Issue link: https://maltatoday.uberflip.com/i/1265051
10 maltatoday | WEDNESDAY • 1 JULY 2020 OPINION MALTA is one of a handful of jurisdic- tions with a service sector dedicated to providing corporate services and trust services to both local and internation- al investors. This regime has attracted investment and business opportuni- ties to the island and contributed to its reputation as being 'open for business'. However, with globalisation and po- litical turmoil around the world, gov- ernments and authorities have become increasingly concerned at the risks that financial enablers can create. The MFSA has been working hard in close collaboration with the govern- ment and other Maltese authorities to deliver fundamental changes to rein- force its supervisory approach and the outcomes that it achieves. A corner- stone in the Authority's work is the re- form of the corporate service providers' sector in relation to both the standards that are applied to those already au- thorised and to bring the rest of the sector into the authorisation fold. The MFSA set out its thinking on this in its consultation paper Raising the Bar (https://www.mfsa.mt/wp-con- tent/uploads/2019/10/20191017_CSP- consultation_final-.pdf) and we, at the MFSA, are sensitive to the concerns of both those who are not already regulat- ed, as well as those professionals active in the sector. We have been in regular discussions with all interested parties and taken their feedback into consid- eration when developing the way for- ward. We believe that strengthening the compliance culture in this sector, through engagement in the context of the supervisory relationship, will de- liver real financial dividends for Mal- ta and its financial services sector in terms of improvements in the quality and profitability of the business and in opening up new international invest- ment opportunities. This CSP reform coincides with significant changes in the European market with the UK's de- parture from the EU, which will open up different opportunities for Malta. There is, they say, no pain without gain and all change is uncomfortable. The Malta financial services sector is innovative and adaptable. Of course, the expectation on firms will be in- creased and there will be costs in in- vesting in a more robust compliance framework. The MFSA will do all it can to listen to and support the sector, but, at the same time, if standards are com- promised, the reform will not deliver the benefits sought. Malta is already subject to interna- tional standards regarding the obliga- tions on its financial services sector in respect of reducing the risk of money laundering and the financing of terror- ism. This is not going to change and nor will the Authority's expectation of firms that they adopt good business practices, including in the manner in which records are kept. On the jour- ney to enhance Malta's reputation, there may be those for whom this ap- proach becomes too costly or difficult, but in the long term, the objective of high-quality standards across this sec- tor, must be the right road. The future of corporate service providers (CSPs) in Malta Emily Benson Emily Benson is Head of Conduct Supervision at the Malta Financial Services Authority We believe that strengthening the compliance culture in this sector, through engagement in the context of the supervisory relationship, will deliver real financial dividends for Malta and its financial services sector in terms of improvements in the quality and profitability of the business and in opening up new international investment opportunities