The MFSA has launched a consultation paper on Security Token Offering (STO) as a first and important step in the revision of the regulatory framework behind capital markets in Malta.  

An STO is a security - typically a bond or a share - the storage and/or transaction execution of which is intrinsically dependent on, or utilises Distributed Ledger Technology (blockchain).

In line with the MFSA’s Vision 2021, the proposed STO policy takes into consideration the evolving needs of the industry while ensuring high standards of investor protection and market integrity.

The MFSA is currently working on a revised capital markets strategy, with the aim of analysing and refining the functioning of our capital markets, in order to provide a better environment for financing private sector innovation, investment and growth.

Following the launch of the MFSA’s fintech strategy and virtual financial assets framework in 2018, and as part of its capital markets strategy, the authority is seeking to bridge the gap between traditional securities offering and technology-enabled securities offering and trading.

The objective of the consultation paper is for the authority to obtain stakeholders’ views on a policy which, while supporting innovation and new technologies for financial services, does not compromise investor protection, financial integrity and financial stability.

The consultation paper takes into consideration the different processes from application for admissibility to listing, post-trade settlement, and is divided into six sections accordingly.

The consultation is open to the public until August 30, 2019.

Industry participants and interested parties are invited to send their feedback via e-mail to capitalmarkets@mfsa.com.mt .