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Malta’s Financial Regulator Simplifies Liquidity Management for Foreign Banks

Streamlining Regulations to Attract International Financial Institutions

Valletta, Malta - The Malta Financial Services Authority (MFSA) has introduced new regulations aimed at making it easier for foreign banks to operate in the country while maintaining their liquidity. This move is expected to attract more international financial institutions to set up shop in Malta.

Simplified Authorization Process

Under the revised rules, credit institutions established in other European Union (EU) Member States can extend their banking operations to Malta by setting up a branch or providing cross-border services without needing to obtain a new authorization. This is provided that the requirements have already been satisfied at the authorization stage by the competent authority of the home Member State.

Streamlined Licensing Process

The MFSA has also streamlined the licensing process for foreign banks, requiring:

  • An initial capital of at least €5 million
  • At least two individuals effectively directing its business
  • The regulator must be satisfied that:
    • Shareholders and controllers are suitable persons
    • There are no close links with other parties that could prevent effective supervision

Changes to the Banking Act

The new regulations come into effect following changes to the Banking Act, which defines the activities covered by a banking licence. These include:

  • Accepting deposits from the public
  • Lending to others
  • Investing for account and at risk of the person accepting the money

Commitment to Creating a Business-Friendly Environment

“The MFSA is committed to creating a business-friendly environment that encourages foreign banks to operate in Malta,” said [Name], Head of Banking Supervision at the MFSA. “Our revised regulations will help to simplify liquidity management for foreign banks, making it easier for them to establish and maintain a presence in our jurisdiction.”

Key Takeaways

  • Foreign banks can extend their banking operations to Malta by setting up a branch or providing cross-border services without needing to obtain a new authorization.
  • The MFSA has streamlined the licensing process, requiring an initial capital of at least €5 million and ensuring that the company has at least two individuals effectively directing its business.
  • The regulator must be satisfied that the shareholders and controllers are suitable persons and that there are no close links with other parties that could prevent effective supervision.
  • The new regulations come into effect following changes to the Banking Act, which defines the activities covered by a banking licence.

For More Information

Contact [Name], Head of Banking Supervision at the MFSA, on [Phone Number] or [Email Address].