Conduct of Business Rulebook Revisions
News    ·   19-11-2021

AUTHOR: Andrew Caruana Scicluna; Kyle Debattista

On 16 November 2021, the Malta Financial Services Authority issued a circular informing the investments and insurance sectors that the Conduct of Business Rulebook (“COBR”) has been revised to implement Directive (EU) 2021/338 amending Directive 2014/65/EU (“MiFID II”) as regards information requirements, product governance and position limits, and Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment firms, to help the recovery from the COVID-19 crisis.

The amendments to the COBR are amongst others:

(a)    Investment firms are to be exempt from the product governance requirements where the investment service they provide relate to bonds with no other embedded derivative than a make-whole clause,[1] or where the financial instruments are marketed or distributed exclusively to eligible counterparties;

(b)    services provided to professional clients and eligible counterparties are exempt from the costs and charges disclosure requirements, except with regard to the services of investment advice and portfolio management;

(c)     services provided to professional clients are exempt from the cost-benefit analysis requirement in the case of switching – however, professional clients should have the possibility to opt-in to the cost-benefit analysis; and

(d)    investment information should no longer be provided on paper (current definition of ‘durable medium’) but should be provided, as a default option, in electronic format – however, retail clients should have the possibility to opt-in and request the provision of investment information on paper.

The amendments made to MiFID II (and as transposed into the COBR) will apply as from 28 February 2022. Should you have any queries on the new revisions to the COBR or require any further information on these latest changes, kindly get in touch with Andrew Caruana Scicluna ( and/or Kyle Debattista (

[1] means a clause that aims to protect the investor by ensuring that, in the event of early redemption of a bond, the issuer is required to pay to the investor holding the bond an amount equal to the sum of the net present value of the remaining coupon payments expected until maturity and the principal amount of the bond to be redeemed.

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