Bank Compliance Procedures in Malta: A Tight Regulatory Noose
The Maltese financial services industry has long been under scrutiny due to its complex and evolving regulatory landscape. The sector is subject to stringent rules and regulations, leading some operators to complain about over-regulation. However, the risks of non-compliance are a major concern for regulated entities in Malta.
The Importance of Compliance Officers
Compliance officers play a vital role in guiding regulated entities through the maze of regulation and helping them identify and manage the risk of non-compliance. They must ensure that the regulated entity abides by all license conditions, demonstrates good faith, displays honesty and integrity, and acts in a competent manner.
Responsibilities of Compliance Officers
Some general responsibilities of compliance officers include:
- Ensuring the regulated entity abides by all license conditions
- Demonstrating good faith and acting in a manner that shows care and concern for clients, potential clients, and the general public
- Displaying honesty and integrity, and acting in a competent manner
The Role of the Malta Financial Services Authority (MFSA)
The MFSA expects extremely high standards of compliance from all regulated entities. Compliance officers must be vigilant in their duties and take all reasonable steps to ensure that the license holder’s staff are aware of and familiar with relevant laws, rules, regulations, and guidance.
Key Obligations for Compliance Officers
To meet these obligations, a compliance officer must:
- Have a deep knowledge of all applicable laws, rules, and regulations
- Establish, implement, and maintain robust policies and procedures to identify acts or omissions that may pose a risk to the licensed entity
- Take steps to minimize those risks
- Inform the relevant parties, including the board of directors and the MFSA, in the event of wrongdoing
- Record in writing all breaches and the resulting action taken
The Challenges Faced by Compliance Officers
The role of a compliance officer is complex and demanding, with personal liability being a significant concern. Compliance officers must be aware of their responsibilities and take steps to stay up-to-date on key business issues and regulatory developments.
Effective Leadership and Culture
In an era of over-regulation, compliance officers must strive to engender a culture of committed compliance within the organization, rather than simply adhering to the letter of the law. This requires effective leadership skills, building trust, adopting a proactive approach to compliance, and promoting discussions on ethics and morality.
The Role of Technology in Compliance
Technology can be both a sword and a shield for compliance officers, with regulatory technology solutions helping to automate cumbersome compliance processes and procedures. However, it also poses risks, such as cybercrime, which can have far-reaching consequences for companies and the integrity of the financial system.
Conclusion
Ultimately, the role of a compliance officer in Malta is that of an informal social control agent, playing a crucial part in industry self-regulation and ensuring that regulated entities operate within the bounds of the law.