The main changes that were undertaken from a legislative and regulatory perspective in relation to credit institutions include the following:

New Legislation

• Regulation on Markets in Crypto Assets (MiCA)

The MiCA Regulation was published in the EU Official Journal on 9 June 2023, and is applicable from 30 June 2024 except for the requirements relating to the issuance of asset-referenced tokens and e-money tokens, commonly referred to as ‘stablecoins’, which are applicable from 30 June 2024.

The European Banking Authority (“EBA”) is currently in the process of drafting several Regulatory Technical Standards (RTS) and Guidelines, as emanating from the mandates imposed on the EBA within the Regulation. In this regard, it is recommended that, credit institutions that are planning to issue stablecoins and/or provide crypto-asset services in the future should be on the lookout for the public consultations that shall be carried out by the EBA in the coming months.

New Banking Rules

The Banking Rule BR/28 on Loan Origination and Monitoring by Credit Institutions  was published to implement the EBA Guidelines on loan origination and monitoring.

The Banking Rule BR/29 on the Management of Interest Rate Risk and Credit Spread Risk Arising from Non-Trading Book Activities was published to implement the EBA Guidelines issued on the basis of Article 84(6) of Directive 2013/36/EU (the ‘CRD’) specifying criteria for the identification, evaluation, management and mitigation of the risks arising from potential changes in interest rates and of the assessment and monitoring of credit spread risk, of institutions’ non-trading book activities. Furthermore, two Annexes were issued under this Rule; Annex I on Exposures Associated with High Risk was published to implement the EBA Guidelines on specification of types of exposures to be associated with high risk under Article 128(3) of Regulation (EU) No 575/2013 (the ‘CRR’) and Annex II on the Treatment of Foreign Exchange was published to implement the EBA Guidelines on the treatment of structural FX under Article 352(2) of the ‘CRR’.

The Banking Rule BR/30 on Establishing an Intermediate EU Parent Undertaking has been published to implement the EBA Guidelines on the monitoring of the threshold and other procedural aspects on the establishment of an intermediate EU parent undertaking (‘IPU’) under Article 11C of the Banking Act. The template that needs to be submitted by the in-scope institutions as specified within the Rule has been included as Annex I to the Rule.

Check out this MFSA webpage for a list of all the new Banking Rules published by Banking Supervision.

Circulars issued and published by the MFSA

Check out this MFSA webpage for a list of circulars published by Banking Supervision.