Introduction Investment Firms obtaining a license in Malta benefit from the possibility of passporting their services to other EU and EEA States. Essentially, passporting rights are of two types:
· freedom to provide services on a remote basis
· freedom to set up a branch - a branch is a place of business, other than the head office, which is a part of the investment firm, and which has no legal personality and which provides the services for which the investment firm has been authorised.
Freedom to provide services on a remote basis
An investment firm desiring to avail itself of the freedom to provide services on a remote basis throughout the EU and the EEA needs to give notice of its intention to the MFSA. This notice shall be accompanied by:
· information relating to the services which it intends to provide together with a programme of operations stating in particular the investment services which it intends to provide in another Member State or EEA State, indicating whether it intends to use tied agents;
· an indication of the Member State or EEA State in which it intends to operate.
The MFSA is bound to give notice of this information to the regulatory authority of the host member state within one month. Upon the giving of this notice, the Maltese investment firm may immediately start offering its services in the EU/EEA state concerned.
Freedom to set up a branch
An investment firm desiring to set up a branch in an EU or EEA state needs to give notice of its intention to the MFSA. This notice should be accompanied by:
· an indication of the Member State or EEA State within the territory of which the investment firm plans to establish a branch;
· a programme of operations identifying the activities which it seeks to carry on through the branch, indicating whether it intends to use tied agents;
· the address of the proposed branch from where documents may be obtained;
· the proposed organisational structure of the branch and the names of the proposed managers; and
· such other clarifications as may be requested by the MFSA.
The MFSA is bound to allow passporting unless it has reason to doubt the adequacy of the administrative structure or the financial situation of the Maltese investment firm, taking into account the activities envisaged. All things being equal, the MFSA is bound to communicate the information referred to above to the regulatory authority of the host state within three months of receipt of the same information. On the passage of a maximum of two months from the date when the MFSA notifies the host state regulatory authority, the Maltese firm may establish the branch.
