The Investment Firms Regulation and Directive – Master Data Collection and Investment Firms Classification

The Investment Firms Regulation and Directive (the “IFR/D Package”), became applicable on the 26^th of June 2021. The IFR/D Package introduced a new prudential framework that is applicable to Investment Firms. For further details on the coming into force of the IFR/D Package, kindly refer to our article of the 4^th of November 2021.

On the 17^th of January 2022, the Malta Financial Services Authority (the “MFSA”) issued a Circular titled “The Investment Firms Regulation and Directive – Data Collection”, which follows up on other circulars and briefings that were issued by the MFSA following the coming into force of the IFR/D Package. Through this Circular, the MFSA informed the public that two data collection exercises are going to be carried out by the MFSA; one of the exercises being applicable to all Investment Firms whilst the other exercise being applicable only to Investment Firm groups.

The first exercise that is applicable to all Investment Firms relates to the European Banking Authority Master Data Collection that is being carried out by the European Banking Authority. In this exercise, the National Competent Authorities must collect specific information from those licence holders that fall within their supervisory remit. Through its Circular, the MFSA informed licence holders that they must compile an excel file which must be submitted through the Licence Holder Portal of the MFSA (the “LH Portal”) under the project entitled “Investment Firms Reporting” and saved under the name “CODE_JAN2022_OTH.zip.”. Reference must be made to these guidelines and Circular for further guidance on the regulatory reporting requirements and on the submission of financial documentation through the LH Portal.

The second exercise that is applicable only to Investment Firm groups relates to the Investment Firms Classification. The IFR/D Package defines an Investment Firm group as a group of undertakings which consists of a parent undertaking and its subsidiaries or of undertakings which meet the conditions set out in Article 22 of Directive 2013/34/EU of the European Parliament and of the Council, of which at least one is an investment firm and which does not include a credit institution. The MFSA’s Circular provides that Investment Firm groups must provide the MFSA with an assessment related to their consolidated situation for the application of Article 7 of the Investment Firms Regulation (the “IFR”) relating to the Prudential Consolidation, or for the application of Article 8 of the IFR relating to the Group Capital Test. This assessment must be submitted through the LH Portal of the MFSA under the project titled “Investment Firms Reporting” and saved under the name “CODE_JAN2022_OTH.zip.”.

The MFSA requires that all Investment Firms submit the Master Data Collection file on the LH Portal by not later than the 31^st of January 2022. In addition, the MFSA requires that all Investment Firm groups submit their Investment Firms Classification assessment on the LH Portal by not later than the 31^st of January 2022.