The Malta Financial Services Authority (“MFSA”) decided to proceed with the cancellation of Portmann’s investment services licence in terms of Article 7(2)(b) of the Investment Services Act.
Furthermore, the MFSA decided to proceed with imposing additional directives on the Company and also, decided that its Revised Directives of 23 December 2019 imposed on the Company are not modified.
Address:
Portmann Capital Management Ltd
Dragonara Business Centre, 5th Floor,
Dragonara Road,
St Julian’s, STJ 3141
Malta
Business Activity: Investment Firms
BREACHES
The Authority concluded that the Company breached the Articles and Rules as per the table below:
| Identified Breach of Article/Rule | Description |
| Article 3(1) of the Financial Institutions Act | Continued providing payment services activities without a licence |
| R1-1.3.1 of the Rules
|
Licence Holder to act honestly, fairly and professionally and in compliance with relevant requirements. |
| R1-1.4.3 of the Rules | Sound and Prudent Management |
| R1-1.5.1.2 and R1-1.5.1.14 of the Rules
|
Management to monitor and periodically assesses the adequacy and implementation of the firms’ strategic objectives and take appropriate steps to address any deficiencies. |
| R1-1.6.3 of the Rules | Cooperation with the Authority |
| R1-1.5.3.1 and R1-1.5.3.2 of the Rules | Compliance function |
| R1-1.16.1 of the Rules | External auditor |
| R1-2.2.1of the Rules | Reporting Requirements |
| R2-3.2.12 (i) and (iii), R1-1.5.4.1, R1-1.4.6 and R1-1.5.3.5 of the Rules | Manual of Procedures |
| R2-3.2.80 of the Rules | Risk Management and RMICAAP Report |
| R2-3.2.11 of the Rules | Policies and Procedures |
| R1-1.5.4.2 of the Rules | Compliance |
REGULATORY ACTION
On 27 January 2022, the MFSA decided to proceed with the cancellation of Portmann’s investment services licence in terms of Article 7(2)(b) of the Investment Services Act.
It should be noted that the MFSA’s decision to cancel the Company’s licence may be appealed before the Financial Services Tribunal in accordance with applicable law and shall not become operative until the expiration of the period within which an appeal lies. If an appeal is made within such period, the cancellation shall become operative on the date of the decision of the Tribunal dismissing the appeal or the date on which the appeal is abandoned.
The MFSA has also decided that its Revised Directives of 23 December 2019 imposed on the Company are not modified and therefore the restrictions to cease ongoing transactions are not lifted for Portmann’s clients. The Directive restricting the onboarding of new clients and the outgoing transactions from the accounts of clients held by Portmann under nominee would therefore remain in force for the time being.
Furthermore, the MFSA has also decided to proceed in issuing a Directive in terms of Article 15 of the Investment Services Act, directing the Company to remove any reference to licensable activities in the objects clause contained in the Memorandum and Articles of Association. This Directive shall become operative should the decision to cancel the Company’s licence is not appealed within the stipulated period, or if appealed on the date of the decision of the Financial Services Tribunal dismissing the appeal or the date on which the appeal is abandoned.
PUBLICATION
This notice is being published as part of the MFSA’s standard enforcement policy and in terms of Article 16(8) of the MFSA Act.
UPDATE
On 27 February 2022, the Authority was notified that an appeal dated 25 February 2022 was filed before the Financial Services Tribunal within the period established by law, in relation to the MFSA’s decision above.
