Pension Legislation Changes – Malta
Malta remains as one of the world´s leading jurisdiction for pension business and the jurisdiction, its policy makers and industry, are determined to maintain that position by offering well regulated, compliant and prudent pension products. There have, however, been a number of legislative changes to Maltese pensions since the start of 2019, ranging from tighter investment due diligence to full disclosure of commission. For advisers and clients, one of the most important measures introduced is the requirement for advisers to have greater regulation than ever before.
Investment advisers, in addition to having to be licensed/authorised to provide investment advice in the country where the adviser firm is established, must also be duly authorised and regulated to provide the investment advice being given to the member, in the member´s respective jurisdiction. For European based investment advisers and members, the rules require that the adviser will need to be duly regulated to give investment advice in their European country of establishment, and where the advice is provided to a member. If the member is based in another European jurisdiction, the adviser firm must have pass ported their services under the Markets in Financial InstrumentsDirective (MIFID II) and the Insurance Distribution Directive (IDD) in the case of insurance basedinvestment products, to this EU jurisdiction. To put it simply, advisers now need to have access to both the IDD and MIFID II licences, which will essentially allow them to advise on both direct and indirect investments. Indirect investments are those via a life assurance bond or wrapper.
We are pleased to say that whilst many other advisory firms are now rushing around to make sure they have licences in place ahead of the six-month transition period, our consultants already have both the IDD and MIFID II licences, so it is pretty much business as usual for us.
The new rules also state that every member of a Maltese pension must have an appointed investment adviser, unless they can categorically class themselves as a “professional member”.
At Expat Services, we see the introduction of these new regulations as a positive move made by the financial and pension industries. Increasing the protection for clients both from a regulation and due diligence stance can only be considered a good thing in our opinion. If you have a Maltese pension or have ever thought about transferring a pension overseas, we would welcome the change to discuss your options with you.