Malta Financial Services Authority. Malta as a finance centre: A Model Of Stability in a Changing Landscape

Transcription

1 Malta Financial Services Authority Malta as a finance centre: A Model Of Stability in a Changing Landscape

2 MALTA Framework for the Development of Financial Services

3 Financial Services Legislation Financial Services Legislation Primary Legislation Banking Act Financial Institutions Act Insurance Business Act Insurance Intermediaries Act Investment Services Act Special Funds Act [Retirement Pensions Act] Trustees and Trusts Act Malta Financial Services Authority Act Central Bank of Malta Act

4 Financial Services Legislation Supporting Legislation:- Companies (includes Limited Partnerships) Act Netting upon Insolvency Act Securitisation Act Prevention of Financial Market Abuse Act Professional Secrecy Act Prevention of Money Laundering Act

5 Regulation Malta Financial Services Authority (MFSA) Single regulator for financial services Regulates banking, financial institutions, insurance companies, investment services companies, securities, stock exchanges and listing, trust management companies, pension schemes Autonomous public institution, selffunded Avoidance of Prescriptive Regulation to allow promoters the flexibility to operate

6 Main Objectives of the MFSA to regulate, monitor and supervise financial services in Malta; to promote the general interests and legitimate expectations of consumers of financial services, and to promote fair competition practices and consumer choice; to advise the Government generally on the formulation of policies in the field of financial services, and to make recommendations to Government as to any action which in the opinion of the Authority, it would be expedient to take in relation to matters in respect of which the Authority has such duties;

7 MFSA - Structure MFSA Legal & Int Affairs Unit Board of Governors Chairman Board Secretary Co-ordination Committee Supervisory Council Director General Company Registry Registrar of Companies Board of Management and Resources Chief Operations Officer

8 Functions Board of Governors Board of Governors is composed of seven members including the Chairman. Chairman and Governors appointed for a period of up to five years and their appointment may be renewed for further periods of five years; Board of Governors sets policy; The Legal and International Affairs Unit acts as Secretary to the Board of Governors and the Co- Ordination Committee.

9 Composition of the Supervisory Council Director General Supervisory Council Director Banking Supervision Director Insurance & Pensions Supervision Director Securities & Markets Supervision Director Regulatory Development Director Authorisation

10 Remit of the Supervisory Council Art 10. (1) of the MFSA Act states:- The Supervisory Council shall be responsible for the approval of and for the issuing of licences and other authorisations, for the processing of applications for such licences and authorisations, and for the monitoring and supervision of persons and other entities licensed or authorised by the Authority in the financial services sector.

11 Board of Management & Resources MFSA Act Art 11 states...responsible for carrying out the day-to-day management and finances of the Authority, including business development and ancillary services and for the general co-ordination of the Authority s administrative affairs and shall be composed of the persons responsible for such activities as may be designated by the Board of Governors BOARD OF MANAGEMENT & RESOURCES Chief Operations Officer Finance & Administration Unit Human Resource & Training Unit Information Systems Unit Communications Unit

12 Remit - Board of Management & Resources Finance & Admin Finance Accounting records, internal control, budgets Administration - premises, transport, security, cleaning Procurement, Operational risk management HRD & Training Internal personnel training Industry training programmes HR functions recruitment, personnel records, staff appraisals Information Systems Systems development, outsource system applications, data security & integrity Implement new systems & infrastructure, security, support, maintenance System back-up and business continuity Communic - ations Information & Public Relations media, enquiries, website, intranet Events conferences, seminars, training logistics, conference facilities

13 Co-Ordination Committee Co-ordinates the application of policies approved by the Board of Governors. Serves as a channel of communication between the Board of Governors and the other organs of the Authority Chairman - Board of Governors Secretary - Board of Governors / Director Legal & Int. Unit Director General Supervisory Council Registrar of Companies Chief Operations Officer Chief Operations Board of Officer - Board of Management & Development and Resources Resources

14 Membership of International Organisations New EU Supervisory Architecture:- European Securities & Markets Authority (ESMA) European Banking Authority (EBA) European Insurance and Occupational Pensions Authority (EIOPA) International Association of Insurance Supervisors (IAIS) International Organization of Securities Commissions (IOSCO) International Organisation of Pensions Supervisors (IOPS)

15 Memoranda of Understanding currently in force Bilateral MoU s and Agreements with Foreign Regulators 24 MoU s in 22 countries & 2 Letter Agreements Covering Banking, Insurance, Securities, Trusts, Pension funds, exchange of information, etc Bilateral MoU s Local Authorities Office of Fair Competition exchange of information & assistance CBM exchange of information and payment and securities settlement systems Multilateral MoU s & Protocols MOF/CBM co-operation in financial crisis FSA/EU Central Banks & Fin.Min. fin. stability CEIOPS Insurance and Occupational Pensions CESR & IOSCO Securities IAIS - Insurance

16 MFSA Human Resources

17 Number of Employees 250 Full Time Part Time

18 Males and Females 140 Male Female Males 44% Females 56%

19 Employee Age Bracket Average Age: 35 years

20 Qualified Personnel nd Degree 1st Degree Diploma

21 International Evaluation FATF Financial Action Task Force (1999) OECD Organisation for Economic Co-operation and Development (2000) Council of Europe Money Laundering Committee (2001) EU Peer Review (2002) International Monetary Fund full FSAP (2003)

