Malta's Security Token Offering Insights

TALLINN, Estonia - Dec. 27, 2019 - PRLog -- As stated by a licensed Maltese Attorney, Dr. Justine Scerri Herrera, there are three major aspects that enterprise players approve upon which is namely on profit sharing, particular rights and negotiation that must be accompanied with it in order for assets to be categorized as securities.

Moreover, the STO (Security Token Offerings) interest primary market, to date it appears that adoption of customary legislations particularly the prospectus directive is not an issue. Likewise, one can just include the regulations and responsibilities on the token application, wherein such legislation like interest or fractional installments will be regulated by smart contracts and everything is registered on a blockchain or Distributed Ledger Technology (DLT). As a matter of fact, Senior Bafin Advisor Hagen Weiss mentioned that Germany has effectively released its initial STO (Bitbond) and there is more to attain.

With this in mind, STO primary market release proceedings arrived at several deliberations concerning secondary market platforms and about the way and framework that these players could be changing to DLT.

In view of this, a number of speakers expressed their point of view that they could never imagine themselves considering the concept of disintermediation or if STOs will enhance capital markets. In addition to that, Capital Markets participants are testing the transition and utilization of DLT for the reason that this recent kind of database is a remarkable method to arrange and lessen the security value chain and also this changes the legal obligations in the security value chain wherein at the time being includes numerous players from dealers, to depositaries, to custodians, clearing residences and trades.

Furthermore, the MFSA deputy director of the Securities and Supervision department Lorraine Vella contributed an excellent summary of several highlighted capital market issues and also commented about numerous responses obtained from the STOs consultation paper. Notably, her report pointed out that it appears that licensed blockchain was also preferred and concerning the duty of the CSD middlemen there was dual feedback: one indicating that CSDs are necessary and others indicating that their operations can be regulated.

Whereas, the subject of passporting as indicated by the senior advisor at Bafin Hansen Weiss also mentioned that it is crucial for controllers to operate together. Considering the fact, regulations are exchanged from EU derivatives and a lot of transactions may be passported across the EU thus it is essential according to Dr. Herrera.

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