Credit Institutions Credit Institutions The supervisory objectives of the Authority in relation to credit institutions are primarily aimed at protecting depositors. FIND OUT MORE

Credit Institutions

Credit institutions are entities licensed to operate under the Banking Act, Chapter 371 of the Laws of Malta. According to the Banking Act, a credit institution can undertake a number of activities which are specified in the same Act. The taking of deposits from retail customers is the licensable activity that distinguishes a credit institution from other licensed entities.

The supervisory objectives of the Authority in relation to credit institutions are primarily aimed at protecting depositors. The Authority is committed to ensure that licensed credit institutions are compliant with the statutory requirements. To this end, the Authority uses a range of techniques and tools as it employs a mix of ongoing and onsite supervisory activities. The Authority looks at the business of credit institutions in terms of the risks faced by the institutions themselves and those that could arise from general instability in the financial market. When required the Authority introduces and implements qualitative and quantitative supervisory measures. The risk-based approach applied by the MFSA is consistent with international standards of supervision. The approach is intended to take into consideration capital, the nature of the business activities, internal controls and quality of management of licence holders.

The remit of the MFSA in the credit institution sector takes into account Council Regulation (EU) No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions. This Regulation led to the setting up of the Single Supervisory Mechanism (SSM) in 4 November 2014. In this sense, the MFSA’s regulatory activity includes the ongoing supervision of the three Significant Institutions (SIs) carried out by ECB/MFSA Joint Supervision Teams (JSTs).

The regulatory activities of the MFSA also include the ongoing supervision of Less Significant Institutions (LSIs), general On-Site responsibilities as well as supervisory reporting.

Conduct Banking

Conduct supervision of the banking sector regulates, oversees and sanctions the conduct of supervised institutions offering retail banking products and services, based on the existing legal requirements in Malta and also the impositions arising from the European Union’s Directives and Regulations and respective requirements. It aims to ensure:

  • compliance with integrity, suitability and competence criteria by the institutions supervised and their staff;
  • verification of the rules applying to the offering of banking products and services;
  • disclosure of clear, comprehensive and up-to-date information about the banking products and services offered, before and while the contracts are in force.

This supervision is carried out both through on-site and off-site inspections, which results and respective required action to be taken by credit institutions are after communicated to the latter. In those cases where thematic reviews take place, besides the communication to credit institutions in a one to one basis, the Authority also establishes best practices, through Circulars addressed to the respective institutions, and which the latter must follow in their interaction with their customers.

Credit Institutions

Credit Intermediaries

Credit Institutions

The Capital Requirements Regulation (‘CRR’) and the Capital Requirements Directive (‘CRDIV’) were initially published on 27 June 2013. Several amendments have been carried out during the years. The main amendments were affected by the CRRII and the CRDV on 7 June 2019 (‘New CRD Package’).

The New CRD Package sets out an enhanced legal framework for the prudential regulation and supervision of credit institutions as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures, powers and capital conservation measures, the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures and reporting and disclosure requirements.

Member States are required to adopt and publish the laws, regulations and administrative provisions necessary in order to comply with the CRDV. In this respect, the main national legislation, including the Banking Act (Chapter 371 of the Laws of Malta), is in the process of being amended to reflect changes arising from the transposition of CRDV. Furthermore, other subsidiary legislation and Banking Rules issued under the Banking Act will also be amended to reflect the new amendments.

Notwithstanding the above, credit institutions shall refer to the provisions in CRDV which shall apply until such time local legislation transposing the latter comes into force.

Subsidiary Legislation

S.L. 371.04 – Representative Offices (Requirements and Activities) Regulations

S.L. 371.05 – Administrative Penalties, Measures, and Investigatory Powers Regulations

L.N. 491 of 2021 – Administrative Penalties, Measures and Investigatory Powers (Amendment) Regulations, 2021

L.N. 38 of 2022 – Administrative Penalties, Measures and Investigatory Powers (Amendment) Regulations, 2021 (L.N. 491 of 2021) – Commencement Notice

S.L. 371.06 – Fees payable on the Filing of Judicial Acts in connection with Appeals Regulations

S.L. 371.07 – Declaration of Bank Holidays Order

L.N. 269 of 2023 – Declaration of Bank Holidays Order, 2023

S.L. 371.10 – Credit Institutions (Fees) Regulations

S.L. 371.11 – European Passport Rights for Credit Institutions Regulations

L.N. 492 of 2021 – European Passport Rights for Credit Institutions(Amendment) Regulations, 2021

L.N. 39 of 2022 – European Passport Rights for Credit Institutions (Amendment) Regulations, 2021 (L.N. 492 of 2021) – Commencement Notice

