Introduction
The MFSA has published the third instalment of the Virtual Financial Assets (‘VFA’) Rulebook concerning VFA Licence Holders. The final version of this rulebook is the result of a consultation conducted by the Malta Financial Services Authority (‘MFSA’), being the designated ‘competent authority’ under the VFA Act and follows two anteceding publications: one regulating VFA Agents and the other regulating ‘Initial VFA Offerings’ (commonly known as ICOs).
The provisions of the VFA Act empower the MFSA to issue rules as necessary to implement the VFA Act including the regulation of VFA Licence Holders and VFA Services, and the leading provision in this regard is Article 13 of the VFA Act that states that no person shall provide, or hold itself out as providing, a VFA Service in or from within Malta unless such person is in possession of a valid licence granted under the VFA Act.
The Rulebook contains detailed provisions on the licensing requirements of VFA ‘License Holders’, being those persons duly licensed to carry out the VFA Services found in the Second Schedule to the VFA Act.
Chapter 3 of the Virtual Financial Assets Rulebook: Virtual Financial Assets Rules for VFA Service Providers’ (the ‘Rulebook’) fleshes out this provision by setting down VFA Service Providers’ licensing requirements, licensing process, their ongoing obligations and provisions concerning enforcement and sanctions in the event of misconduct. The Rulebook’s salient parts shall be explored next.
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Class
Activities
Capital Requirements
Application Fee
Supervisory Fee
Class 1
Reception & transmission of orders and/or provision of investment advice in relation to VFAs
€50,000 or
€25,000+PII
€6,000
Class 2
Class 3
Class 4
Classes of VFA services, Capital Requirements and Fees
The Rulebook and the VFA Regulations establish minimum capital requirements, application fees and annual supervisory fees payable to the competent authority, as per the table below:
CLASS ACTIVITIES CAPITAL APPLICATION ANNUAL
REQUIREMENT FEE SUPERVISORY
FEE
CLASS 1 Reception and €50,000 or €6,000 €5,500*
transmission €25,000+PII
of orders and/or
provision of
investment advice
in relation to VFAs
CLASS 2 Any VFA related €125,000 €10,000 €9,000*
activity except
operating a VFA
exchange or dealing
on own account
CLASS 3 Any VFA related €730,000 €14,000 €12,000*
activity except
operating a VFA
exchange
CLASS 4 Any VFA related €730,000 €24,000 €50,000*
activity including
operating a VFA
exchange.
* The supervisory fee payable annually to the MFSA might increase depending on the revenue generated by the business.
The initial capital that VFA Licence Holders are required to have for authorization purposes must be retained at all times.
Quantification of damages in Malta and in relation to the judgement.
Apart from the actual loss suffered (damnum emergens), Article 1045 of the Civil Code refers also to the loss of future earnings (lucrum cessans). The actual loss shall refer to either the loss caused to one’s property, or the expenses which the latter may have been compelled to incur in consequence of the damage, or else either to the loss of actual wages or other earnings. The said article further states that “loss of future earnings” shall refer to any permanent incapacity, total or partial which the act may have caused the aggrieved. In addition to this Article 1045(2) lays down the necessary guidelines in order for the Court to assess the sum that must be awarded in the case of lucrum cessans, by taking into account the circumstances, nature and degree of the incapacity caused as well as taking into account the condition of the injured party.
The judgement stated that after the defendant was convicted of criminal charges, the Court took into account all evidence brought forward before it including the opinion of medical experts. By which they concluded that, due to such an accident, the plaintiff suffered severe injuries such as a broken pelvis, ribcage and other body parts. The Court gave particular importance to the pain that the injured party now suffers from in his left knee and in his lower back making it very difficult for him to walk around for long hours. As a result, he had to undergo several operations and spent around a month and a half in hospital, resulting in him not being able to go to work. His daily job was that of a head waiter and given the circumstances, he could no longer perform his job due to his injuries sustained as a result of the accident and also because he had already used up all his sick leave and vocational leave.
Lucrum Cessans
The biggest problem that lies in calculating the percentage of disability depends upon the effect of the specific injury on the particular person. The Maltese Courts have always considered disability in a two-fold manner, meaning both the disability to earn an income whilst also referring to his permanent physical injuries. As held in the case of Gatt vs. Carbone, the injuries sustained by the victim, not only made it more difficult for the person to continue his own work but also reduced the possibility of him finding another job in the future as he is now no longer independent but heavily depends upon other people’s help and assistance in his everyday affairs. In this case, the Court heard the injured party’s pleas that he is now suffering from psychological trauma as he is incapacitated and incapable to work. The Court held that the percentage disability was calculated at 15% due to the fact that he would need a total knee replacement in the future. Moreover, the Court also took into account the expenses that will be incurred in the future as he would need to continue buying more medicine due to his chronic pain.
Damnum Emergens
With regards to the damnum emergens, that is the actual loss of earnings, the Court awarded €3,444.94 after the plaintiff brought forward evidence of the receipts of payments from doctors and for the need of buying an orthopedic bed. In addition to this, the plaintiff also wanted compensation for the clothes that he was wearing at the moment of the accident including also the value of the car at the moment of the accident which had been declared beyond economical repair. The Court utilized the principle enshrined in the landmark judgment of Butler vs. Heard by taking into consideration the average adjusted wage. Since the victim was only 47 years old at the time of the incident, the Court worked on a multiplier of 13 years as his working life expectancy, taking into consideration his chances and changes of life.
Conclusion
After taking everything into account, the Court’s final computation of damages (after a correction due to a mathematical error) amounted to €64,869.69. This judgement confirms previous case law clearly indicating that the Maltese Courts take into account every aspect of the case and aim to ensure that the aggrieved party is restored as much as possible to the position they were before the accident occurred and that they would be compensated accordingly for any hardship caused.
