Malta Investment Services Company

Investment Services are regulated under the Investment Services Act and are licensable by MFSA, which is the authority responsible for the financial services industry in Malta. An ‘investment service’ is defined by the Act as ‘any service falling within the First Schedule when provided in relation to an instrument. The services listed under the First Schedule are the following:

  • Reception and transmission of orders in relation to one or more instruments;
  • Execution of orders on behalf of other persons;
  • Dealing on own account;
  • Management of Investments;
  • Trustee, custodian or nominee services;
  • Investment advice;
  • Underwriting of instruments and, or placing of instruments on a firm commitment basis;
  • Placing of instruments without a firm commitment basis;
  • Operation of a Multilateral Trading Facility.

In order for the services listed above to be classified as an investment service, they must be provided together with an instrument. The term covers a wide range of investment and financial products, including transferable securities and units in collective investment schemes.

The Investment Services Act contemplates four different categories of licences:

Category 1

  • Category 1a – Licence holders authorised to receive and transmit orders in relation to one or more instrument and, or provide investment advice and, or place instruments without a firm commitment basis but not to hold or control clients’ money or customers’ assets.
  • Category 1b – Licence holders authorised to receive and transmit orders, and, or provide investment advice in relation to one or more instrument and, or place instruments without a firm commitment basis solely for professional clients and, or eligible counterparties but not to hold or control clients’ money or customers’ assets.

Initial capital of EUR50,000 is required for Category 1 licencees.

Category 2

Licence holders authorised to provide any investment service and to hold or control clients’ money or customers’ assets, but not to operate a multilateral trading facility or deal for their own account or underwrite or place instruments on a firm commitment basis. Initial capital of EUR125,000 is required for Category 2 licencees.

Category 3

Licence holders authorised to provide any Investment Service and to hold and control clients’ money or customers’ assets. Initial capital of EUR730,000 is required for Category 1 licencees.

Category 4

Licence holders authorised to act as trustees or custodians of collective investment schemes.