Malta’s Financial Institutions Must Embrace Compliance Best Practices to Avoid Regulatory Headaches
Malta’s financial institutions are advised to prioritize regulatory compliance and implement best practices to avoid potential headaches from the Malta Financial Services Authority (MFSA). A recent survey revealed that many licensed entities struggle with staying up-to-date on regulatory developments, making it essential for them to dedicate sufficient time and resources to compliance.
Knowledge is Power in Regulatory Compliance
According to industry experts, knowledge is power in regulatory compliance. Staying informed about changes in legislation, regulatory standards, rules, and guidelines is crucial. Smaller institutions may find it challenging to dedicate resources to horizon scanning of regulatory developments; however, solutions exist.
- Subscribing to sector-specific regulatory updates and newsletters can provide a snapshot of the main developments.
- Periodic training on compliance requirements ensures that everyone within an institution is aware of what is required and what their role is in meeting those requirements.
Building a Robust Compliance Framework
A robust compliance framework, which includes properly documented policies, procedures, and internal controls aligned with current regulatory requirements, also plays a vital role in ensuring a smooth regulatory compliance visit. This framework should be:
- Well-structured
- Centralised
- Easily accessible
- Aligned with current regulatory requirements
Organisation is Key to Success during a Compliance Visit
Having a well-structured, centralised, and easily accessible digital documentation system makes it easier to carry out periodic reviews of documentation to determine whether anything needs to be updated. Timeliness is also essential, as licence holders are generally given short timeframes within which to provide documentation and replies.
Cooperation with the Regulator during a Compliance Visit
During the compliance visit itself, cooperation with the regulator through transparent communication goes a long way in facilitating the process. The compliance officer should:
- Act as the main point of contact
- Oversee the compliance visit to ensure that the regulator receives accurate and timely information
Maintaining an Ongoing Commitment to Regulatory Compliance
Ultimately, a successful regulatory compliance visit is predicated on whether an institution maintains an ongoing commitment to stay on top of regulatory requirements and update its documentation in line with such developments. By embracing best practices in compliance, Malta’s financial institutions can:
- Avoid potential headaches from the MFSA
- Maintain a strong reputation within the industry