The Malta Financial Services Authority has issued new guidelines aimed at ensuring that only "fit and proper" persons are granted or continue to have access to Malta’s financial services sector.
The guidelines, published in July, lay out five areas upon which the regulator assesses current or potential operators in the sector, these being: competence, reputation,solvency, conflicts of interest and independence of mind and time commitment.
Persons without the appropriate level of knowledge, professional expertise and experience will not be considered “fit and proper” under these guidelines, nor will those whose finances aren’t sound, who are subject to any bankruptcy proceedings or who have failed to meet their debts. The regulator is requesting that those in the sector provide reasonable assurance that they are of good repute and intend to act in an honest, ethical and trustworthy manner. Persons with conflicts of interest and those who are unable to make their own sound, objective and independent decisions and judgments will also be failing to abide by the guidelines. Moreover, the Authority wants to ensure that all those operating in the sector can commit sufficient time to their functions, and do not have too many commitments on their plate, which may hinder the performance of their duties in an efficient and effective manner.
In particular, the MFSA has upped its expectations with regard to AML throughout the supervisory lifecycle process, with a stronger emphasis at the onboarding stage. Indeed, the Authority is committing itself to focusing on the shareholding structure, governance framework (including key functions), internal controls and business models presented, and taking a holistic view of applications from a prudential, conduct and anti-money laundering perspective.
Additional specialised resources - human and technological - are being allocated to the monitoring of approved shareholders, board members and other key function holders. This would allow for ongoing due diligence to be carried out on all involved parties at regular intervals throughout the life cycle of each regulated entity.
