The Malta Financial Services Authority (“MFSA” or the “Authority”) decided to proceed with imposing an administrative penalty of one hundred and forty-two thousand Euro (€142,000) and directed the Institution to:
- Cease the prefunding of charge cards with immediate effect;
- Cease the processing of payments from Insignia Global Solutions Limited and Insignia Med Limited with immediate effect; and
- Appoint an independent third-party firm to provide guidance.
Address:
Insignia Cards Limited
Level 4, Palazzo Spinola
46, St. Christopher Street
Valletta VLT 1464
Malta
Business Activity: Licensed to undertake payment services under the Second Schedule to the Financial Institutions Act (“FIA”) and to issue electronic money under the Third Schedule to the FIA.
BREACHES
The MFSA determined that the Institution was in breach of the following:
[i] Financial Institution Rule FIR/02/2020 for failure to keep proper record keeping arrangements;
[ii] Article 10B (1) of the FIA and the Financial Institutions Act (Safeguarding of Funds) Regulation, Subsidiary Legislation 376.04 for failure to properly safeguard clients’ funds;
[iii] Banking Rule 14/2020 for failure of alignment of internal documentation with statutory obligations;
[iv] Article 8B (1) of the FIA for failure to notify the Authority of the outsourcing of operational functions;
[v] Article 5(1)(c) of the FIA in relation to weak governance arrangements;
[vi] Article 16 (5) of the MFSA Act for breach of provision of information to the Authority.
REGULATORY ACTION
On 16 December 2021, the Malta Financial Services Authority decided to impose an administrative penalty of one hundred and forty-two thousand Euro (€142,000) and directed the Institution to:
- Cease the prefunding of charge cards with immediate effect;
- Cease the processing of payments from Insignia Global Solutions Limited and Insignia Med Limited with immediate effect; and
- Appoint an independent third-party firm to provide guidance.
The Malta Financial Services Authority has taken this decision by virtue of the powers granted to it under the Malta Financial Services Authority Act and the Financial Institutions Act.
PUBLICATION
This notice is being published as part of the MFSA’s standard enforcement policy and in terms of Article 16(8) of the Malta Financial Services Authority Act.
UPDATED ON 04 FEBRUARY 2022
On 2 February 2022, the Authority was notified that an appeal dated 12 January 2022 was filed in relation to the MFSA’s decision to impose an administrative penalty of one hundred and forty-two thousand Euro (€142,000) and the below directives were appealed before the Financial Services Tribunal:
- Cease the prefunding of charge cards with immediate effect;
- Appoint an independent third-party firm to provide guidance.
UPDATED ON 20 JANUARY 2023
On 18 January 2023, Insignia Cards Limited have withdrawn the appeal before the Financial Services Tribunal in the names of Insignia Cards Limited vs Malta Financial Services Authority, bearing reference number FST 03/22.
Moreover, on 18 January 2023 the Authority has lifted, all the directives previously imposed on Insignia Cards Limited by means of the MFSA’s decision dated 16 December 2021 namely;
- Cease the prefunding of charge cards with immediate effect;
- Cease the processing of payments from Insignia Global Solutions Limited and Insignia Med Limited with immediate effect; and
- Appoint an independent third-party firm to provide guidance.