S.L. 371.12 – Credit Institutions (Reorganisation and Winding-up) Regulations

S.L. 371.14 – Banking Act (Access to Emissions Allowance Auction) Regulations

S.L. 371.15 – Supervisory Consolidation Regulations

L.N. 494 of 2021 – Supervisory Consolidation (Credit Institutions) Regulations, 2021

L.N. 36 of 2022 – Supervisory Consolidation (Credit Institutions) Regulations, 2021 (L.N. 494 of 2021) (S.L. 371.22) – Commencement Notice

L.N. 148 of 2023 – Supervisory Consolidation (Credit Institutions) (Amendment) Regulations, 2023

S.L. 371.16 – Banking Act (Supervisory Review) Regulations

L.N. 493 of 2021 – Banking Act (Supervisory Review)(Amendment) Regulations, 2021

L.N. 40 of 2022 – Banking Act (Supervisory Review) (Amendment) Regulations, 2021 (L.N. 493 of 2021) – Commencement Notice

S.L. 371.17 – CRR (Implementing and Transitional Provisions) Regulations

L.N. 132 of 2022 – CRR (Implementing and Transitional Provisions) (Amendment) Regulations, 2022

S.L. 371.18 – Credit Institutions and Financial Institutions (Payment Accounts) Regulations

L.N. 33 of 2024 – Credit Institutions and Financial Institutions (Payment Accounts) (Amendment) Regulations, 2024

S.L. 371.19 – Investment Services Act and Banking Act (MiFID and MiFIR Administrative Penalties, Measures and Investigatory Powers) Regulations

L.N. 135 of 2022 – Investment Services Act and Banking Act (MiFID and MiFIR Administrative Penalties, Measures and Investigatory Powers) (Amendment) Regulations, 2022

User Guidelines – L.N. 135 of 2022

S.L. 371.20 – Markets in Financial Instrument Regulations

S.L. 371.21 – Equity Release Financial Products Regulations

S.L. 376.06 – Equity Release Financial Products Regulations

In terms of Article 4(6) of the Banking Act (Chapter 371 of the Laws of Malta), the MFSA is empowered to issue, amend or revoke Banking Rules as may be required to carry into effect the provisions of the Banking Act and any regulations made thereunder. The MFSA may also publish Banking Rules to transpose, implement and give effect to the provisions and requirements of Directives, including primarily the CRD, Regulations and other legislative instruments of the European Union which require transposition or implementation.

Furthermore, the Banking Act provides the Authority with the power to issue, amend or revoke Banking Rules in order to implement any guidelines, recommendations, decisions, opinions or other instruments issued by European bodies such as the European Banking Authority (‘EBA’), the European Central Bank (‘ECB’), as may be required. The MFSA may also issue, amend or revoke Banking Rules to provide for any other relevant matter as may be specified in the Banking Act, or as it may deem necessary from time to time.

All Banking Rules issued by the MFSA are binding on licence holders and others as may specified therein, in accordance with Article 4(9) of the Banking Act.

Rules

BR/01/2023 – Application Procedures and Requirements for Authorisation of Licences for Banking Activities under the Banking Act 1994

 

  Explanatory Note

  Application Procedures and Requirements for Authorisation of Licences for Banking Activities under the Banking Act 1994

 

BR/02/2023 – Large Exposures for Credit Institutions Authorised under the Banking Act 1994

 

  Explanatory Note

  Large Exposures for Credit Institutions Authorised Under the Banking Act 1994

 

BR/03/2012 – Own Funds of Credit Institutions Authorised Under the Banking Act 1994

 

  Explanatory Note

 

BR/04/2013 – Capital Requirements Of Credit Institutions Authorised Under the Banking Act 1994

 

  Explanatory Note

 

BR/05/2007 – Liquidity Requirements of Credit Institutions Authorised Under the Banking Act 1994

 

  Liquidity Requirements of Credit Institutions authorised under the Banking Act 1994

  Annex 2 – Liquidity Maturity Ladder

  Annex 2 – Explanatory Notes

  Annex 3 & 4 – Liquidity Ratio – Deposit Liabilities

  Annex 5- Liquid-Asset Requirement

  Annex 5 – Explanatory Notes

  Annex 6 – Declaration Form to be used in filing Annexes 2 and 5 of the Rule

 

BR/06/2007 – Statutory Financial Information To be Submitted By Credit Institutions Authorised Under the Banking Act 1994

 

  Statutory Financial Information to be submitted by Credit Institutions Authorised Under the Banking Act 1994

  Instructions to the Schedule Appendices 1 – 11

  Statutory Returns

 

BR/07/2014 – Publication of Annual Report And Audited Financial Statements of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  Publication of Annual Report and Audited Report and Audited Financial Statements of Credit Institutions Authorised under the Banking Act 1994

  Appendix 1

  Appendix 2

  Appendix 3

 

