Security Token Offering STO

Security Token Offering STO


Malta has established itself as an EU financial services centre with a clear and business-friendly legislative framework covering the issue, trade and provision of services to all financial instruments. The Malta Stock Exchange permits the listing of bonds and equities in line with EU regulations and has served as the launch pad for numerous international companies.

 

In tandem with the growth of financial services, Malta has been a prime fintech hub for over a decade by attracting to the island several electronic money institutions and payment service providers, as well as having developed into the world’s largest iGaming hub.

 

This led Malta to invest heavily in its IT infrastructure and has attracted a large proportion of senior IT talent to the island. This experience both as an international financial service centre as well as regulating tech-based, high-risk industries positioned Malta perfectly to capitalise on the rise of DLT technology.

 

Malta has sought to create a regulated framework for innovative technology covering DLTs, ICOs and relative services providers that continues to build on the three pillars of consumer protection, market integrity and financial stability, whilst ensuring that tokenized financial instruments are recognised as such and continue to be regulated by traditional Malta and EU financial services law.






Country Highlights

GDP GROWTH: 6.6% in 2017 REGULATORS: Registry of Companies, Malta Financial Services Authority, Malta Digital Innovation Authority
TIMEZONE: Central European Time Zone (UTC+01:00) FINANCIAL SERVICES FRAMEWORK: EU and OECD approved
FINANCIAL SECTOR: 25% Annual Growth FINANCIAL TECHNOLOGY LAW: First in World


Legal Basis

The comprehensive legal framework issued by Malta to regulate virtual financial assets (VFAs) and virtual financial assets related services (VFA Services) comprises a series of three laws: 

  •  the Malta Digital Innovation Authority Act (MDIA Act) establishing the Malta Digital Innovation Authority (MDIA);
  • the Innovative Technology Arrangements and Services Act (ITAS Act) providing for registration of technology service providers and the certification of technology arrangements; and 
  • the Virtual Financial Assets Act (VFAA) mainly regulating initial coin offerings (ICOs), VFA service providers and VFA agents. 

That said, tokens that represent any financial instrument, despite running on DLT, will fall outside the scope of the VFAA and will instead be regulated by the prevailing EU law and national legislation, depending upon the exact nature of the financial instrument. Whilst financial instruments are outside the scope of the VFAA, the prior determination of a DLT asset as a financial instrument, however, is to be undertaken in line with the VFAA and the MFSA’s guidance notes. 
Tokens linked specifically to securities and in relation to which a public offering is going to be undertaken are generally regulated by the Malta Companies Act which deals with public offerings in terms of Maltese law and sets out rules relating to capital issues by public companies. 
Should issuers want to list and trade their securities, on the other hand, the Malta Financial Markets Act sets out the framework for the regulation of financial markets, creating the Listing Authority which in turn is empowered to issue listing rules regulating any admittance to trading on the Maltese regulated markets
 


Benefits

  • Rules and Documentation in English
  • Consumer Protection, Market Integrity and Financial Stability
  • Regulator’s Open-Door Policy
  • Reputable, Cost-Effective Jurisdiction
  • Attractive Passporting Corporate Tax Regime


Eligibility

  • Undertake Fit & Proper Test
  • Undertake the Financial Instrument Test
  • Register Prospectus
  • Undertake STO within 12 months


Process & Timeline




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Key Contacts

Dr Priscilla Mifsud Parker

Partner - Corporate, Trusts & Fintech

+356 22056422

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