The economic developments that characterised 2020 were highly susceptible to the unique global events which marked the year, namely, Brexit and the incidence of the pandemic, which affected all sectors of society – the financial services sector was no exception.
Despite the adverse circumstances generated by the COVID-19 pandemic, the Maltese financial services sector generated further growth in Gross Value Added (GVA) , as well as in employment within the industry.
The unprecedented enforcement and supervisory performance results achieved by the MFSA in 2020 gain even more significance against the backdrop of COVID-19 and the operational challenges it brought with it. Our work during 2020 remained steadily guided by the Strategic Plan 2019-2021, in line with the MFSA’s Vision to strengthen the Authority and prepare for the next generation of financial services.
GVA generated by Malta’s financial
Increase in the
25% of which were withdrawn/refused
An increase of 84%
in supervisory inspections
Total value of administrative penalties issued
Hours of training provided to MFSA staff
A number of developments and internal initiatives were undertaken during 2020 to continue strengthening the MFSA’s organisational capacity, governance, institutional architecture, and approach. The Authority’s activities in this regard follow, in part, the implementation of the MFSA’s Strategic Plan 2019-2021, as well as other priorities which required our attention during the course of the year.
One of the Authority’s mission critical and strategic priorities is to ensure that the highest standards of governance, risk management, culture and conduct are applied within the financial services market. All this contributes towards enhanced accountability, market trust and transparency. During 2020, the Authority continued providing for measures which are aimed at engaging with supervised firms to ensure effective governance structures, promoting the right culture and raising compliance standards in the financial services market. Highlights from our cross-sectoral priorities include:
- the provision of ongoing training to our supervisors, with an emphasis on AML-CFT training, also through the setting up of the Financial Supervisors Academy
- the adoption of a risk-based approach to strengthen MFSA’s supervisory effectiveness and due diligence process enhancements
- the publishing of Supervisory and Enforcement Effectiveness Dashboard which underscores the progress made in capacity building and resourcing, increase in training and educational activities, enforcement actions and supervisory inspections
- the unprecedented increase in supervisory inspections across the board and the focus on AML/CFT inspections
- an overview of the enforcement action taken in 2020.
Download the Annual Report to learn more about the key cross-sectoral 2020 areas of focus for our supervisory activity, regulatory and policy developments.
In the Annual Report 2020, the MFSA also outlines its priorities for the different sectors which it regulates, namely, Banking, Insurance and Pensions, Securities and Markets, Trustees and Company Service Providers, as well as the VFA sector. A number of initiatives taken by the MFSA with respect to each sector are highlighted, such as:
- the thematic review of AML and CFT Governance carried out across credit institutions and the supervisory deep dives conducted amongst financial institutions
- the supervisory flexibility measures taken in the face of the pandemic, the industry engagement efforts leading up to Brexit and the increased intensity and coverage of the Supervisory Inspection programme within the insurance sector
- the drafting of an Asset Management Strategy and a Capital Markets Strategy
- the implementation of the 5th Anti-Money Laundering Directive in relation to Trusts Beneficial Ownership Register and the publishing of the Amendment to the Company Service Providers Act which extends authorisation to previously exempt individuals and entities
- the amendments made to the VFA framework to adopt a more stringent approach than the 5th Anti-Money Laundering Directive.
Looking Forward to 2021
We will focus on bringing stability for the longer-term benefit of the financial services sector.
We will continue with the implementation of our strategic plan and setting the tone for the next strategic period.
We will be prioritising initiatives for the sustainable growth of the sector, also through the implementation of the Capital Markets strategy and the Asset Management strategy.