BR/08/2012 – Capital Adequacy Of Credit Institutions Authorised Under the Banking Act 1994

 

  Explanatory Note

 

BR/09/2023 – Measures Addressing Non-Performing Exposures and Forborne Exposures

 

  Measures Addressing Non-Performing Exposures and Forborne Exposures

 

BR/10/2013 – Supervision On A Consolidated Basis of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note 

 

BR/11/2007 – Extension Of The Applicability Of The ‘Arm’s Length’ Principle By Credit Institutions Authorised Under The Banking Act 1994

 

  Extension of the Applicability of the ‘Arm’s Length’ Principle by Credit Institutions authorised under the Banking Act 1994

 

BR/12/2022 – The Supervisory Review Process Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  The Supervisory Review Process of Credit Institutions authorised under the Banking Act 1994

  List of Appendices & Annexes

  Appendix 1 – Principles on Internal Governance

  Appendix 2 – Internal Capital Adequacy Assessment Process (ICAAP) – General Framework

  Appendix 3 – The Authority’s Supervisory Review and Evaluation Process (SREP) – General Framework

  Appendix 4 – Obligations of the Authority as Consolidating Supervisor

  Appendix 5 – Market Transparency on Asset Encumbrance and Monitoring thereof

 

BR/13/2021 – Prudential Assessment Of Acquisitions And Increase Of Shareholdings In Credit Institutions Authorised Under The Banking Act 1994

 

  Prudential Assessment of Acquisitions and Increase of Shareholdings in Credit Institutions Authorised under the Banking Act 1994

 

BR/14/2022 – Outsourcing By Credit Institutions Authorised Under The Banking Act 1994

 

  Outsourcing by Credit Institutions Authorised under the Banking Act 1994

 

BR/15/2022 – Capital Buffers Of Credit Institutions Authorised Under The Banking Act 1994

 

  Capital Buffers of Credit Institutions Authorised Under the Banking Act 1994

 

BR/16/2020 – Funding Plans for Credit Institutions Authorised under the Banking Act (Cap. 371)

 

  Funding Plans for Credit Institutions Authorised under the Banking Act (Cap. 371)

  Annex 1 – Reporting Instructions

  Annex 2 – Reporting Templates

 

BR/17/2016 – ‘Management Expenses Contribution’ Under The Depositor Compensation Scheme Regulations (Sl.371.09)

 

  “Management Expenses Contribution” under the Depositor Compensation Scheme Regulations (Sl.371.09)

 

BR/18/2016 – ‘Risk-Based Method’  And The ‘Compensation Contribution Method’ Under The Depositor Compensation Scheme Regulations

 

  ‘Risk-Based Method’ and the ‘Compensation Contribution Method’ under the Depositor Compensation Scheme Regulations (S.L. 371.09)

 

BR/19/2019 – Banking Rule On ‘Payment Commitments’ Under The Depositor Compensation Scheme Regulations (S.L. 371.09)

 

Banking Rule On ‘Payment Commitments’ Under The Depositor Compensation Scheme Regulations (S.L. 371.09)

 

BR/20/2023 – Recovery Plans for Credit Institutions Authorised Under the Banking Act (CAP. 371)

 

Recovery Plans for Credit Institutions Authorised Under the Banking Act (CAP. 371)

 

BR/21/2022 – Remuneration Policies and Practices

 

Remuneration Policies and Practices

Annex 1 – Discount Rate for Variable Remuneration for Credit Institutions as mandated under Article 94(1)(g)(iii) of Directive 2013/36/EU

 

BR/22/2020 – Complaints-Handling Procedures for Credit Institutions Authorised under the Banking Act 1994

 

Complaints-Handling Procedures for Credit Institutions Authorised under the Banking Act 1994

 

BR/23/2023 – Reporting and Disclosure of Exposures subject to Measures applied in response to the COVID-19 Crisis

 

Explanatory Note

 

BR/24/2022 – Internal Governance of Credit Institutions Authorised Under The Banking Act

 

  Internal Governance of Credit Institutions Authorised Under The Banking Act

  Annex I – Product Oversight and Governance Arrangements for Retail Banking Products

 

BR/25/2022 – Financial Holdings Companies and Mixed Financial Holding Companies under the Banking Act 

 

  Financial Holdings Companies and Mixed Financial Holding Companies under the Banking Act

  Annex I – Application Forms

  Annex II – Declaration Form

 

BR/26/2022 – Stress Testing Requirements of Credit Institutions Licensed under the Banking Act

 

  Stress Testing Requirements of Credit Institutions Licensed under the Banking Act

 

BR/27/2022 – The Application of Certain Options and National Discretions

 

The Application of Certain Options and National Discretions

 

BR/28/2023 – Loan Origination and Monitoring by Credit Institutions licensed under the Banking Act

