Malta Financial Sector Regulatory Bodies Take Center Stage
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Overview
The Malta Financial Services Authority (MFSA) is responsible for overseeing entities authorized under the Financial Institutions Act (Cap. 376). To ensure effective supervision of financial institutions, the MFSA employs a risk-based approach.
Categories of Entities
- Payment Institutions and Electronic Money Institutions: These entities provide payment services and/or issue electronic money.
- Other Activities: These entities offer activities such as lending, financial leasing, guarantees, foreign exchange services, and money brokering.
Regulatory Framework
The Financial Institutions Act, supplemented by the Financial Institutions Rules and subsidiary legislation, transposes the provisions of the second Payment Services Directive and the second Electronic Money Directive. This framework ensures that authorized payment and electronic money institutions comply with relevant EU directives.
Risk-Based Approach to Supervision
- System-Wide Risks: The MFSA assesses system-wide risks posed by each institution.
- Individual Risks: Those deemed to pose the greatest risk are subject to enhanced ongoing supervision, including:
- On-site inspections
- Off-site monitoring through regular regulatory returns and financial statements
Additional Resources
The MFSA has published a range of circulars and consultation documents related to banking supervision, providing industry stakeholders with updates on regulatory matters, proposed decisions, and relevant documentation from the European Banking Authority (EBA).
- Banking Supervision Circulars: Outlines requirements for credit institutions.
- Conduct Consultations and Feedback Statements: Invites industry feedback on new regulatory proposals.
Commitment to Transparency and Stakeholder Engagement
The MFSA’s commitment to transparency and stakeholder engagement is evident in its publication of consultation documents and feedback statements.