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Investment Services Licences
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Investment Services in Malta
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Malta has established itself as a leading jurisdiction for investment services within the European Union, offering a robust yet proportionate regulatory framework that attracts firms ranging from boutique fund managers to global financial institutions. Regulated by the Malta Financial Services Authority (MFSA) under the Investment Services Act (Cap. 370) and aligned with MiFID II, Malta provides a credible, EU-passportable platform for firms seeking to offer investment advice, portfolio management, custody, and the execution and reception and transmission of orders across asset classes.
Licensable Services under the Investment Services Act
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- Reception and transmission of orders;
- 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
- The reception, transmission, and submission of a bid relating to emission allowances
- Operation of an Organised Trading Facility
Types of Investment Services Licences in Malta
Class 1
Investment firms which provide ‘bank-like’ services, including (3) and/or (6) of Section A of Annex I to MIFID II and whose total value of the consolidated assets is equal to or exceeds EUR 15 billion
Class 1 Minus
Investment firms which provide services, including (3) and/or (6) of Section A of Annex I to MiFID II, whose consolidated assets are larger than EUR 5 billion but less than EUR 15 billion and are subject to a decision with respect to this classification by the MFSA.
Class 2
Investment firms which provide ‘bank-like’ services, including (3) and/or (6) of Section A of Annex I to MIFID II and whose total value of the consolidated assets is equal to or exceeds EUR 15 billion
Class 3
Small and non-interconnected investment firms whereby they meet all of the following conditions at all times:
▸ AUM measured in accordance with Article 17 is less than EUR 1.2 billion;
▸ COH measured in accordance with Article 20 is less than either;
(i) EUR 100 million/day for cash trades; or
(i) EUR 1 billion/day for derivatives;
▸ ASA measured in accordance with Article 19 is zero;
▸ CMH measured in accordance with Article 18 is zero;
▸ DTF measured in accordance with Article 33 is zero;
▸ NPR or CMG measured in accordance with Articles 22 and 23 is zero;
▸ TCD measured in accordance with Article 26 is zero;
▸ the on and off balance sheet total of the investment firm is less than EUR 100 million;
▸ the total annual gross revenue from investment services and activities of the investment firm is less than EUR 30 million, calculated as an average on the basis of the annual figures from the two-year period immediately preceding the given financial year.
Minimum Capital Requirements
Investment Services Licences in Malta
| Licence Class | Capital | Description of Activities |
|---|---|---|
| Class 1 | €750,000 | License holders authorised to provide any Investment Service and to hold or control clients’ money or customers’ asset fee. (Essentially Dealing and Underwriting) |
| Class 2 | €150,000 | Licence holders authorised to provide one or more of the following investment Services: Reception and transmission of orders in relation to one or more instruments; Execution of orders; Portfolio management; Investment advice; Placement of instruments without a firm commitment basis; and to hold or control client money or customers’ assets. |
| Class 3 – if they respect Article 12 IFR thresholds, if not, Class 2 | €25,000 | Licence holders authorised to provide one or more of the following Investment Services: Reception and transmission of orders in relation to one or more instruments; Execution of orders; Portfolio management; Investment advice; Placement of instruments without a firm commitment basis; but not to hold or control clients’ money or customers’ assets. |
Statutory Fees
Investment Services Licences in Malta
| Description | Applicable Fees |
|---|---|
| Licence holders authorised to receive and transmit orders in relation to one or more instruments 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. | Application fee: €2,500 Supervisory fee: €2,000 for revenue up to €50,000 + €350 per tranche for tranches of €50,000 up to €1,000,000 |
| Licence holders authorised to receive and transmit orders, and, or provide investment advice in relation to one or more instruments 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. | Application fee: €3,000 Supervisory fee: €2,750 for revenue up to €50,000 + €350 per tranche for tranches of €50,000 up to €1,000,000 |
| 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. | Application fee: €5,000 Supervisory fee: €4.500 for revenue up to €250,000 + €400 per tranche for tranches of €250,000 up to €5,000,000 |
| Licence holders authorised to provide any Investment Service and to hold and control clients’ money or customers’ assets. | Application fee: €7,000 Supervisory fee: €6,000 for revenue up to €250,000 + €400 per tranche for tranches of €250,000 up to €50,000,000 |
Application Process
Investment Services Licences in Malta
Preparatory and Licence Application
Phase 1
The MFSA suggests that the promoter schedule a meeting with MFSA representatives prior to submitting the application. Afterward, the promoter should submit a preliminary application along with the necessary supporting documents. The MFSA may request additional information if needed, and the fitness and propriety evaluations occur during this phase.
Pre-Licensing Phase
Phase 2
After the MFSA has reviewed and approved the draft application and accompanying documents, and agreed upon the license conditions, it will grant “in principle” approval for the license to be issued. The applicant must then settle any unresolved matters, such as incorporating the company and submitting signed copies of the updated application form, along with final versions of supporting documents. The license will then be issued by the MFSA.
Post-Licensing Phase/Pre-Commencement of Business
Phase 3
Before formally commencing business, the applicant may need to fulfill several post-licensing obligations.
Application Documents:
▸ MFSA Application Form
▸ Application Fee (non-refundable)
▸ Comprehensive business profile, including a detailed business plan
▸ Supporting board resolution
▸ Detailed shareholding structure
▸ Financial Resources Statement
▸ Audited accounts of three years (where applicable)
▸ Projected three-year financial statements
▸ Draft Memorandum and Articles of Association
▸ Evidence substantiating competence of proposed individuals
▸ Auditors’ declaration to accept appointment and draft engagement letter
▸ Auditor’s opinion on the Statement of Financial Resources
▸ Personal questionnaires for each director, qualifying shareholder and senior officer of the applicant
▸ Insurance policies (where applicable)
▸ IT Questionnaire (where applicable)
