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Introducer
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Tied Agent
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Definition under MFSA Rules
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A person who enters into a written arrangement with a Licence Holder, whereby such person introduces a potential customer to the Licence Holder. As a consequence of this introduction, the Licence Holder may remunerate the introducer by means of commission.
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A natural or legal person, who under the full and unconditional responsibility of only one Investment Services Licence Holder or European Investment Firm and on whose behalf it
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acts,
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promotes investment and, or ancillary services to clients or prospective clients,
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receives and transmits instructions or orders from the client in respect of investment services or instruments,
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places instruments and, or provides investment advice to clients or prospective clients in respect of those instruments or services.
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MFSA Notification of proposed appointment
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Yes
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Yes
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MFSA Notification of proposed termination
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Not a direct requirement, however recommended as a matter of best practice
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Yes
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Registration requirements
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None
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Either registered in Malta, or in another EU or EEA member State.
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Responsibility for control and monitoring of the activities
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N/A
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Senior management of the Licence Holder to look into any concerns regarding its tied agents’ fit and proper status and take the necessary action
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Regulatory obligations
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limited to arranging a meeting between the Licence Holder and the customer (but can also attend the meeting if required);
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not responsible for “Know Your Customer” checks and Licence Holder cannot rely on the Introducer’s opinion;
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cannot give investment advice, promote a certain product or undertake any Investment Services licensable activity;
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not be permitted to pass on any documentation, promoting any particular product or service on behalf of the Licence Holder, to the client/ or to assist the client in the completion of any relevant documentation;
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will not be permitted to receive any funds from clients or give any commitments on behalf of the Licence Holder;
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should not hold himself out to the general public as acting as Introducer and should not actively promote its “introducing services”.
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report to Licence Holder on a regular basis with respect to the activities carried out by the tied agent;
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pass on to the Licence Holder all the necessary documentation for processing and/or record keeping purposes, promptly;
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continue to satisfy the registration requirements and the eligibility criteria on an on-going basis;
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do not hold or control clients’ money or assets;
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comply with the requirements of the Investment Services Rules which are relevant to the activities they carry out on behalf of the Licence Holder (particularly “Conduct of Business Obligations” and “Disclosure Requirements for Information to Clients, including Marketing Communications”.)
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Exclusivity
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Yes
Introducers may only act as such for one Licence Holder.
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Yes
Should not act as tied agents for other Licence Holders and not be involved in any activities which may give rise to a conflict of interest which could be detrimental to the Licence Holder’s clients.
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Records to be kept by Licence Holder
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Record of commissions paid to each introducer
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All records, including those relating to the “Know Your Client” procedures and evidence that the tied agent has carried out the necessary suitability and/or appropriateness tests pertaining to the activities performed by the tied agents on the Licence Holder’s behalf, as are necessary to demonstrate compliance by the tied agent with the relevant provision of these Rules.
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