 

Loan Origination and Monitoring by Credit Institutions licensed under the Banking Act

 

BR/29/2023 – Management of Interest Rate Risk and Credit Spread Risk arising from Non-Trading Book Activities

 

Management of Interest Rate Risk and Credit Spread Risk arising from Non-Trading Book Activities

Annex I on Exposures Associated with High Risk

Annex II on the Treatment of Foreign Exchange

 

BR/30/2023 – Establishing an Intermediate EU Parent Undertaking

 

Establishing an Intermediate EU Parent Undertaking

Annex I – MFSA Template for IPU Threshold Monitoring

Rules applicable up to 31 December 2013

BR/02/2011 Large Exposures Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  Large Exposures of Credit Institutions

  Appendix 1 – Reporting Schedules

 

BR/03/2012 Own Funds Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  Own Funds of Credit Institutions

  Appendix 1 – Reporting Schedule

  Appendix 2 – Definition of Components Constituting Own Funds

 

BR/04/2013 Capital Requirements Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  Banking Rule 4 and Appendix 1

  Appendix 2 – Section I Credit Risk Standardised Approach

  Appendix 2 – Section II IRB Approach

  Appendix 2 – Section III CRM (Credit Risk Mitigation)

  Appendix 3 – Securitisation

  Appendix 4 – Operational Risk

  Appendix 5 – Returns

  Annex I – Definitions

  Annex II – Classification of Off-Balance Sheet items

  Annex III – Types of Derivatives

  Annex IV – Treatment of Interest and foreign exchange instruments

  Annex V – Transitional Provisions

 

BR/07/2013 Publication Of Annual Report And Audited Financial Statements Of Credit Institutions Authorised Under The Banking Act 1994.

 

  Explanatory Note

  Publication of Annual Report and Audited Financial Statements of Credit Institutions Authorised under the Banking Act 1994.

 

BR/08/2012 Capital Adequacy Of Credit Institutions Authorized Under The Banking Act 1994

 

  Explanatory Note

  Capital Adequacy of Credit Institutions Authorized Under the Banking Act 1994

  Appendix A – Calculation of Capital Requirements Ratio

  Appendix B – Definitions

  Appendix C – The Trading Book and Hedging Exposures

  Appendix D – Instruments which qualify for inclusion in the Trading Book

  Appendix E – Calculation of Consolidated Capital Requirements Ratio

  Appendix F – Business Activities subject to Capital Requirements

  Appendix G – Capital Adequacy Rule Summary Schedule

  Annex I – Calculating Capital Requirements for Foreign Exchange Risk

  Appendix I – A – Calculating the Net Open Position

  Appendix I – B – Calculation of the Capital Requirement for Foreign Exchange

  Appendix I – C(c-i) – Return of Long Currency Positions

  Appendix I – C(c-ii & iii) – Return of Long Currency Positions (Codes)

  Appendix I – C(c-iv) Return of Short Currency Positions

  Appendix I – C(c-v & vi) Return of Short Currency Positions (Codes)

  Appendix I – D – Simple Method for Options (Carve-out)

  Appendix I – E – Total Capital Requirements for Foreign Exchange Risk (Return)

  Annex II – Calculating Capital Requirements for Settlement and Counterparty Risk

  Appendix II – A – Recognised Clearing Houses and Exchanges

  Annex III – Calculating Capital Requirements for Position Risk

  Appendix III – A – Interest Rate Specific Risk (Return)

  Appendix III – B – Interest Rate General Risk Method 1 – Maturity Bands, Risk Weights (Return)

  Appendix III – C – Interest Rate General Risk Method 2 – Duration Bands, Risk Weights (Return)

  Appendix III – D – The Carve-Out Method for Options

  Appendix III – E – Relevant Credit Rating Agencies and Investment Grade Ratings

  Appendix III – F – Equity Position Risk (Return)

  Appendix III – G – Position Risk Summary (Return)

  Annex IV – Underwriting Risk

  Annex V – Calculating Capital Requirements for Commodities Risk

  Appendix V – A – Maturity Ladder Approach for Commodities Risk (Example)

  Annex VI – Calculating Capital Requirements for Large Exposures Risk

  Appendix VI – A – Calculation of Incremental Trading Book Capital Requirement (Example)

  Annex VII – Use of Internal Models to calculate Capital Requirements

 

BR/10/2013 Supervision On A Consolidated Basis Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  Supervision on a Consolidated Basis of Credit Institutions authorised under the Banking Act 1994

 

BR/12/2013 The Supervisory Review Process Of Credit Institutions Authorised Under The Banking Act 1994

 

  Explanatory Note

  The Supervisory Review Process Of Credit Institutions Authorised Under The Banking Act 1994

