BusinessToday Previous Editions

10.09.2020 NEWS MFSA takes measures to increase efficiency and effectiveness ahead of MONEYVAL report DR Christopher P. Buttigieg, the Mal- ta Financial Services Authority's Chief Officer for Supervision, has insisted that Malta is ready to face the MON- EYVAL test where financial supervi- sion is concerned. Participating in a webinar on MON- EYVAL that was organised by the Malta Business Network last week, Buttigieg said that the Authority was continually taking measures to in- crease the level of efficiency and ef- fectiveness of its operations. "We've learned from the experience of a number of past cases, and we've taken action to enhance our policies, procedures, and also our institutional framework to make the MFSA strong- er and more efficient", he said. Buttigieg noted that the Authority has invested heavily in capacity build- ing and recruitment over the past couple of years to further bolster the teams tasked with supervising Malta's financial sector. The MFSA's headcount is expected to reach 450 by the end of the year, marking an increase of over 150 new employees since 2018. The Authority has implemented a detailed development programme aimed at upskilling its employees through specialist training to ensure that all employees have the required level of knowledge and skills. This investment has resulted in on- going training sessions, with both lo- cal and foreign experts being brought in to help train employees, as well as the establishment of a specialised fi- nancial supervisors academy which includes a focus on AML/CFT train- ing. Moreover, new functions within the Authority have also been set up to provide more focus on certain aspects of its supervisory role. One such function is the Financial Crime Compliance team, which has 18 supervisors going up to 20 by the end of 2020. This function is respon- sible for carrying out inspections in tandem with the FIAU, which focus on AML/CFT processes. AML/CFT has now also been in- cluded in all of the MFSA's prudential assessments, in order to increase the degree of attention given to this su- pervisory element. Additionally, the number of inspec- tions carried out by the Authority have been increased substantially even in the face of the COVID-19 pandemic, with 350 inspections planned in 2020, a marked increase when one compares to the 168 that took place in 2018. Buttigieg also drew attention to the work that the MFSA has been doing on the due diligence front, with the aim of continuing to strengthen its effective- ness as Malta's financial watchdog. "We've established a due diligence function which not only carries out due diligence at the authorisation stage but also throughout the lifecycle of a licence holder/individual", he said, adding that this function operates within the structure of a new Enforce- ment Directorate that is strengthen- ing the Authority's enforcement arm. Buttigieg said that the MFSA is tak- ing a risk-based approach to its op- erations and supervisory activities, arguing that this is a crucial strategy that enables the regulator to better al- locate its resources, supervisory pro- grammes and procedures based on the unique risk profile of each firm. "We're refining our risk-based ap- proach metrics to ensure that we have a horizontal approach to every firm and that by the end of the year we'll have one system which classifies every licensed entity into high, medium, or low risk. This should guide our level of supervisory engagement with the industry even further", he said. Buttigieg said that the MFSA's pro- gramme for reform forms part of the MFSA's 3-year strategy, published in January 2019 and goes beyond MON- EYVAL's recommendations. "We're not just doing this for MON- EYVAL", he said. "This is all part of the MFSA's long-term plan to strengthen Malta's position as a financial services jurisdiction of choice for good busi- ness and serious players". e MFSA's Chief Officer Supervi- sion called for a comprehensive, clear jurisdictional strategy that looks be- yond the MONEYVAL and COVID-19 scenarios and sets out a path for future sustainable growth of Malta's financial services sector. He insisted that sec- tors with the most potential for growth (such as asset management, FinTech and insurance for example) should be identified and targeted, with frame- works being put into place to strength- en the ecosystem around them and mitigate any potential risks. He said that such a strategy needs to be developed with all relevant stake- holders linked to Malta's financial sector. Having everyone on board will be crucial to ensure successful imple- mentation and sustainable growth in the future. The Authority has invested heavily in capacity building and recruitment over the past couple of years to further bolster the teams tasked with supervising Malta's financial sector

• Cover