I want to Launch a VFA What do I need to do?
A VFA is a term used by the Malta Financial Services Authority and it’s long form name is a Virtual Financial Asset, a VFA also falls in the category of an Innovative Technology Arrangement (ITA).
In order to launch a VFA there are several things you will need – and when we say you will need, what we mean is that they are NOT Optional – you will not be able to launch without these steps.
A. Create an appropriate Organisation
1 – A VFA Agent– for a complete list clock here.
2 – Two Directors for ‘dual control’ – one resident in Malta – both ‘fit and proper’
3 – An auditor
4 – A Money Laundering Officer (MRLO)
5 – A custodian for the safekeeping of assets
6 – A Systems Auditor– i.e. STIS Group
B. You must produce a Whitepaper
“that is compliant with respective applicable laws. Guidelines are listed in the first schedule of the Act, and include guidelines for website and other advertisement materials.”
It is the job of the VFA Agent to moderate the Whitepaper and to undertake the Financial Instrument Test (FIT) which determines that your offering is indeed a VFA
C. You must have a physical office in Malta
Why do I need a Systems Auditor?
You will need to ‘retain’ a Systems Auditor’ to comply with this requirement in Chapter 2 of the VFA Rulebook.
R2-2.4.2.1 Pursuant to R2-2.4.1.1, where an Issuer has Innovative Technology Arrangement/s in place, such Issuer shall appoint and have at all times in place a Systems Auditorin relation to such Innovative Technology Arrangement/s.
Provided that, if at any time such Issuer fails to have a Systems Auditor in place, the MFSA shall have the power to appoint a person to fill the vacancy; the fees and charges so incurred being payable by the Issuer.
You MUSThave a Systems Auditor in place at all times.
You MUSTobtain a certificate of compliance on an annual basis
Sub-Section 2 Compliance Certificate R2-2.2.2.1
An Issuer shall be required to draw up, on an annual basis, a compliance certificatein relation to its business. Such certificate shall be drawn up by the Issuer, reviewed by the VFA Agent, which VFA Agent shall ensure its completeness and accuracy and signed by all members of the issuers board of Administration and subsequently submitted to the Authority by the VFA Agent.
R2-2.2.2.2 An Issuer shall ensure that the compliance certificate includes the following:
ii. a confirmation that its Innovative Technology Arrangement complies with any qualitative standards set and guidelines issued by the Malta Digital Innovation Authority applicable to the particular type of arrangement (irrespective of whether the said arrangement holds a certification or a ruling of eligibility under the Innovative Technology Arrangements and Services Act), which confirmation should be obtained from a Systems Auditor;
But what is my Systems Auditor going to do?
Quite simply the Systems Auditor is responsible for ensuring that the Issuer of the VFA meets all the criteria of the ITA by way of a Systems Auditor Report.
R2-2.4.2.11 The Issuer shall ensure that its Systems Auditor, prior to the commencement of the offering of the Virtual Financial Assets, has prepared a report which covers all aspects of its Innovative Technology Arrangement/s, including inter alia checks that the requirements of R2-3.2.2.4 have been satisfied.
The Issuer shall require its Systems Auditor to prepare a report to this effectand a copy of such report shall be held in Malta at the Issuer’s registered address and made available to the MFSA upon request.
R2-2.4.2.6 The Systems Auditor shall be responsible for reviewing and auditing the Innovative Technology Arrangement/s, including cyber security arrangements.