  List of Appendices & Annexes

  Appendix 1 Internal Governance

  Appendix 2 ICAAP

  Annex 2A – ICAAP Report – Recommended Structure

  Annex 2B – Technical Criteria on Organisation & Treatment of Risks

  Annex 2C – List of Definitions

  Annex 2D – Principles on Stress Testing

  Annex 2E – Principles for Remuneration Policies

  Annex 2F – Principles for the Management of IRRBB

  Annex 2G – Principles for the Mgmt of Concentration Risk

  Annex 2H – Principles on Risk Management

  Annex 2I – Principles for the Management of Operational Risk in Market-Related Activities

  Appendix 3 SREP

  Annex 3A – SREP-ICAAP interaction process

  Annex 3B – Technical Criteria on SREP

  Annex 3C – Prudential Measures

  Appendix 4 Obligations of the Authority as Consolidating Supervisor

Superseded Rules

BR/01/2020 Application Procedures And Requirements For Authorisation Of Licences For Banking Activities Under The Banking Act 1994

 

  Application Procedures and Requirements for Authorisation of Licences for Banking Activities under the Banking Act 1994

 

BR/01/2022 Application Procedures And Requirements For Authorisation Of Licences For Banking Activities Under The Banking Act 1994

 

  Application Procedures and Requirements for Authorisation of Licences for Banking Activities under the Banking Act 1994

 

BR/02/2011 Large Exposures for Credit Institutions Authorised Under the Banking Act 1994

 

  Explanatory Note

 

BR/09/2019 Measures Addressing Credit Risk Arising From the Assessment Of the Quality of Asset Portfolios Of Credit Institutions Authorised Under the Banking Act 1994. 

 

  Measures Addressing Credit Risks Arising from the Assessment of the Quality of Asset Portfolios of Credit Institutions Authorised under the Banking Act 1994

  Annex 1

  Annex 2

 

BR/12/2014 The Supervisory Review Process Of Credit Institutions Authorised Under The Banking Act 1994

 

  The Supervisory Review Process of Credit Institutions authorised under the Banking Act 1994

  Annex 2B – Technical Criteria on Organisation & Treatment of Risks

Annex 2D – Principles on Stress Testing

 

BR/14/2019 Outsourcing By Credit Institutions Authorised Under The Banking Act 1994

 

BR/14/2019 – Outsourcing by Credit Institutions Authorised under the Banking Act 1994

 

BR/14/2020 Outsourcing By Credit Institutions Authorised Under The Banking Act 1994

 

  Outsourcing by Credit Institutions Authorised under the Banking Act 1994

 

BR/15/2019 Capital Buffers Of Credit Institutions Authorised Under The Banking Act 1994

 

  Capital Buffers of Credit Institutions Authorised Under the Banking Act 1994

 

BR/15/2022 Capital Buffers Of Credit Institutions Authorised Under The Banking Act 1994

 

  Capital Buffers of Credit Institutions Authorised Under the Banking Act 1994

 

BR/16/2018 Funding Plans For Credit Institutions Authorised Under The Banking Act 1994

 

  Funding Plans for Credit Institutions authorised under the Banking Act 1994

  Annex 1 – Definitions – Key Features

  Annex 2 – Guidance Templates – FOR INFORMATION PURPOSES ONLY

  Annex 3 – REPORTING TEMPLATES

 

BR/20/2019 Recovery Plans for Credit Institutions Authorised Under the Banking Act (CAP. 371)

 

Recovery Plans for Credit Institutions Authorised Under the Banking Act (CAP. 371)

 

BR/21/2019 Remuneration Policies and Practices

 

Remuneration Policies and Practices

 

BR/21/2022 Remuneration Policies and Practices

 

Remuneration Policies and Practices

 

BR/23/2020 Reporting and Disclosure of Exposures subject to Measures applied in response to the COVID-19 Crisis

 

Reporting and Disclosure of Exposures subject to Measures applied in response to the COVID-19 Crisis

 

BR/24/2022 Internal Governance of Credit Institutions Authorised Under The Banking Act

 

  Internal Governance of Credit Institutions Authorised Under The Banking Act

Significant Credit Institutions

The purpose of supervisory disclosures is to enhance transparency of supervisory practices. Transparency is a key element in effective banking supervision, as emphasized by the Basel Committee on Banking Supervision in its Core Principles on Effective Banking Supervision. In terms of articles 143 and 144 of the Directive 2013/36/EU as amended by Directive 2019/878/EU (hereunder the ‘CRD’) and the Commission Implementing Regulation (EU) 2019/912 of 28 May 2019, amending Implementing Regulation (EU) No 650/2014 laying down implementing technical standards with regard to the format, structure, contents list and annual publication date of the information to be disclosed, National Competent Authorities (‘NCAs’) are required to disclose and provide a comprehensive overview of the supervisory and regulatory framework in their respective jurisdiction. The information disclosed aims at enabling a meaningful comparison of the approaches adopted by the NCAs of the different Member States. Comparison is further enhanced through a common set of templates (Annexes) provided by the European Banking Authority (‘EBA’).

