Reforming the MFSA

04/09/2017

 

CEO's Notes


 

The Malta Financial Services Authority

The Malta Government has published a consultation document aimed at strengthening the MFSA. The public consultation should lead to an authority that is a 'more efficient, proactive and dynamic regulator'. It aims to ‘take the financial services sector to a new level'.

Many of us lived through the evolution of the present MFSA from the original Malta International Business Authority (MIBA) of 1989 - the Authority for 'offshore business'. That was a time when only a handful other authorities existed in Malta. The process was gradual and MIBA first transformed into the Malta Financial Services Centre (MFSC) in 1994. Those reforms marked the start of the modernisation of Malta's financial services legislation but otherwise left most of the original MIBA structure untouched. It was the creation of MFSA in 2002 that triggered a more thorough reorganisation. But the need to safeguard the transition from MFSC to MFSA and the continuity of all licences and actions from the old structure also created limitations.

The MFSA became the sum-total of various regulatory functions accumulated over the years. These included the various financial services, company registry, securities listing and consumer regulation. A single supervisory and regulatory authority with increasingly onerous international obligations. All built on the 1989 legislation modified almost thirty times since then.

Like any public authority the MFSA must be robust and ensure cohesion, efficiency and accountability. As a financial services authority it must additionally promote trust and credibility in the jurisdiction and its players. If, as the consultation document states, a future MFSA is to be stronger and well set to take the industry to a next level, then its architecture requires a major and radical overhaul.

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