The Virtual Financial Assets Act (VFA Act) requires an issuer of Virtual Financial Assets (VFAs) to appoint a VFA agent to assist, monitor and provide guidance throughout the full licensing process, and beyond the licensing stage. The VFA agent will be required to apply for the VFA license on behalf of the issuer. The VFA agent, who must be authorized by the competent authority to act as such, is also required to serve as a legal overseer on the issuer to ensure its legal compliance and to act as a liaison between the issuer and the competent authority (in this case the Malta Financial Services Authority).
The VFA Agent's role also entails review of all work and applications on a year-to-year basis whilst also ensuring the submission of the Compliance Report provided by the administrators of the DLT Platform. The VFA agent is also required to carry out the necessary due diligence on both the issuer and the proposed ICO offering.
At the initial stage, the VFA will also need to perform a Financial Instrument Test as required by the MFSA and which serves to analyze each category of financial instrument under MiFID within a DLT context. The Financial Instrument Test will also ascertain whether the underlying nature of the coin or token to be issued is a virtual financial asset, a virtual token, electronic money or financial instrument. Such a test will be important to determine which laws, rules and regulations will apply for the issue and the classification of such assets.
The VFA Agent will also ensure that its client has a robust and significant business plan and shall also guide the client on the requirements, information and disclosures which are required to be included in the White Paper before this is submitted to the MFSA for approval. Ultimately this will help protect the public interest and potential investors in the ICO. The VFA agent acts as the gatekeeper responsible for the protection of the public interest by ensuring that it is satisfied with the client, his background, operational setup and ability to deliver the proposed business plan as tabled within the application.
For this to be possible, the VFA agent is required to have an internal system of checks and balances to ensure that whoever is advising clients in the realm of tokens and cryptocurrencies is competent, qualified and diligent.
Grant Thornton qualifies for the role of a VFA agent, and we would not only be able to apply for the license on your behalf, but we also operate a multi-disciplinary Fintech and Blockchain Advisory Team composed of specialists in different areas to assist in all other related matters.
In brief the following is a list of services that Grant Thornton offers in its role as a VFA agent:
- responsibilities and obligations to ensure compliance with the provisions of the VFA Act and of any rules or regulations issued thereunder. This in turn requires a review of agreements in place with functionaries which agreements must satisfy all legal requirements
- ongoing liaison, guidance and advisory services to ensure that the client complies with the VFA Act regulations
- maintaining records evidencing how the issuer has complied with the VFA Act
- ensuring that the issuer is fit and proper, both prior to the issue of the ICO and thereafter, including carrying out annual compliance checks and due diligence
- assistance with and eventual submission of the application
- liaison with the respective authorities on all matter relating to the trading of the token and registration of the whitepaper
- annual review and submission of the compliance certificate to the competent authority on behalf of the administrators of the issuer
- acting as the point of reference for the issuer with the respective authorities
- carrying out and endorsing the Financial Instrument Test
- Reviewing and assistance with drafting the Whitepaper
- assisting the client with establishing a good governance framework, with the possibility of also drafting its internal policies
Optional related services:
- attendance at board meetings in an advisory capacity
- IT audits
- Financial audits
- GDPR compliance advisory
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