  1. Rules and guidance: the texts of laws, regulations, administrative rules and general guidance adopted in Malta in the field of prudential regulation;
  2. Options and national discretions: the manner in which Malta Financial Services Authority (‘Authority’) exercises options and national discretions available in EU law;
  3. Supervisory review: the general criteria and methodologies used by the Authority in the Supervisory Review and Evaluation Process (SREP);
  4. Aggregate statistical data: key aspects of the implementation of the prudential framework in Malta (e.g. assets, capital requirements, Pillar I and Pillar II data, supervisory measures and administrative penalties).

The scope of the information published covers licence holders falling within the scope of the CRD and subject to the direct supervision of the Authority (i.e. LSI credit institutions and CRR investment firms). The below sections provide links to Authority’s supervisory disclosure requirements.

  • Rules and Guidance
  • Options and National Discretions
  • Supervisory Review
  • Aggregate Statistical Data

The supervisory disclosure information related to significant credit institutions (‘SI”s’) is published by the European Central Bank (‘ECB’) as the competent authority for the Single Supervisory Mechanism (‘SSM’) and can be accessed at: Banking Supervision

Rules and Guidance

In accordance with Article 143(1)(a) of the CRD IV, the Authority is required to publish information on legal and regulatory texts adopted in Malta in the field of prudential regulation, including:

  • Laws and regulations adopted by Malta to implement the provisions of CRD IV and CRR. These texts outline the primary supervisory requirements for supervised credit institutions and investment firms.
  • Administrative rules, i.e. instructions to supervised banks on how to comply with legislative and regulatory requirements.
  • General guidance, i.e. explicit disclosure requirements under CRD IV and explanations deemed necessary to set out how the rules should be applied by institutions, as well as any other relevant information to enhance the understanding of the capital adequacy framework.

The tables below are divided into eight parts, in accordance with Commission Implementing Regulation (EU) 2019/912 as follows:

  • Part 1            Transposition of Directive 2013/36/EU
  • Part 2            Model approval
  • Part 3            Specialised lending exposures
  • Part 4            Credit risk mitigation
  • Part 5            Specific disclosure requirements applied to institutions
  • Part 6            Waivers for the application of prudential requirements
  • Part 7            Qualifying holdings in a credit institution
  • Part 8            Regulatory and financial reporting

Annex I: Rules and Guidance

Options and National Discretions

CRR and CRD IV provide a number of options and national discretions which may be applied on the basis of national circumstances. The Authority, in such situations, is given a choice as to how (‘option’), or whether or not (‘national discretion’), to apply such options and discretions within the parameters of EU legislation.

In accordance with Article 143(1)(b) of the CRD IV and Commission Implementing Regulation (EU) 2019/912, the following tables are made up of three parts as follows:

  • Part 1   Overview of options and discretions set out in Directive 2013/36/EU, Regulation (EU) No. 575/2013 and LCR Delegated Regulation (EU) 2015/61
  • Part 2    Transitional options and discretions set out in Directive 2013/36/EU and Regulation (EU) No 5758/2013
  • Part 3    Variable elements of remuneration (Article 94 of Directive 2013/36 EU)

Annex II: Options and National Discretions

Supervisory Review

Pursuant to Article 143(1)(c) of Directive 2013/36/EU (‘CRD IV’), the Authority is required to publish information on the general criteria and methodologies used in the Supervisory Review and Evaluation Process (‘SREP’) referred to in Article 97 of the CRD IV.

Supervisory disclosures cover the following aspects of SREP:

  • Scope of application of the SREP (including proportionality)
  • Individual risk assessment
  • Review and evaluation of ICAAP & ILAAP
  • Overall SREP assessment and supervisory measures

Information disclosed can be found in the following tables:

Annex III: SREP

Aggregate Statistical Data

Article 143(1)(d) of the Directive 2013/36/EU (‘CRD IV’) requires competent authorities to disclose aggregate statistical data on key aspects of the implementation of the prudential framework in their respective jurisdiction. The information includes consolidated data on the financial sector, Pillar I (credit risk, market risk and operational risk), waivers as well as supervisory measures and administrative penalties.

The reference date for the data is 31 December of the preceding year.

The scope of the information published covers licence holders falling within the scope of the CRD and subject to the direct supervision of the Authority (i.e. LSI credit institutions and CRR investment firms).

The supervisory disclosure information related to significant credit institutions (‘SI”s’) is published by the ECB as the competent authority for the Single Supervisory Mechanism (‘SSM’) and can be accessed at: Banking Supervision.

