Financial Crime World

MFSA’s Regulatory Framework and Supervisory Functions

The Malta Financial Services Authority (MFSA) is responsible for regulating and supervising financial services in Malta, promoting market integrity, and ensuring consumer protection. The Authority operates within a framework of internal rules, technical standards, and guidelines issued by European Supervisory Authorities, which are transposed into national legislation.

Regulatory Cooperation

The MFSA has established a network of memoranda of understanding (MoUs) with regulatory bodies in 29 jurisdictions worldwide, as well as with international organizations such as the International Organisation of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS).

Organizational Structure

The MFSA’s organizational structure includes:

  • Board of Governors: sets the Authority’s strategy and policies.
  • Executive Committee (Ex Co): responsible for implementing the strategy, approving regulations, issuing licenses, and supervising licensed entities.
  • Regulatory Committee (Reg Co): a sub-committee of Ex Co that coordinates regulatory, authorisation, and supervisory matters.
  • Other committees:
    • Audit Committee
    • Risk Committee
    • AML/CTF Coordination Committee
    • Enforcement Decisions Committee
    • Resolution Committee

Supervisory Functions

The MFSA’s responsibilities include:

  • Regulating, monitoring, and supervising financial services in Malta.
  • Promoting market integrity, consumer protection, fair competition, and consumer choice.
  • Monitoring trading practices and providing information to the public.
  • Advising the government on policy formulation and making recommendations on regulatory matters.

Supervisory Methods

The MFSA carries out its supervisory functions through a combination of ongoing off-site supervision and onsite visits. The Authority has been vested with extensive powers, including the ability to:

  • Require information from licensed entities.
  • Appoint inspectors for in-depth investigations.
  • Issue directives and enter premises for the purpose of obtaining information.
  • Issue public warnings, suspend or cancel licenses, and restrict operations.

Sanctions

The MFSA may impose administrative penalties on license holders who breach regulatory requirements. All sanctions are published on the Authority’s website.