Investment Firms Regulation and Directive – Collection of basic data and classification of investment firms

The regulation and directive on investment firms (the “IFR/D package”), became applicable on 26and of June 2021. The IFR/D Package introduced a new prudential framework applicable to Investment Firms. For more details on the entry into force of the IFR/D Forfait, please consult our article of 4and from November 2021.

The 17thand January 2022, the Malta Financial Services Authority (the “MFSA”) issued a Circular title “The Investment Firms Regulation and Directive – Data Collection”, which follows other circulars and information notices issued by the MFSA following the entry into force of the IFR/D package. Through this circular, the MFSA informed the public that two data collection exercises will be carried out by the MFSA; one of the exercises being applicable to all investment firms while the other exercise is only applicable to groups of investment firms.

The first exercise that applies to all investment firms concerns the Collection of basic data from the European Banking Authority which is conducted by the European Banking Authority. In this exercise, national competent authorities should collect specific information from license holders that fall under their supervisory jurisdiction. Through its Circular, the MFSA has informed licensees that they must establish a Excel file which must be submitted via the MFSA Licensee Portal (the “LH Portal”) as part of the project entitled “Declaration of investment firms” and registered under the name “CODE_JAN2022_OTH.zip.”. You should refer to these guidelines and Circular for more information on regulatory reporting requirements and submitting financial documents through the LH Portal.

The second exercise, which only applies to investment firm groups, concerns the Classification of investment firms. The IFR/D package defines an investment firm group as a group of firms made up of a parent undertaking and its subsidiaries or undertakings fulfilling the conditions set out in Article 22 of Directive 2013/34/ EU of the European Parliament and of the Council, at least one of which is an investment firm and which does not include a credit institution. The AMSF circular provides that groups of investment firms must provide the AMSF with an assessment of their consolidated situation for the application of article 7 of the regulation on investment firms (the “IFR”) relating to prudential consolidation, or for the application of article 8 of the IFR relating to the Group Capital Test. This assessment is to be submitted via the MFSA LH Portal as part of the project entitled “Declaration of investment firms” and registered under the name “CODE_JAN2022_OTH.zip.”.

The MFSA requires that all investment firms submit the Master Data Collection file to the LH Portal no later than 31st from January 2022. In addition, the MFSA requires that all Investment firm groups submit their investment firm classification assessment on the LH portal no later than 31st from January 2022.