The links to the other competent authorities’ websites pages on aggregate statistical data can be accessed from the Aggregate Statistical Data section on the EBA website.

Information disclosed can be found in the following table:

Annex IV: Aggregate Statistical Data

Credit institutions are required to report to the MFSA prudential information under the Common Reporting (COREP) framework and the Financial Reporting (FINREP) framework established under Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and the Implementing Technical Standard No 680/2014 on Supervisory Reporting, in accordance with Circulars on COREP and FINREP issued by the Authority from time to time and subject to terms and conditions as may be imposed by the Authority.

Reporting Modules

Unless stated otherwise in the respective instructions, all FINREP and COREP data should be submitted in actual figures including two decimal places (e.g. €2,560,561.43).

Data which is required as rates, percentages or ratios must be reported using the decimal notation, with a minimum precision equivalent to four decimals (e.g. 9.31% should be reported as 0.0931).

The templates provided below are to be used for submission of data to the Authority. Links to the EBA website are provided for information and reference purposes only.

ITS v3.3 for Credit Institutions

Credit institutions are required to submit COREP and FINREP data on both a solo and consolidated basis, where applicable.

 

1. COREP – Own Funds and Own Funds Requirements including IPL (module code: OF) – Updated on 03/08/2023

Applicable as from reference date June 2023

  EBA Link on Own Funds

  Legal Act amending ITS 680/2014 on Prudent Valuation

 

2. COREP – Leverage (module code: LR) – Updated on 20/10/2022

Applicable as from reference date December 2022

  EBA Link on Leverage

  Final draft ITS amending ITS on LR Reporting (EBA-ITS-2015-03)

 

3. COREP – Large Exposures and Concentration Risk (module code: LE) – Updated on 20/10/2022

Applicable as from reference date December 2022

  EBA Link on Large Exposures

 

4. COREP – Liquidity, LCR DA (module code: LCRDA) – Updated on 20/10/2022

Applicable as from reference date December 2022

  EBA Link on Liquidity

  Commission Delegated Regulation (EU) 2015/61

  EBA link on amended technical standards on reporting of the LCR

 

5. COREP – Liquidity, NSFR (module code: NSFR) – Updated on 07/02/2023

Applicable as from reference date December 2022

 EBA Link on Liquidity

 

6. COREP – Liquidity, ALMM (module code: AMM) – Updated on 14/07/2023

Applicable as from reference date June 2023

  EBA Link on Liquidity

 EBA link on amended technical standards on reporting of ALMM

 

7. FINREP – FINREP including NPL and Forbearance (module code: FINREP) – Updated on 20/10/2022

Applicable as from reference date December 2022

 EBA Link on Forbearance and NPEs

 

8. FINREP – Asset Encumbrance (module code: AE) – Updated on 23/06/2023

Applicable as from reference date June 2023

 EBA Link on Asset Encumbrance

 

9. Identification of G-SIIs (module code: G-SII) – Updated on 20/10/2022

Applicable as from reference date June 2023

 

10. Specific Reporting Requirements for Market Risk (module code: FRTB) – Updated on 20/10/2022 

Applicable as from reference date December 2022

 ITS Regulation on specific reporting requirements for market risk (EU) 2021/4533

 Corrigendum to Commission Implementing Regulation (EU) 2021/453

 

11. Funding Plans (module code: FP) – Updated on 20/10/2022

Applicable as from reference date December 2022

 EBA Link on Funding Plans

 MFSA Link to BR/16

 

12. Remuneration Benchmarking (module code: REM_BM) – Updated on 18/08/2023

Applicable as from 2022 FYE

EBA Guidelines on the Benchmarking Exercises on Remuneration Practices, the Gender Pay Gap and Approved Higher Ratios under CRD

 

13. Remuneration High Earners (module code: REM_HE) – Updated on 14/07/2023

Applicable as from 2022 FYE

EBA Guidelines on High Earner Data collection under CRD & IFD

 

14. Remuneration Benchmarking of Approved Higher Ratios (module code: REM_HRINSTITUTION ) – Updated on 06/02/2023

Applicable as from 2022 FYE

EBA Guidelines on the Benchmarking Exercises on Remuneration Practices, the Gender Pay Gap and Approved Higher Ratios under CRD

 

15. Remuneration Benchmarking of Gender Pay Gap (module code: REM_GAP) – Updated on 06/02/2023

Applicable as from 2023 FYE

EBA Guidelines on the Benchmarking Exercises on Remuneration Practices, the Gender Pay Gap and Approved Higher Ratios under CRD

 

16. Environmental, Social and Governance (module code: ESG) – Updated on 03/01/2024

Applicable as from reference date December 2023

Commission Implementing Regulation (EU) 2022/2453

EBA Decision EBA/DC/498

 

17. Interest Rate Risk in the Banking Book (module code: IRRBB) – Updated 0n 03/01/2024 

Applicable as from reference date December 2023

Amending Implementing Technical Standards on Supervisory Reporting with regard to IRRBB Reporting

EBA Decision EBA/DC/501

Submission of Reporting Templates

1. Remittance Timetable

Submission of data by credit institutions to the Authority shall be in line with the reporting dates available in the Remittance Timetable (updated on 03/01/2024).

