MALTA Law and Practice Contributed by: Ian Gauci and Cherise Abela Grech, GTG Legal
2.15 Financial Action Task Force Standards
characteristics a crypto-asset must have in order for it to be classified as an NFT, so it is essential to determine the correct legal classification of the crypto-asset. 2.14 Impact of AML and Sanctions Rules AML and sanctions regulations significantly impact both regulated and unregulated fintech companies in Malta. Since 2022, the EU has imposed significant sanctions in relation to the Russian invasion in Ukraine and thus service providers are required to remain updated as to the specific limitations and requirements in rela - tion to the services they can offer to Russian companies and persons. Furthermore, robust AML frameworks to combat financial crimes are implemented under Maltese law. These regulations require fintech companies to implement stringent customer due diligence, monitor transactions for suspicious activity, and report any such activities to the FIAU. This all aligns with international standards set by organi - sations like the Financial Action Task Force (FATF). Non-compliance with AML regulations can lead to severe penalties, including administrative fines, criminal charges, revocation of licences, and reputational damage. The MFSA has the authority to impose sanctions on entities that fail to adhere to AML requirements. Overall, AML and sanctions rules in Malta impose significant compliance obligations on both regulated and unregulated fintech compa - nies. Adherence to these regulations is crucial to avoid legal penalties and to maintain the integrity and reputation of the financial sector.
Malta’s AML and sanctions rules closely follow the standards set by the FATF. As a member of the EU, Malta aligns its AML framework with both FATF recommendations and EU directives, particularly the EU’s Anti-Money Laundering Directives (AMLD). 2.16 Reverse Solicitation The principle of reverse solicitation is implement - ed in Malta in line with its interpretation under the MiFID II Directive. With the implementation of MiCA, it is also important to note that this princi - ple is also recognised in relation to the provision of services by CASPs. However, through issued guidelines, the European Securities and Markets Authority (ESMA) has hardened its stance on the applicability of this concept. MiCA makes it clear that reverse solicitation cannot be overridden by contractual terms or disclaimers, and also intro - duces a time limit on the validity of a reverse solicitation request. 3. Robo-Advisers 3.1 Requirement for Different Business Models The MFSA has yet to issue tailor-made rules regulating robo-advisers. However, ESMA has issued guidelines on certain aspects of the MiFID II suitability requirements, which define the concept of robo-advice and provide fur - ther clarity on the information to be provided to clients when making use of robo-advice. It appears that the provision of robo-advice may be deemed a licensable activity, like the provi - sion of traditional investment advice under the Investment Services Act, Cap 370 of the Laws of Malta (ISA).
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