MFSA Regulatory Entity

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Malta Financial Services Authority- MFSA is the main regulatory body of Malta. It was established in July 2002. The headquarters are in Birkirkara.

It replaced its preceding agency Malta Financial Services Centre (MFSC), as the primary financial regulator of the Republic of Malta. MSFA took up responsibilities of the Central Bank of Malta and the Malta Stock Exchange as well.

Malta Financial Services Authority (MFSA) administrates investment, insurance, banking, pension and financial markets in Malta. On top of that, it also handles the securities markets in Malta.

MFSA ensures a fair and transparent market. The interests of both the consumer and the institutions are kept in mind. As the main regulatory body of Malta, MFSA works to provide a healthier and prosperous financial market.

The goal is to promote the national and economic well-being of the country.

History of MFSA

MFSA was formed in 2002. Apart from being the single regulatory authority of financial markets, it also acts as the listing and resolution authority.

MFSA was set up through the Act of Parliament under Chapter 330 of the laws of Malta. In addition to that, it serves as an advisory to the government on devising policies regarding the financial services industry.

Since 2018, MFSA regulates the Virtual Financial Assets as well. The core purpose is to uphold the integrity of the financial industry in Malta.

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MFSA mission

MFSA’s mission is to establish a strong and independent financial system. It has three main objectives:

  • Support a healthy and competitive market
  • Uphold the integrity and independence of the financial market
  • Protect the Consumer

MFSA regulated entities

Malta Financial Services Authority regulates and supervises the following entities:

  • Banks
  • Authorisation
  • Pension supervision
  • Insurance supervision
  • Securities and markets supervision
  • Legislation
  • EU and international affairs
  • Credit Institutions
  • Financial Institutions
  • Sustainable Finance
  • Trustees and Fiduciaries
  • Supervisory ICT risk and cybersecurity
  • Compensation Schemes
  • Financial Crime Compliance
  • FinTech
  • Enforcement

MFSA roles and responsibilities

MFSA has multiple responsibilities that include reviewing business practices, assisting the government on policies, and preventing all sorts of crimes and abuses within the market.

Malta Financial Services Authority plays the leading role in developing a stable market for all investors and consumers.

We can list the roles and responsibilities as follows:

  • Regulation, monitoring, and supervision of financial services in Malta.
  • Provide choice to consumers
  • To preserve the general interest and expectations of consumers availing financial services
  • Keep a check on trading and business practices that relate to the supply of financial services.
  • Make and monitor laws for the financial industry. Ensure that all laws are complied with.
  • Prevent any such practices that may harm consumer or market integrity.

Functions of MFSA

MFSA performs multiple functions for the prosperity and well-being of the financial markets in Malta. They can be categorised as follows:

  • Banking supervision
  • Conduct supervision
  • Financial stability
  • People and culture
  • Resolution
  • Risk management

Banking supervision

As the name suggests, this department manages all banking-related activities in Malta, including various payment institutions such as PayPal, Transferwise, etc.

The administrative functions include examining all licensed institutions on-site and off-site. The purpose is to ensure that all licensed institutions are following the regulations and conditions.

Conduct Supervision

This department keeps a check on firms providing services in the banking and insurance centre. In addition, they supervise the product design.

Moreover, they also evaluate the firm’s relationship with the consumers. Finally, conduct supervision makes sure that consumers are treated fairly by the financial institutions.

This is very crucial for the growth of the financial industry. Institutions that prioritise consumer conduct are likely to gain their consumer’s trust, which will benefit the firm in the long run.

Financial stability

The financial stability team manages risks and provides cost-effective solutions to combat problems.

The department undertakes the responsibility of implementing policies formed for achieving financial stability objectives.

They recommend regulatory measures as per the demand of the situation. The core purpose is to maintain a financial balance.

People and culture

Employees are the strength of every agency. The people and culture sector manages the human resources. This department is tasked to hire all the talented professionals.

Moreover, they ensure a safe and healthy workspace environment which is integral for the success of any organisation.

Training of employees, developing training programs in partnership with suitable academic institutions, and provisions of ethics framework, Anti-Fraud Policy, etc., are all looked after by this sector.

The five core values of MFSA are integrity, dependability, trustworthiness, excellence, and independence. Therefore, the department looks for these qualities in their employees during recruitment.

Resolution

The resolution department has to create resolution plans for banks and investment firms. Other than that, it guides the Resolution Committee regarding the application of resolution tools as per demand.

The department also helps the committee in deciding whether an institution should go into liquidation or resolution.

The resolution team builds a relationship with European institutions and local authorities to perform its job with efficiency.

Risk management

Managing risks is very crucial for the success of any financial regulator, which is why MFSA has a separate department for it.

The department is responsible for analysing the risk and devising plans and strategies to lower the risks.

The department makes sure that the risk factor of the agency is complacent with the criteria set by the European Supervisory Authority.

International Relations

Malta Financial Services Authority is a member of many international financial regulatory bodies as well, such as the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), European Securities and Market Authority (ESMA).

It is also a part of the International Organization of Securities Commission (IOSC) and the International Association of Insurance Supervisors (IAIS).

Bottom line

The MFSA was formed for regulating and supervising various financial sectors of Malta. This is very crucial for forming a sustainable economic system within the country.

The primary goals of the agency include safeguarding the interest of both the consumer and the institution. Besides that, monitoring risks and preventing crimes and abuses is also a part of MFSA’s duties.

MFSA aspires to establish transparent and unbiased financial markets.

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