Malta Financial Services Authority

The Malta Financial Services Authority (MFSA) is a financial regulator of Malta. The MFSA was founded in 2002 when it assumed the responsibilities of the Central Bank of Malta, the Malta Stock Exchange, and the Malta Financial Services Centre.[1] It regulates banking, investment, insurance, financial, pension companies and securities markets in Malta.[5]

Malta Financial Services Authority
Awtoritàgħas-Servizzi Finanzjarji ta’ Malta
Agency overview
Formed23 July 2002
Preceding agency
  • Malta Financial Services Centre[1]
JurisdictionMalta
HeadquartersTriq l-Imdina, Zone 1
Central Business District,
Birkirkara
Employees307[2]
Annual budget€26m (yearly average)[3]
Agency executives
  • John Mamo[4], Chairman
  • Vacant, Chief Executive
Key document
Websitewww.mfsa.mt

Powers

The MFSA has the powers to regulate, monitor, and supervise the financial sector of Malta, protecting the interests of the consumers and promoting the market transparency and efficiency. It has the powers to review business practices, advise the government on policies, and to investigate potential harmful and unfair practices in the financial industry.[6]

International relations

The MFSA is a member of the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Securities and Markets Authority,[6] the International Organization of Securities Commissions,[7] and the International Association of Insurance Supervisors.[8]

Demerger

The MFSA was demerged from the Registry of Companies in 2018 in order to focus on its regulatory role and duties.[9][10] The Registry of Companies is now a stand-alone agency and is now known as the Malta Business Registry (MBR).[11][12]

Notable cases and controversies

In June 2016, the MFSA drew criticism from the MEP Sven Giegold for poor regulatory supervision of the Maltese financial institutions.[13]

In March 2018, the MFSA took control of Pilatus Bank, a Maltese bank headed by Ali Sadr Hasheminejad, whose money laundering scheme of sanctioned Iranian money was exposed by late Daphne Caruana Galizia.[14] Later, in June, the MFSA asked the European Central Bank to withdraw Pilatus Bank's licence.[15] In July of the same year, Pilatus Bank's depositors threatened to sue the MFSA for freezing €80 million in funds held by "innocent victims."[16] In October, the bank's directors followed with their own lawsuit to the MFSA.[17] Finally, in November 2018, the bank's European licence has been withdrawn by the ECB.[18]

In October 2018, the MFSA froze the assets of SataBank due to anti-money laundering concerns. The freeze resulted in vocal criticism of the bank's account holders. The bank is co-owned by Christo Georgiev, the owner of LeoPay startup.[19][20]

In August 2019, the Malta Financial Services Authority became embroiled in scandal after paying €150,000 severance to its human resources department director, George Spiteri, who later was rehired for a similar position by the Malta Business Registry, which branched out of the MFSA just a few weeks earlier.[21]

References
  1. "Financial Services Centre to become sole regulator of the financial sector". Times of Malta. 2002-06-04. Retrieved 2019-09-15.
  2. "MFSA Annual Report 2018" (PDF). MFSA. 2019-07-12. Retrieved 2019-09-15.
  3. Sansone, Kurt (2019-02-06). "Financial services regulator wants Malta to play in the 'Champions League'". Malta Today. Retrieved 2019-09-15.
  4. "John Mamo". MFSA. Retrieved 2019-09-15.
  5. "About us". MFSA. Retrieved 2019-09-15.
  6. "MFSA Vision 2021" (PDF). MFSA. Retrieved 2019-09-15.
  7. "Ordinary Members of IOSCO". IOSCO. Retrieved 2019-09-15.
  8. "IAIS Organisation members". IAIS. Retrieved 2019-09-15.
  9. "The MFSA publishes its 2018 Annual Report & Financial Statements: A challenging year marked by change and a 9.5% growth in the Maltese financial services sector". MFSA. Retrieved 2020-07-13.
  10. "Financial watchdog made €7m loss in 2018". Times of Malta. Retrieved 2020-07-13.
  11. "About MBR". Malta Business Registry. 2019-06-09. Retrieved 2020-07-13.
  12. "Registry of Companies to be first agency in the world run by a Blockchain-based system - The Malta Independent". www.independent.com.mt. Retrieved 2020-07-13.
  13. Scott, Matt (2016-06-20). "Controversy follows MFSA after it comes under fire for poor regulatory oversight". maltawinds.com. Retrieved 2019-09-16.
  14. Kirchgaessner, Stephanie; Garside, Juliette (2018-03-22). "Authorities seize control of bank at center of Malta corruption scandal". The Guardian. ISSN 0261-3077. Retrieved 2019-09-16.
  15. "Malta asks ECB to withdraw license of scandal-hit Pilatus Bank". Reuters. 2018-06-30. Retrieved 2019-09-16.
  16. Martin, Ivan (2018-07-22). "Pilatus depositors threaten to sue MFSA over €80m". Times of Malta. Retrieved 2019-09-16.
  17. Martin, Ivan (2018-10-07). "Pilatus Bank's directors sue MFSA". Times of Malta. Retrieved 2019-09-16.
  18. Osborne, Hilary (2018-11-05). "Malta's Pilatus Bank has European licence withdrawn". The Guardian. ISSN 0261-3077. Retrieved 2019-09-16.
  19. Megaw, Nicholas; Crow, David (2018-10-25). "Customers' money trapped at UK fintech due to Malta bank freeze". Financial Times. Retrieved 2019-09-16.
  20. Diacono, Tim (2018-10-26). "MFSA Keeps Satabank Clients In The Dark About Their Frozen Deposits". lovinmalta.com. Retrieved 2019-09-16.
  21. Camilleri, Ivan (2019-08-25). "MFSA official paid thousands to leave… re-employed weeks later". Times of Malta. Retrieved 2019-09-16.
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