Financial Crime World

Malta Focus: Financial Regulation and Governance in Malta Takes Center Stage

In its ongoing pursuit of ensuring financial stability, integrity, and consumer protection, the Malta Financial Services Authority (MFSA) has identified corporate governance as a top priority. This strategic focus is designed to promote responsible management, long-term sustainability, and the creation of value for all stakeholders.

The Importance of Corporate Governance

The MFSA’s emphasis on good corporate governance stems from its recognition that strong compliance cultures are essential for achieving regulatory outcomes. To this end, the Authority seeks to encourage entities under its remit to prioritize effective governance practices.

Malta’s Legislative Framework

Maltese law provides a robust legislative framework for corporate governance, with the Companies Act serving as the primary source of authority. This legislation sets out the requirements for various commercial partnerships and establishes key accountabilities for:

  • Boards of directors
  • Shareholder rights
  • Transparency obligations

MFSA Guidelines and Codes

In addition to the sector-specific regulatory frameworks, the MFSA has developed several guidelines and codes to provide further guidance on corporate governance best practices. These include:

  • MFSA Corporate Governance Code: a set of principles and supporting provisions applicable to all unlisted entities authorized by the Authority
  • Corporate Governance Manual for Directors of Collective Investment Schemes: designed specifically for directors of funds operating in or from Malta
  • Corporate Governance Guidelines for Public Interest Companies: aimed at promoting best practices in corporate governance, enhancing public confidence, and strengthening trust between investors, directors, and managers
  • Code of Principles of Good Corporate Governance: included within the Capital Markets Rules, providing a framework for companies listed on Regulated Markets

The Importance of Good Governance in Malta

By emphasizing the importance of effective corporate governance, Malta is sending a clear message to its financial institutions: good governance is essential for maintaining market integrity, protecting consumers, and driving long-term success.