Comments on: No need to panic in Malta

By: Angela Brooks

Angela Brooks — Sun, 06 May 2018 18:29:30 +0000

I have a very simple mind – and I try to think like the victims who have lost a life-time’s retirement savings. I am sorry if I am a bit dim, but isn’t it kind of bleeding obvious that if an adviser is going to advise on investments, he needs an investment license? If I want to go fishing, I get a fishing license; if I want to go driving I get a driving license; if I want to commit matrimony I get a marriage license. QED. Simples.

By: John Batty

John Batty — Fri, 04 May 2018 10:33:53 +0000

Apologies for the misunderstanding there @James Caldwell, I posted that in response to the statement by Christopher that he had been told that those licensed for Insurance Products would not be allowed to advise. My comment wasn’t meant to be in relation to structured products in any way.

By: James Caldwell

James Caldwell — Thu, 03 May 2018 19:05:24 +0000

@John Batty. Since when is a structured note an insurance based product? This article is about Malta regulators and their right to lay down stipulations, not what EU regulations state, or what insurance intermediaries want.

@Will Grahame-Clarke. You should rely on your research and stick to the subject matter of Malta and structured notes. Your reply is irrelevant to your article and demonstrates no understanding of individual regulators powers. It also entirely trivialises the vast different requirements of being an investment adviser and an insurance intermediary, the qualifications, risk to client, exposure to loss, etc. although at least we now have clarification that anyone operating under IDD is an insurance intermediary or insurance adviser? Perhaps the Malta regulator with their many highly qualified individuals focus more on client outcomes than worrying about insurance intermediary future business?

By: Bethell Codrington

Bethell Codrington — Thu, 03 May 2018 16:29:04 +0000

The Devil is always in the detail. If, MFSA allow this (and I doubt it) a Trustee Compliance department might want to read the following, assuming they wish to deal with such firms:
Article 16
Non-complex insurance-based investment products
An insurance-based investment product shall be considered as non-complex for the purposes of Article 30(3)(a)(ii) of Directive (EU) 2016/97 where it satisfies all of the following criteria:
(a) it includes a contractually guaranteed minimum maturity value which is at least the amount paid by the customer after deduction of legitimate costs; Not sure I see many of these on OMI’s valuations
(b) it does not incorporate a clause, condition or trigger that allows the insurance undertaking to materially alter the nature, risk, or pay-out profile of the insurance based investment product;
(c) it provides options to surrender or otherwise realise the insurance-based investment product at a value that is available to the customer;
(d) it does not include any explicit or implicit charges which have the effect that, even though there are technically options to surrender or otherwise realise the insurance based investment product, doing so may cause unreasonable detriment to the customer because the charges are disproportionate to the cost to the insurance undertaking;
(e) it does not in any other way incorporate a structure which makes it difficult for the customer to understand the risks involved.

For definitions on complex and non-complex products it is here: https://www.esma.europa.eu/sites/default/files/library/2015/11/09_295.pdf
And this is a great article on Complex products: http://www.compoundgrowth.co.uk/esma-guidelines-complex-products-finalised-mifid-ii.html

By: John Batty

John Batty — Thu, 03 May 2018 10:57:39 +0000

The draft regs state the following, and specifically mention Insurance-based investments

1.3.11 The Investment Advisor of a Scheme may either be:
(a) an entity licensed to provide investment advice to Professional Clients under the
Investment Services Act, (Cap.370); or
(b) an investment advisor established in another Member State or EEA State and
duly authorised for this activity in accordance with Directive 2014/65/EU or
Directive 2016/97 (in the case of insurance-based investment products), as
amended from time to time, and carrying out its activities pursuant to the
respective Directives, as applicable;