The Malta Financial Services Authority has laid down its supervisory expectations for licensed entities, supported by a number of best practices which these entities are expected to adhere to.

Through the publication of a document entitled “Supervision: Risks Identified, Weaknesses and Expected Controls – A Cross-Sectoral Analysis”, the MFSA also identifies the key risks that authorised entities operating in the financial services sector might pose to their clients and the market in general and  highlights the common weaknesses which the Authority has identified in the course of its supervisory work.

In line with the Authority’s strategy of enhancing its supervisory engagement, the MFSA will, in the coming weeks, also be publishing a document setting out its Supervisory Priorities for 2020. This document will indicate how, through supervision, the MFSA will be addressing the weaknesses identified in the document being published today.

The MFSA emphasises that it expects regulated entities to discuss the contents of this document with their Board of Directors (or equivalent administrative body) including the executive management team and assess how the highlighted points may apply to their business.  Firms are expected to address any misalignments between their internal frameworks and practices and the expectations as set out in this document and to establish the necessary processes in order to ensure that the firm will continue to meet such expectations on an ongoing basis.

MFSA Chief Officer – Supervision, Marianne Scicluna commented that: “The Authority is planning to intensify its supervisory work, both in terms of coverage and standard. The MFSA has fused the three pillars of its supervisory strategy – prudential, conduct and AML Supervision – to ensure a holistic and more efficient supervisory approach. The publication of the Authority’s Supervisory Expectations is part of our commitment to enhance the supervisory engagement with authorised entities, in promoting and ensuring sound governance, high compliance standards and conduct.”