One of the Authority’s priorities is to achieve a high level of quality and effective supervision as a means to ensure the stability and sustainability of the local financial services sector. In its ongoing pursuit to become an efficient and effective supervisor, in 2021, the MFSA has:

• enhanced its financial stability monitoring to safeguard the domestic financial system, specifically for the banking, securities and markets and insurance sectors.
• continued to invest in a quality workforce by providing further training though its Financial Supervisors Academy and supporting secondments within international institutions and foreign competent authorities.
• progressed in its digital transformation journey, particularly through the launch of the Authorisation Process Service Charter which sets out the MFSA’s time commitments for applicants and what is expected of them.
• extended its outreach through the circulars it issued and 18 events that it organised for the industry, as well as the warnings and notices it has published, on top of the consumer education campaigns to keep the general public informed.
• taken more enforcement actions, as recorded in its monthly supervisory and enforcement dashboard available on mfsa.mt.
• continued to embed operational risk management practices within its activities, with the aim of establishing a structured risk management process across the organisation.

Since compliance is an important pillar of sustainability focus, in 2021 the MFSA continued to nurture a culture of compliance through the development of holistic mechanisms within regulated entities.

Consumer protection is at the heart of the Authority’s mission. A study on consumer behaviour relating to home insurance, the launch of a Payment Account Fees Comparison Tool on its website, and the assessment of product governance requirements and the selling processes for locally issued financial instruments to retail

clients, are among the main initiatives undertaken by the MFSA in 2021.

Financial crime compliance remains a top priority for the MFSA as more AML/CFT elements are integrated within its supervisory interactions and more training courses are attended by staff. The Authority also organised a hybrid conference on the topic, with over 350 stakeholders attending.

The Corporate Governance framework has been reviewed with the intention of raising standards across entities and authorised Persons, and with a view to address the corporate governance codes and sector-specific rules and guidance in 2022.

The Authority recognises that in order for the industry to remain economically sustainable in the long term, and relevant and well-positioned within the environment in which it operates, it must be proactive and harness the benefits of innovation.

Establishing digital finance as a key focus area cutting across sectors, the MFSA set up an internal working group to holistically address the policy developments arising from the European Commission’s package.

When it comes to operational resilience tied to digital finance, the Authority’s findings and expectations on ICT risk and cybersecurity approaches amongst entities was published, based on its supervisory interactions with licence-holders.

With the authorisation of the first VFA Service Providers in the first half of 2021, the MFSA also ramped up its supervisory practices tied to this sector.

Sustainable finance being a key priority for 2021, the Authority issued several Circulars for different legislative instruments, focusing on the requirements emanating from European frameworks, as well as guidance presented by European Supervisory Authorities.