Company Service Providers
The Company Service Providers (CSP) Act, 2013 has been published on the 24th December, 2013 and is now in force. Persons who prior to 24 December 2013 were carrying out the services of a CSP had to apply to the Malta Financial Services Authority (MFSA) for registration in terms of the Company Service Providers Act or to notify the Financial Intelligence Analysis Unit (FIAU).
MIA members who are in possession of a warrant to practice the profession of accountant (issued in terms of Article 4 of the Accountancy Profession Act, 1979) are not required to register with the MFSA but are only expected to notify the Financial Intelligence Analysis Unit (FIAU), in terms of Article 3(1) of the Company Services Providers Act that they are carrying out company services by way of business. This exemption from registration also applies to accountancy and audit firms that are formed in terms of Article 10 of the Accountancy Profession Act.
A CSP, which is a distinct legal person and is directly or ultimately fully owned by warrant holders should be registered with the MFSA under the CSP Act. Similarly those members that are warrant holders and who are either a shareholder, director, manager, MLRO or compliance officer in the company that provides company services are subject to the obligations imposed by the CSP Act and Rules. Corporate company services providers are also precluded from applying GAPSE (General Accounting Principles for Smaller Entities). If licenced, such an entity would become one which is in possession of a licence issued by the MFSA acting as the competent authority in terms of the relevant legislation (in accordance with Regulation 5 of the GAPSE Regulations) and would be precluded from applying GAPSE if it previously satisfied the size criteria that allowed it to apply GAPSE. Similarly newly formed companies that could otherwise fall in scope of
GAPSE would not be able to apply it.
On 14 March 2014, the Malta Institute of Accountants organised an information session for its Members about the CSP Act and Regulations. Members can access the slides that were used by MFSA representatives as well as a document with a number of case studies, by going to the web page > MIA Event: Introducing the Company Service Providers Regime under the library Events that is only accessible by MIA members after login. For ease of reference these case studies are shown below.
If a CSP Co LTD subcontracts all its work to a warrant holder, but then invoices the client itself, would it need to register with the MFSA? Would the warrant holder need to notify the FIAU?
This appears to be an outsourcing arrangement and accordingly, the CSP Co. Ltd, would need to be registered in terms of the Act and take responsibility for the work subcontracted. The warrant holder would be required to notify the FIAU.
If a CSP Co LTD needs to apply for an MFSA licence and a warrant holder is either a shareholder, director, manager, MLRO or compliance officer in the CSP, would he need to satisfy the fit and proper test? Does an individual need to fill in a personal questionnaire in all cases?
Shareholders, Directors and persons holding a senior management position are all subject to the “fit and proper” test and must submit an individual PQ. Where the proposed person has within the previous five years submitted a PQ to the MFSA in connection with some other role with the same or another regulated company, the request for consent need not be accompanied by a new PQ. In these circumstances, it shall be accompanied by a confirmation by the proposed person that the information in the previous PQ is still current or indicate any changes or updates thereto.
Company A is a firm of accountants / auditors (that may be set up as a partnership or as a limited liability company in terms of the Accountancy Profession Act – APA). Companies B & C are owned by the same individuals who are partners in the firm and that fall within the definition of a CSP. Companies B and C form part of the same group as Company A and for the purposes of the APA can be considered as Connected Undertakings. Since Company A is exempt and Companies B and C are connected undertakings, would they also be exempt or must these companies obtain a licence from the MFSA to act as CSPs?
If Company A is set in terms of the Article 10 of the APA, it is exempt from registration in terms of the Act but must notify the FIAU. Companies B and C are still required to be registered in terms of the CSP Act because they are separate legal entities from both Company A and from its shareholders.
Assume that an accountancy / audit firm is providing company services in its own name and therefore is required to notify the FIAU. Would each partner in the firm also be required to notify the FIAU in his own name?
No, unless such partners are also providing company services in their own name as well as in the name of the audit/accountancy firm. Accordingly, it is only in the latter case that the partners would need to notify FIAU independently of the audit firm.
Company A is part of Group C. The company is an employment agency, which as part of its day-to-day operations provides employers with company directors or company secretaries both on a permanent as well as on a temporary basis. Would Company A would fall in scope of the Company Service Providers Regime?
Yes. The services offered by Company A by way of business include “arranging for another person to act as director or secretary of a company” which attract a registration requirement in terms of the CSP Act.
What actions would I need to take in the following circumstances:
I am a warrant holder and I sit on company boards as a director or company secretary.
If these activities are carried out by way of business you are exempt from Registration because you are a warrant holder, but must notify the FIAU.
I am not a warrant holder and I sit on company boards as a director or company secretary.
If you carry out these activities by way of business, you are subject to Registration.
I am a company director or a company secretary for the company that I own or for the company that employs me. Should I also include these directorship/s for the purpose of calculating the total number of directorships?
If these are the only directorships / company secretarial positions you hold there is no need for registration or to submit a notification to the FIAU. These directorships should not be included for the purpose of calculating the total number of directorships
I provide company services to businesses by forwarding their mail and/ or I operate a business that provides a registered company office service.
You are subject to registration in terms of the Company Services Providers Act.