors, financial market integrity and stability.

The consultation process concludes on January 11th 2018, with the MFSA inviting interested parties to submit any feedback via email to vcfunds@mfsa.com.mt.

Virtual currencies such as bitcoin are forms of digital money. Initial Coin Offerings are essentially forms of cryptocurrency crowdfunding, whereby start-ups sell investors a percentage of their newly-issued currency in exchange for fiat money, such as euro or dollars, or more established virtual currencies such as bitcoin.

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War Chest launches new website

War Chest has today launched a new and improved website. The new website which may be viewed on both desktop and portable devices provides the user with information about the services War Chest provides, a useful general overview of Private Foundations in Malta and Corporate Legislation in Malta and general information about Malta as a financial services centre.

The website shall also be providing regular news and updates concerning financial services in Malta, particularly relative for Private Foundations and Maltese Companies.

The same website also enables the user to contact War Chest easily both via a mailing form or via a link to War Chest’s corporate profile on Linkedin.

War Chest’s first website had been launched in 2015. The firm has since then continued to grow and expand.

The launching of the new website was further complimented by a re-branding exercise.

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