By Jesmond Gatt - Chairman and Kenneth Farrugia - CEO, MFSA
In the rapidly evolving world of financial services, trust remains the cornerstone upon which our industry is built. The Malta Financial Services Authority recognises the immense responsibility that comes with overseeing and regulating this dynamic sector. Reflecting on the past year in its newly published Annual Report for 2023, the Authority highlighted its commitment to foster a financial environment that prioritises consumer protection while encouraging innovation and growth. This balance is critical for upholding the stability and integrity of Malta's financial services industry.
Trust is not a static attribute; it is cultivated through consistent actions, transparent communication, and a steadfast dedication to fairness and integrity. Over the past year, we have taken significant strides to enhance trust within the financial sector by focusing on humanising the industry. Financial services are about people’s lives, aspirations, and futures, not merely about numbers and transactions. Thus, our regulatory framework is designed to protect consumers, ensuring access to safe, transparent, and reliable financial products and services.
Consumer protection is a complex and multifaceted task that requires rigorous oversight, solid regulatory mechanisms, and an empathetic understanding of the public's needs and concerns. In 2023, we intensified our efforts to safeguard consumer interests through initiatives aimed at enhancing transparency and accountability within the sector. Stringent measures have been implemented to ensure that financial institutions operate with the highest ethical standards, fostering an environment where consumers feel secure and valued.
We also highlighted the importance of the capital markets, which remain a key source of liquidity and investment for firms. The MFSA has actively participated in discussions on the EU clearing and listing packages and the Benchmarks Regulation, reinforcing Malta’s position in the European Capital Markets Union. We are mindful of the role of capital markets in the ESG revolution and green transition, pledging continued support in these areas.
Reflecting on our past achievements, we note significant transformations driven by a commitment to maintaining Malta’s reputation as a dynamic, reliable, and trustworthy financial services jurisdiction. The MFSA has boosted supervisory interactions by 50% compared to the previous year, adopting a risk-based approach to focus resources on areas of greatest concern. These efforts include comprehensive supervisory reviews and meetings across all sectors, with half of the inspections incorporating anti-money laundering and counter-terrorism financing elements.
Enforcement remains a cornerstone of our effectiveness. In 2023, we completed over 1,300 integrity checks and carried out more than 400 investigations to ensure that financial service providers and authorised individuals maintain high conduct standards. Innovation has also been a key driver of regulatory effectiveness, with the introduction of the Notified Professional Investor Fund (PIF) framework, designed to reduce regulatory complexity and operating costs.
We emphasise the importance of stakeholder engagement and international collaboration. The MFSA has strengthened its relationships with financial entities, industry associations, and consumer groups, fostering a collaborative approach to regulation. Our active participation in international forums and discussions with European Supervisory Authorities underscores our commitment to maintaining high standards of regulation and supervision.
The MFSA has hosted several successful industry events, such as the Sustainable Finance Conference and the "Future of Banking Supervision" conference, which brought together scholars, industry leaders, and regulators to discuss the future of sustainable finance and the critical role of banks in facilitating a sustainable economic transition.
To remain a leading regulator, the MFSA has made significant investments in technology and human resources. Over the past year, we have continued the implementation of a comprehensive digitalisation strategy, to further streamline regulatory submissions and supervisory workflows. We continue to improve our efficiency and enhance our ability to conduct data-driven supervision and regulatory oversight.
Investing in people is central to our enablement strategy. We prioritise continuous professional development through the Financial Supervisors Academy (FSA), offering training programmes and resources to enhance staff skills and competencies. A collaboration with the University of Malta has led to the launch in 2024 of a new post-graduate course focused on building the capacity of regulatory and compliance professionals.
Looking ahead, we remain committed to evolving the regulatory framework to address emerging challenges and opportunities, protect consumers, and promote growth. The MFSA aims to foster an environment where trust is earned and maintained through consistent, transparent, and ethical practices. As Malta’s financial services sector continues to demonstrate resilience and growth, our focus will remain on enhancing operational efficiency, supporting innovation, and ensuring robust supervision and enforcement.
The achievements of the past year underscore the effectiveness of our regulatory frameworks and the dedication of our team. We express gratitude to all supranational authorities and stakeholders for their continued trust and support as we work together to build a brighter future for Malta’s financial services sector.
