Financial Crime World

Here is the rewritten article in Markdown format:

Malta Banking Industry Standards Face Scrutiny

======================================================

The Malta Financial Services Authority (MFSA) is responsible for overseeing entities authorized under the Financial Institutions Act (Cap 376). The regulator employs a risk-based approach to effectively supervise financial institutions, categorizing them into two broad groups:

Payment Institutions and Electronic Money Institutions

  • Those undertaking lending, leasing, and foreign exchange services

The MFSA’s risk-based approach involves assessing both system-wide and individual risks posed by each institution to coordinate its supervisory activities and allocate resources accordingly. Those deemed to pose the greatest risk are subject to enhanced ongoing supervision, which includes:

On-Site Inspections and Off-Site Monitoring

  • Regulatory returns
  • Financial statements

The Financial Institutions Act and Subsidiary Legislation

The Financial Institutions Act, along with subsidiary legislation, provides the framework for regulating and supervising financial institutions in Malta. The Act empowers the MFSA to:

  • Grant, refuse, cancel, or suspend licenses
  • Impose administrative penalties as needed

Enabling clauses allow the Minister responsible for financial services to issue subsidiary legislation and the MFSA to issue rules to further supplement the Act’s provisions.

Circulars and Consultation Documents

The Authority has issued a series of Circulars related to banking supervision, providing updates on regulatory matters and informing the industry of proposed decisions and relevant documents published by the European Banking Authority (EBA). The MFSA also issues:

Consultation Documents

  • Explain new regulatory requirements
  • Gather feedback from credit institutions

Following consultation periods, the Authority publishes Feedback Statements summarizing comments received and its final position on each topic.

Focus on Risk-Based Supervision

With a focus on risk-based supervision, the MFSA’s efforts aim to ensure the stability and integrity of Malta’s banking industry while promoting a robust regulatory framework.