MALTA Law and Practice Contributed by: Ian Gauci and Cherise Abela Grech, GTG Legal
actions and holdings of EU taxpayers. DAC8 aligns with the OECD’s Crypto-Asset Reporting Framework and expands existing rules on auto - matic exchange of information to include digital assets. It also enhances co-operation between EU tax authorities to detect tax fraud and non- compliance more effectively. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms Traditional Financial Services Under the traditional financial services regime in Malta, the major trading platforms for assets are regulated markets (the sole regulated market in Malta is the Malta Stock Exchange, or MSE), multilateral trading facilities (MTFs) and organ - ised trading facilities (OTFs). In Malta, the Pros - pects Market is an example of an MTF providing a market for SMEs to raise capital by issuing equity or bonds. These types of exchanges are primarily regulated under the Financial Markets Act and relevant EU regulations. Issuers on such platforms are required to abide by the relevant rules – eg, issuers on the MSE are required to abide by the Listing Rules, whereas those listing on the Prospects Market are required to abide by the Prospects MTF Rules. Crypto-Assets However, the increasing prominence of crypto- assets has led to the rise of new trading plat - forms, such as crypto exchanges and security token exchanges, and this has also brought to light the rise of P2P exchanges. CASPs seeking to operate a trading platform for crypto-assets are required to hold a Class 3 CASP licence. They are also required to lay down, implement and maintain clear and trans -
parent operating rules for the trading platform. Before admitting a crypto-asset to trading, such CASPs must ensure that the crypto-asset complies with the operating rules of the trading platform and assess the suitability of the crypto- asset concerned. Similar to the previous require - ments under the VFAA, admission to trading of crypto-assets that have an inbuilt anonymisa - tion function is prevented unless the holders of those crypto-assets and their transaction history can be identified by the CASP. Such CASPs may also not deal on own account on their own plat - form, and must have effective systems, proce - dures and arrangements in place to ensure that their trading system operates in line with MiCA’s requirements. 6.2 Regulation of Different Asset Classes The VFAA previously utilised the Financial Instru - ment Test to determine the legal classification of any particular virtual asset, which in turn would determine the applicable regulatory regime. In the same vein, ESMA also issued specific guidelines to facilitate consistency in the regula - tory classification of crypto-assets under MiCA. The guidelines provide a standardised test to determine whether a particular crypto-asset qualifies as an ART, an EMT or a crypto-asset other than ARTs or EMTs. Where a crypto-asset is deemed to be a finan - cial instrument in terms of MiFID, MiCA does not apply – rather, the issue and provision of services in relation to such financial instrument is regulated by traditional financial services leg - islation. 6.3 Impact of the Emergence of Cryptocurrency Exchanges The passing of the VFAA and the establishment of supplementary regulations, rules and guide -
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