Modifications in Sandbox Regulatory Framework Announced by Malta Gaming Authority
The Sandbox Regulatory Framework‘s second phase has requested to allow the use of Innovative Technology Arrangements in the gaming sector by the MGA. This includes smart contracts and Distributed Ledger Technology usage. The declaration by Malta’s Gaming Control Board also states that the term of the framework will be extended to the 31st of December 2021.
The modifications in the Sandbox Regulatory Framework are made to display relative developments. This includes the authorization of Virtual Tokens and Financial Assets by implementing a sandbox framework environment. The guidelines regarding the use of ITA or the Innovative Technology Arrangements have been incorporated.
Even though usage of ITA by the stakeholders and operators remains in the hands of MGA, the Malta Gaming Authority has decided to bring out a road map of requirements.
Why Were the Changes Needed?
As most potential and current license holders were seeking approval from the Malta Gaming Authority, Licensee Relationship Management Systems have also been upgraded. The changes will help the license holders in integrating their business functions with the innovative technology arrangements.
However, it is worth noting that changes might continue in the sandbox environment implementation regarding the guidance on ITA usage and Virtual Financial Assets & Tokens.
These changes and the creation of a sandbox environment will depend on the developments in the regulatory and technological standards. Every innovative technology arrangements should be assessed by the registered auditors of the Malta Digital Innovation Authority. This audit will be based on the Innovative Technology Arrangements & Services Act, which is the Laws of Malta’s Chapter 592.
The ITAs will only be adopted by the Malta Gaming Authority if the inspection review shares a positive outlook for the arrangement. The MGA should be pleased after the accredited personals show cohesion with these statutory requirements.
An applicant will only be permitted to become member of the Sandbox Regulatory Framework, if they have an applicable license provided by Malta’s Gaming Control Board.
They should show objectivity towards other regulatory provisions that be consequent on other relevant legislation. This should mandatory include the Virtual Financial Assets Act or Chapter 590 mentioned in the Laws of Malta and the regulations listed under it. Although, their audit should not be limited to this law only.
The Amendments in the Sandbox Regulatory Framework
There are 4 major amendments announced by MGA in the second phase of the Sandbox Regulatory Framework. These four modifications are listed below:
- The person authorized and/ or the person having prospective authorization is needed to present a legal opinion that is certified by a registered VFA representative.
- The submitted opinion should be related to the services and the licensibility provided under the regulatory requirements of the Virtual Financial Assets Act.
- It signifies the services rendered to the authorized persons and/ or a facility provider linked through the accredited person inside the sandbox environment will be compliant with the law.
- All outsourcing service providers and/ or authorized persons need to get a license from the Malta Financial Services Authority. These people include the ones who access licensable activities in the context of the Virtual Financial Assets Act from the Laws of Malta (Chapter 590).
- All requirements about the validation of player’s exercising controls on their wallets are synchronized with the regulations of the Anti-Money Laundering and CFT committees.
- The specifications that are related to the assessment of innovative technology arrangements are simplified. These specifications will be performed by registered auditors of the Malta Digital Innovation Authority.
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