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Malta Financial Services Authority. Malta as a finance centre: A Model Of Stability in a Changing Landscape. MALTA. Framework for the Development of Financial Services. Financial Services Legislation. Financial Services Legislation. Primary Legislation Banking Act

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Malta Financial Services Authority


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slide1

Malta Financial Services Authority

Malta as a finance centre:

A Model Of Stability

in a Changing Landscape

malta

MALTA

Framework for the Development of Financial Services

financial services legislation
Financial Services Legislation

Financial Services Legislation

Primary Legislation

  • Banking Act
  • Financial Institutions Act
  • Insurance Business Act
  • Insurance Intermediaries Act
  • Investment Services Act
  • Special Funds Act [Retirement Pensions Act]
  • Trustees and Trusts Act
  • Malta Financial Services Authority Act
  • Central Bank of Malta Act
financial services legislation1
FinancialServices Legislation

Supporting Legislation:-

  • Companies (includes Limited Partnerships) Act
  • Netting upon Insolvency Act
  • Securitisation Act
  • Prevention of Financial Market Abuse Act
  • Professional Secrecy Act
  • Prevention of Money Laundering Act
regulation
Regulation

Malta Financial Services Authority (MFSA)

  • Single regulator for financial services
  • Regulates banking, financial institutions, insurance companies, investment services companies, securities, stock exchanges and listing, trust management companies, pension schemes
  • Autonomous public institution, self-funded

Avoidance of Prescriptive Regulation to allow promoters the flexibility to operate

main objectives of the mfsa
Main Objectives of the MFSA
  • to regulate, monitor and supervise financial services in Malta;
  • to promote the general interests and legitimate expectations of consumers of financial services, and to promote fair competition practices and consumer choice;
  • to advise the Government generally on the formulation of policies in the field of financial services, and to make recommendations to Government as to any action which in the opinion of the Authority, it would be expedient to take in relation to matters in respect of which the Authority has such duties;
mfsa structure
MFSA - Structure

MFSA

Legal & Int Affairs Unit

Board of Governors

Chairman

Board Secretary

Co-ordination Committee

Company Registry

Board of Management

and Resources

Supervisory Council

Director General

Registrar of Companies

Chief Operations Officer

functions board of governors
Functions – Board of Governors
  • Board of Governors is composed of seven members including the Chairman. Chairman and Governors appointed for a period of up to five years and their appointment may be renewed for further periods of five years;
  • Board of Governors sets policy;
  • The Legal and International Affairs Unit acts as Secretary to the Board of Governors and the Co-Ordination Committee.
remit of the supervisory council
Remit of the Supervisory Council
  • Art 10. (1) of the MFSA Act states:-
    • The Supervisory Council shall be responsible for the approval of and for the issuing of licences and other authorisations, for the processing of applications for such licences and authorisations, and for the monitoring and supervision of persons and other entities licensed or authorised by the Authority in the financial services sector.
board of management resources
Board of Management & Resources

MFSA Act Art 11 states

“.....responsible for carrying out the day-to-day management and finances of the Authority, including business development and ancillary services and for the general co-ordination of the Authority’s administrative affairs and shall be composed of the persons responsible for such activities as may be designated by the Board of Governors”

co ordination committee
Co-Ordination Committee

Chief Operations Officer - Board of Development and Resources

slide14

Membership of International Organisations

  • New EU Supervisory Architecture:-
    • European Securities & Markets Authority (ESMA)
    • European Banking Authority (EBA)
    • European Insurance and Occupational Pensions Authority (EIOPA)
  • International Association of Insurance Supervisors (IAIS)
  • International Organization of Securities Commissions (IOSCO)
  • International Organisation of Pensions Supervisors (IOPS)
slide15

Memoranda of Understanding

currently in force

slide16

MFSA

Human Resources

international evaluation
International Evaluation
  • FATF – Financial Action Task Force (1999)
  • OECD – Organisation for Economic

Co-operation and Development (2000)

  • Council of Europe Money Laundering Committee (2001)
  • EU Peer Review (2002)
  • International Monetary Fund – full FSAP (2003)
international evaluation1
International Evaluation
  • “Malta embraces international tax standards for transparency and exchange of information and has joined OECD member countries in committing to eliminate harmful tax practices.”

