In 2013 Malta and the United States entered into an intergovernmental agreement to implement rules and regulations under the Foreign Account Tax Compliance Act (FATCA). Under this agreement, Maltese and US financial institutions must comply with certain due diligence, reporting and withholding requirements under FATCA. Financial institutions that fail to comply with these obligations will not only face penalties, but may also be penalised for violating domestic laws.
The Financial Services Authority recently announced a review of certain criteria regarding the licensing of credit institutions and insurance companies. The rationale for these changes was the recent global financial crisis, which resulted in increasing demands on regulatory authorities to maintain financial stability, and the widening of the grounds for recourse under the bank depositor compensation scheme.
The recent financial crisis has accentuated the importance and relevance of sound and robust internal governance systems for credit institutions. The general framework of internal governance applicable to credit institutions licensed in Malta must therefore be considered, with companies ensuring that their internal governance systems are subject to the necessary scrutiny.
The Malta Financial Services Authority (MFSA) recently published a consultation document proposing amendments to the Financial Institutions Act and a new financial institutions rule, setting out the changes to the Maltese regulatory framework. The MFSA plans to regulate electronic money institutions under the lighter and more flexible regime of the Financial Institutions Act as compared to the Banking Act.
The Malta Financial Services Authority recently published the results of the 2010 independent assessment of its regulatory activities, including banking. The assessment also considered the authority's compliance with the Basel Core Principles for Effective Supervision. This update summarises the main findings.
The Central Bank of Malta and the Malta Financial Services Authority recently published the results of the stress-testing exercise performed on Bank of Valletta plc. This extensive exercise, coordinated by the Committee of European Banking Supervisors, aimed to gather information and assess the resilience of the EU banking system to possible adverse economic development.
The Malta Financial Services Authority has signed a memorandum of understanding with the China Banking Regulatory Commission. The memorandum will enhance cooperation in the sharing of information and the area of banking supervision. Two new banking rules were also recently enacted: one on the prudential assessment of acquisitions and increases in shareholdings, and one on outsourcing.
The Malta Financial Services Authority recently published its proposals to modernize Banking Rule BR/07. The new rule aims to achieve the policy objective set out in the European Commission’s Financial Services Action Plan of enhancing disclosure of credit institutions’ activities to allow investors to take informed decisions, and to foster market transparency and discipline as a complement to prudential supervision.