Applicants interested in acquiring a VFA Service Provider license must satisfy several requirements, one of which is the appointment of a Compliance Officer (CO). The Compliance Officer's role can be summarized as the duty to hold the Service Provider's license in good standing in line with the relevant laws and regulations. The upkeeping of the licence comprises of several duties and obligations which the CO must adhere to. As such, it is the CO's duty to:
- establish and implement adequate policies and procedures at application stage whilst continuing to monitor and to assess the suitability and efficiency of the such policies and procedures throughout the License holder's lifespan in place in line with the VFA Act, the VFA Regulations issued thereunder and these Rules, as well as with its obligations under other applicable legislation;
- report any actions taken to tackle any deficiencies in the License Holder's compliance with its obligations;
- prepare and have in place a compliance monitoring plan; and
- review bye-laws both at application stage and on an ongoing basis thereafter;
- give general advice and assistance to the Company to ensure its operations are compliant with the relevant laws and regulations.
In order to carry out these duties properly, the compliance function should be given the necessary authority, resources and access to any relevant information necessary to the performance of the function whilst not being involved in any performance of services or activities which are under their monitoring duties. In carrying out his functions, it is crucial that the Compliance Officer operates independently of the license holder.
The CO is also bound together with the License Holder to submit on an annual basis, together with the audited financial statements, a Compliance Certificate. The Certificate shall:
- state that the License Holder complies with the provisions of the Act, the VFA Regulations arising therefrom and Rules issued thereunder;
- state that all local AML/CFT requirements are being adhered to, once confirmation is given by the MLRO;
- detail the outcome of the CO's Compliance Monitoring Plan, along with a list of breaches identified;
- include a list of clients which the Licensee has taken action against, along with a brief description of the breach and the disciplinary measurements enforced.
Due to the Compliance role being considered as a critical function to the Licence holder's operations, the Compliance Officer is first and foremost expected to have attended the relevant training sessions in relation to his role. The CO also requires prior approval from the MFSA and must undergo a fitness and properness assessment which is applicable to roles who are effectively directing the VFA business. In assessing whether a person is fit and proper, the MFSA requires that three criteria are satisfied, these being integrity, competence and solvency. The final part of the approval process is a mandatory interview with the proposed Compliance Officer, where the Authority questions the knowledge and problem-solving abilities of the Compliance Officer. The Applicant is also given the option to engage its VFA Agent to assume the compliance function in line with the process established by Chapter 3 of the VFA Rulebook (Chapter 3).
Lastly, the licensee is bound to inform the Authority within 5 working days of the CO's resignation or removal from the company. Such notification shall be accompanied with a statement detailing the reason/s departure and measure being taken to satisfy the Licensing conditions as applicable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.