Malta’s Financial Institution Security Measures Under Scrutiny

The Malta Financial Services Authority (MFSA) has been entrusted with ensuring the stability and security of the financial sector in Malta. As part of its key responsibilities, the MFSA oversees entities authorized under the Financial Institutions Act.

Risk-Based Approach

To effectively carry out its duties, the MFSA employs a risk-based approach, which assesses both system-wide and individual risks posed by each financial institution. This approach enables the authority to allocate resources more efficiently, focusing on institutions that pose the greatest risks.

• Those deemed to be at higher risk are subject to enhanced ongoing supervision, including regular on-site inspections and continuous off-site monitoring of their activities.
• The MFSA’s risk-based approach allows it to prioritize its resources, ensuring that the most vulnerable entities receive extra attention and scrutiny.

Categories of Financial Institutions

The MFSA is responsible for overseeing two broad categories of financial institutions:

• Payment Institutions and Electronic Money Institutions: These entities undertake payment services and/or electronic money issuance.
• Other Financial Institutions: These entities engage in activities such as lending, leasing, guaranteeing, foreign exchange services, and money brokering.

Compliance with EU Regulations

The MFSA has implemented the provisions of the second Payment Services Directive and Electronic Money Directive, ensuring compliance with EU regulations. The authority also issues circulars and consultation documents to keep the industry informed on regulatory matters, proposed decisions, and relevant publications from the European Banking Authority (EBA).

Ensuring Security and Stability

The MFSA’s rigorous oversight ensures that Malta’s financial institutions maintain high levels of security and stability, safeguarding the interests of both consumers and investors. As the country continues to grow its financial sector, it is essential for the authority to remain vigilant in its efforts to prevent potential risks and threats.

Stay Tuned for Updates

We will continue to provide you with updates on this developing story as we monitor Malta’s financial regulatory landscape.