(OECD Official News Release, June 2000)

  • “ a comprehensive and robust legal framework and a particularly well-regulated financial sector”

(Report of the Council of Europe Money-laundering Committee, April 2003)

international evaluation2
International Evaluation
  • The World Economic Forum Report on Competitiveness (2010-2011) Report places:
  • Malta in the 11th position in financial market development. Key performance indicators for the financial services sector also confirm the sector’s standing as a leading innovator in the Maltese economy.
  • Soundness of Maltese banks has been ranked in 10th position.
  • Malta is in the 12th position in the assessment carried out on the regulation of securities exchanges.
  • 8thposition on the strength of auditing and reporting standards.
international evaluation3
International Evaluation
  • “Malta’s financial system appears to be healthy and well supervised …. Malta has a comprehensive legal framework and strongly adheres to most of the international standards and codes…. The authorities have undertaken major efforts in strengthening the supervisory framework”

(International Monetary Fund, Financial System Stability Assessment (FSSA), September 2003)

slide25

Independent Assessment based on:Basel Core Principles (BCP)International Organisation of Securities Commission (IOSCO) International Association of Insurance Supervisors (IAIS)

slide26

Assessors:-Piero Ugolini (former Assistant Director – IMF and mission Chief of the IMF/World Bank team that conducted the 2002/3 FSAP exercise)Richard Nun (former Deputy Director – Texas Banking/Finance Commission, Austin-Texas; and currently peripatetic expert in banking Supervision – IMF and Centennial Group – Washington D.C., USAMichael Kehr, Senior Advisor International Policy/Affairs, Bafin, Bundesanstalt fur, Finanzdienstleistungsaufsicht, Federal Financial Supervisory Authority, Germany

2002 3 fsap overall outcome
2002/3 FSAP Overall Outcome
  • Malta’s financial sector is sound and well supervised but very concentrated
  • Very concentrated sector and strong reliance on real estate properties collateral
  • Insurance and Securities : not systemically important
  • Insurance companies are healthy
the 2010 assessment bcp iais iosco
The 2010 Assessment: BCP-IAIS-IOSCO

What’s new?

  • World wide dissemination of international standards and best practices
  • Entry into EU – 2004
  • Concentration of Supervision in MFSA
  • Expansion of financial sector and reputational risk/benefit
2010 overall outcome
2010 Overall Outcome
  • Positive : progress noted in all assessments
  • Banking sector : the most clear progress
  • Insurances : recent extensive changes in the Principles do not allow a proper comparison with 2003
  • Securities : progress from an already relatively 2002/3 positive assessment
bcp comparison
BCP Comparison

2002/3 Assessment

Compliant : 11

Largely Compliant: 12

Materially NC: 1

  • 2010

Assessment

  • Compliant :21
  • Largely Compliant: 5
  • Materially NC : 0
insurance iais
Insurance - IAIS
  • October 2000 methodology : 17 Principles
  • October 2003 methodology : 28 Principles
iais principles broad comparison 2002 3 2010
IAIS Principles - Broad Comparison 2002/3-2010

2002/3---17 ICP

Observed: 12

Broadly observed: 3

Materially non observed: 2

2010 ---28 ICP

Observed : 22

Largely observed: 4

Partly observed : 2

Non observed : 0

iosco 2002 3 2010 30 principles
IOSCO 2002/3- 201030 Principles

2002/3

Implemented : 22

Broadly implemented:0

Partly implemented: 6

Non-implemented: 0

Not applicable: 2

  • 2010
  • Implemented: 24
  • Broadly implemented: 4
  • Partly implemented: 0
  • Non implemented: 0
  • Not applicable: 2
conclusions
Conclusions

Overall progress and strong framework

-- Entry in EU

-- Implement international standards and best practices

-- Reorganization at the MFSA

-- Good communication and transparency

malta1

MALTA

Critical Success Factors

l egislation
Legislation
  • Flexible & versatile legal framework
  • Civil Law jurisdiction
  • Business legislation based on English law principles
  • Old, established juridical system
  • Laws and Regulations published in English and Maltese
financial reporting
Financial Reporting
  • IFRS – International Financial Reporting Standards since 1997
  • Accounting records and bank accounts in foreign currencies
  • PWC, Deloitte, Ernst & Young, KPMG, Grant Thornton, PKF, BDO, Mazarsetc
human resources
Human Resources
  • Multilingual community
  • English is the working language. Well-spoken Italian,French, Spanish, German;
  • Free market for labour;
  • Availability of multilingual graduates in disciplines related to financial servicesas also administrative and clerical staff;
  • High levels of productivity.
cost structures office rent euros per sq m per annum
Cost structures - Office Rent(Euros per sq.m. per annum)

Dublin 524

London 984

Paris924

Frankfurt 555

Malta 135

Source: CB Richard Ellis – Global Market Rents (Nov 2010) and MFSA Data

taxation
Taxation
  • Modern and competitive tax regime
  • Tax-efficient base for outsourcing activities
  • Tax system based on the full imputation system:
  • 35% tax on company profits ……
  • shareholders receive full credit for any tax paid by the company from which a dividend is received
  • Double tax treaties with 56 countries
the opportunities
The Opportunities
  • Funds Services
  • Managed insurance and Re-Insurance Companies
  • Management of Trusts
  • Management of Pension Schemes
  • Financial Institutions
  • Banking Services
slide43

COMPETITIVE HIGH QUALITY SKILLS

STEADFAST REGULATION

AGILITY IN THE MARKET

MALTA- the culture of getting things done

slide44

Thank you!

.

www.mfsa.com.mt