Investment Services

MFSA Issues Consultation Document on the Conduct of Business Rulebook – Phase 2

12 Apr 2016

2 min read

On the 11th April 2016, the Malta Financial Services Authority (‘MFSA’) entered into the second phase of the consultation procedure for the Proposed Conduct of Business Rulebook (“Rulebook”) which is addressed to persons:

  1. licensed under the Investment Services Act (excluding custodians) and
  2. carrying on insurance activities in terms of the Insurance Business Act or the Insurance Intermediaries Act (insurance undertakings and insurance intermediaries),
  3. licensed as credit institutions under the Banking Act which sell or advise clients in relation to structured deposits

The Rulebook is aimed at setting out the regulatory requirements of the said persons regulated persons in order to regulate their conduct with respect to their clients.

The first phase of the consultation procedure tackled the topics of:

  • Client Disclosures and Reporting;
  • Product Governance; and
  • Conflicts of Interest.

The purpose of this second phase of consultation is to obtain the industry’s views on the following chapters in the proposed Conduct of Business Rulebook:

  • Selling Process and Practices (including Contractual Agreement with Clients); and
  • Execution of Clients’ Orders

The MFSA is seeking feedback on the proposals set out in this second phase of the Consultation Procedure relating to the Rulebook. Responses should reach the MFSA by 31st May 2016.

Furthermore, the MFSA is currently in the process of reviewing the feedback received from the industry in relation to the first phase of the consultation and finalising the first three chapters of the Rulebook.

Upon the conclusion of the entire consultation procedure, a feedback statement on all the chapters of the proposed Rulebook will be issued by the MFSA after which the final Rulebook will be published. Regulated persons will be granted a transitional period to comply with the requirements emanating from this new Rulebook.

The Consultation Paper and supporting documentation may be accessed here.

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