22 International Evaluation Malta embraces international tax standards for transparency and exchange of information and has joined OECD member countries in committing to eliminate harmful tax practices. (OECD Official News Release, June 2000) a comprehensive and robust legal framework and a particularly well-regulated financial sector (Report of the Council of Europe Money-laundering Committee, April 2003)

23 International Evaluation The World Economic Forum Report on Competitiveness ( ) Report places: 1. Malta in the 11 th position in financial market development. Key performance indicators for the financial services sector also confirm the sector s standing as a leading innovator in the Maltese economy. 2. Soundness of Maltese banks has been ranked in 10 th position. 3. Malta is in the 12 th position in the assessment carried out on the regulation of securities exchanges th position on the strength of auditing and reporting standards.

24 International Evaluation Malta s financial system appears to be healthy and well supervised. Malta has a comprehensive legal framework and strongly adheres to most of the international standards and codes. The authorities have undertaken major efforts in strengthening the supervisory framework (International Monetary Fund, Financial System Stability Assessment (FSSA), September 2003)

25 Independent Assessment based on: Basel Core Principles (BCP) International Organisation of Securities Commission (IOSCO) International Association of Insurance Supervisors (IAIS)

26 Assessors:- Piero Ugolini (former Assistant Director IMF and mission Chief of the IMF/World Bank team that conducted the 2002/3 FSAP exercise) Richard Nun (former Deputy Director Texas Banking/Finance Commission, Austin-Texas; and currently peripatetic expert in banking Supervision IMF and Centennial Group Washington D.C., USA Michael Kehr, Senior Advisor International Policy/Affairs, Bafin, Bundesanstalt fur, Finanzdienstleistungsaufsicht, Federal Financial Supervisory Authority, Germany

27 2002/3 FSAP Overall Outcome Malta s financial sector is sound and well supervised but very concentrated Very concentrated sector and strong reliance on real estate properties collateral Insurance and Securities : not systemically important Insurance companies are healthy

28 The 2010 Assessment: BCP-IAIS-IOSCO What s new? World wide dissemination of international standards and best practices Entry into EU 2004 Concentration of Supervision in MFSA Expansion of financial sector and reputational risk/benefit

29 2010 Overall Outcome Positive : progress noted in all assessments Banking sector : the most clear progress Insurances : recent extensive changes in the Principles do not allow a proper comparison with 2003 Securities : progress from an already relatively 2002/3 positive assessment

30 BCP Comparison 2002/3 Assessment 2010 Assessment Compliant : 11 Largely Compliant: 12 Materially NC: 1 Compliant :21 Largely Compliant: 5 Materially NC : 0

31 Insurance - IAIS October 2000 methodology : 17 Principles October 2003 methodology : 28 Principles

32 IAIS Principles - Broad Comparison 2002/ / ICP ICP Observed: 12 Broadly observed: 3 Materially non observed: 2 Observed : 22 Largely observed: 4 Partly observed : 2 Non observed : 0 32

33 IOSCO 2002/ Principles 2002/3 Implemented : 22 Broadly implemented:0 Partly implemented: 6 Nonimplemented: 0 Not applicable: Implemented: 24 Broadly implemented: 4 Partly implemented: 0 Non implemented: 0 Not applicable: 2

34 Conclusions Overall progress and strong framework -- Entry in EU -- Implement international standards and best practices -- Reorganization at the MFSA -- Good communication and transparency

35 MALTA Critical Success Factors

36 Legislation Flexible & versatile legal framework Civil Law jurisdiction Business legislation based on English law principles Old, established juridical system Laws and Regulations published in English and Maltese

37 Financial Reporting IFRS International Financial Reporting Standards since 1997 Accounting records and bank accounts in foreign currencies PWC, Deloitte, Ernst & Young, KPMG, Grant Thornton, PKF, BDO, Mazars etc

38 Human Resources Multilingual community English is the working language. Wellspoken Italian, French, Spanish, German; Free market for labour; Availability of multilingual graduates in disciplines related to financial services as also administrative and clerical staff; High levels of productivity.

39 Cost Structure - Average Salaries General Manager Senior IT Manager Finance and admin manager Network Admin/Programmer Senior/executive staff Euro74,000 Euro45,000 Euro26,000 Euro24,000 Euro19,000 Office clerk/secretary Receptionist Source: Malta Financial Services Authority Euro14,000 Euro12,000

40 Cost structures - Office Rent Dublin 524 London 984 Paris 924 Frankfurt 555 Malta 135 (Euros per sq.m. per annum) Source: CB Richard Ellis Global Market Rents (Nov 2010) and MFSA Data

41 Taxation Modern and competitive tax regime Tax-efficient base for outsourcing activities Tax system based on the full imputation system: 35% tax on company profits shareholders receive full credit for any tax paid by the company from which a dividend is received Double tax treaties with 56 countries

42 The Opportunities Funds Services Managed insurance and Re- Insurance Companies Management of Trusts Management of Pension Schemes Financial Institutions Banking Services

43 COMPETITIVE HIGH QUALITY SKILLS STEADFAST REGULATION AGILITY IN THE MARKET MALTA - the culture of getting things done

44 Thank. you!