Following the issuance of a Consultation Document on Initial Coin Offerings ("ICOs"), Virtual Currencies ("VC") and Related Service Providers, the Malta Financial Services Authority ("MFSA") has now issued a discussion paper on the Financial Instruments Test.

This consultation paper is the first step which will culminate in the creation and adoption by the MFSA of a test which will be used to determine whether a Distributed Ledger Technology ("DLT") asset, based on its specific features, would be regulated by (i) the existing EU legislation and the corresponding national legislation, (ii) the proposed Virtual Financial Assets Act ('VFAA') or (iii) is otherwise exempt.  It is envisaged that the test will be applicable both within the context of ICOs as well as during the intermediation of DLT assets by persons undertaking certain activities in relation to such assets in or from Malta.

The MFSA have invited all interested parties to provide it with their views on the matter by no later than 4^th May 2018.