 

2. LH Portal Submission

Submission of Supervisory Reporting Modules should be made through the below link:

https://lhportal.mfsa.mt/

Kindly refrain from using e-mail for the submission of such templates.

The below documents provide detailed guidelines on the submission of Supervisory Reporting data:

Queries

Institutions are highly encouraged to refer to the below dedicated EBA Q&A webpage for queries regarding interpretation of reporting requirements within the modules and interpretation of the respective instruction annexes.

  www.eba.europa.eu/single-rule-book-qa

This webpage provides replies to a number of queries already raised by various stakeholders, to which the EBA has issued its guidance and clarifications. Interested parties also have the opportunity to lodge their own queries on areas which have not yet been raised or discussed by other stakeholders.

COVID-19 Reporting (applicable till December 2022 reference date)

With reference to the MFSA Circular dated 19 January 2023, this reporting is discontinued as from 1 January 2023. The last reference date of this reporting is December 2022.

In the context of the COVID-19 crisis, regulators and supervisory authorities have the responsibility to ensure that information is available to monitor and assess the risks associated with banks’ activities. COVID-19 reporting requirements cover data that are crucial for understanding the soundness of all credit institutions. The MFSA is hereby providing detailed information on such reporting requirements.

 

1) Banking Rule 23 – Reporting and Disclosure of Exposures subject to Measures applied in response to the COVID-19 Crisis, setting out reporting requirements emanating from EBA Guidelines on COVID-19 measures reporting and disclosure

Required to be submitted by all credit institutions on an individual, sub-consolidated and consolidated basis, as applicable.

  • Frequency of reporting: Monthly reporting, unless otherwise informed by MFSA and/or ECB.
  • Format of submission: Excel (.xlsx) for reference dates until August 2020; both Excel (.xlsx) and XBRL format as from September 2020 reference date.

 

i) Significant Institutions

First reference and remittance dates: as per JST communication.

 

ii) Less Significant Institutions and Significant Subsidiaries

First reference date: 30 June 2020.

First remittance date: 11 August 2020.

 

Downloads

All credit institutions:

  • Download Reporting Templates applicable from December 2022 reference date hereUpdated 20/10/2022.
  • Download Reporting Templates applicable till August 2020 reference date hereUpdated 15/07/2020.
  • Download Reporting Templates applicable from September 2020 reference date hereUpdated 30/09/2020.
  • Download Instructions to Reporting Templates here (Annex 2 of BR/23).
  • Download MFSA Submission Guidelines hereUpdated 23/10/2020.

Significant Institutions: Download ECB COVID-19 reporting instructions here (as per JST communication) – Updated 25/02/2021.

Directives

Since 2007, the Authority has converted all Banking Directives into Banking Rules. Nevertheless Banking Directives BD/04 and BD/06 have been retained hereunder in their original format and content for reference purposes only. Similarly Banking Rule BR/03 has been revised during 2010 and the previous version is retained hereunder for reference purposes only.

 

BR/03/2008 Own Funds Of Credit Institutions Authorised Under The Banking Act 1994

  Own Funds of Credit Institutions

  Appendix 2

 

BD/04/2002 Solvency Ratio Of Credit Institutions Authorised Under The Banking Act 1994

  Solvency Ratio of Credit Institutions

  Capital Adequacy Summary Return

  Summary Schedule

  Own Funds – Appendix 2

  Other Capital and Non-Capital Liabilities

  Assets

  Off-Balance Sheet Items

  Int and For Exchange Rate Related Contracts

  Asset Items Collaterilised

 

BD/06/2005 Statutory Financial Information To Be Submitted By Credit Institutions Under The Banking Act 1994

Statutory Financial Information Directive

Instructions to the Schedules Appendices 1-11

Specimen Schedules Appendix 12

Credit Intermediaries

In this section one will find the main legislation laying down the framework of the regulatory regime applicable to credit intermediaries. These provide for the regulatory structure for the supervision of the MFSA, together with the MCCAA, of these entities and include, amongst others, the powers of the MFSA to grant, restrict or withdraw admissions issued to credit intermediaries. The main legislation also provides for the power of the MFSA and the MCCAA to impose administrative penalties on these entities in specific circumstances. The main legislation also contains an enabling clause for the MFSA to issue Credit Intermediaries’ Rules to further supplement the provisions in the law.