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Malta’s Financial Sector Regulatory Bodies Shine in Global Competition Rankings

Malta’s financial sector has maintained a healthy reputation, ranking 38th out of 141 countries worldwide in the World Economic Forum’s Global Competitiveness Report 2019. The country’s economy remained relatively unscathed by the 2008 financial crises, and as of May 2023, there are 17 locally licensed credit institutions and two local branches of foreign banks operating on the island.

Regulatory Framework

The Central Bank of Malta classifies banks into three categories: Core Domestic Banks, Non-core Domestic Banks, and International Banks. The Single Supervisory Mechanism (SSM), which came into effect in November 2014, has led to joint supervision by the European Central Bank (ECB) and the local regulator, the Malta Financial Services Authority (MFSA), of the three largest domestic banks.

Malta Financial Services Authority (MFSA)

The MFSA is also responsible for supervising Less-Significant Institutions and serves as the first point of contact for those looking to set up shop in the financial services industry in Malta. The country has positioned itself as a jurisdiction of choice for banks and other financial services players, boasting a reputation as a robust, tax-efficient, and well-regulated EU member state.

Emergence of Payment Institutions and Electronic Money Institutions

The introduction of the Payments Services Directive II (PSD II) has encouraged the emergence of payment institutions and electronic money institutions across Europe, with over 50 financial institutions obtaining their licence from the MFSA.

KPMG’s Banking and Financial Institutions Industry Experts

In this highly regulated environment, KPMG’s qualified and experienced audit, tax, and advisory teams assist the majority of banks and financial institutions on the island. Our local advisors can also leverage expertise from other member firms, including the KPMG ECB Office, which specializes in pressing issues related to the SSM.

Services Offered

KPMG’s banking and financial institutions industry experts offer a wide range of services across all areas, including:

  • External and Internal Audit Services: Providing assurance on the effectiveness of internal controls and compliance with regulatory requirements.
  • Project Managing Regulatory Authority Applications for Banking Licenses: Assisting in the preparation and submission of applications to regulatory authorities.
  • Mergers and Acquisitions Processes: Providing guidance on due diligence, financial modeling, and integration planning.
  • Assistance with Ensuring Regulatory Compliance: Helping organizations stay compliant with changing regulations and requirements.
  • Actuarial Services: Providing expertise in actuarial valuation and reporting.
  • Accounting Advice: Offering advice on accounting principles and practices.
  • Risk Management Reviews: Identifying and mitigating risks to ensure the stability of financial institutions.
  • Tax Advisory, Compliance, and Structuring Services: Providing guidance on tax planning, compliance, and structuring.

Additional Assistance

Our team can also assist in areas such as:

  • Assistance to the Compliance Function: Developing a Compliance Obliging Register, performing a Compliance Risk Assessment, delivering compliance-related training, co-sourcing the Compliance Function, setting up the Compliance Function, reviews or assistance in drafting compliance-related policies, and performance of regulatory gap analysis.
  • Assistance to the Risk Function: Developing a Risk Management Framework, delivering risk management related training, co-sourcing the Risk Function, setting up the Risk Function, reviews or assistance in drafting risk-related policies, and performance of risk assessments.
  • Other Assistance: Agreed-upon procedures, limited assurance engagements, ad hoc regulatory advice, individual and collective Board Assessments, credit institutions and financial institutions licensing, assistance in regulatory reporting, Pillar III disclosures framework setup and review, business model development, and ESG related services.

Contact Us

For more information on how KPMG can assist your organization, please contact us.