Malta Financial Services Authority

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Malta Financial Services Authority
Awtorità għas-Servizzi Finanzjarji ta’ Malta
MFSA Logo.png
Malta MFSA.jpg
Agency overview
Formed23 July 2002
Preceding agency
  • Malta Financial Services Centre [1]
Jurisdiction Malta
HeadquartersTriq l-Imdina, Zone 1
Central Business District,
Birkirkara
Employees307 [2]
Annual budget€26m (yearly average) [3]
Agency executives
  • Jesmond Gatt, Chairman
  • Kenneth Farrugia, Chief Executive Officer
Key document
Website www.mfsa.mt

The Malta Financial Services Authority (MFSA) is the main financial regulatory authority of Malta, based in Birkirkara. It supervises banking, investment, insurance, financial, pension companies and securities markets in Malta, [4] and monitors financial crime in liaison with the Financial Intelligence Analysis Unit. Since 2014, it has been Malta's national competent authority within European Banking Supervision, [5] and since 2015, the national resolution authority within the Single Resolution Mechanism.

Contents

The MFSA was established in 2002, succeeding the Malta International Business Authority (MIBA, 1988-1994) and the Malta Financial Services Centre (MFSC, 1994-2002) and also taking over prudential and market supervisory duties previously under the Central Bank of Malta.

History

Background

A formal framework of financial regulation developed gradually in Malta following the country's independence in 1964. The Central Bank of Malta (CBM) was created in 1968 out of the prior Board of Commissioners of Currency. In 1970, the CBM was empowered with supervision of the banking sector. [6]

In its early years as an independent republic under long-serving prime minister Dom Mintoff, Malta's economic policy was oriented towards domestic manufacturing-led development supported by heavy-handed state intervention. Following the electoral victory of the Nationalist Party in 1987, Malta started pivoting towards a new model as an offshore financial centre and enacted the Malta International Business Activities Act in 1988 to that effect. [7] :144 Meanwhile, legislation in 1990 granted the CBM supervisory authority over the Malta Stock Exchange. [6]

Malta International Business Authority

The MIBA was established in early 1989 as the International Business Activities Act entered into force. It functioned as a company register for offshore businesses, which at the outset were clearly separated from domestic ones in terms of applicable regulations. [7] :145

Malta Financial Services Centre

In 1994, the Nationalist government adopted a new orientation that partly reversed its prior development of Malta as an offshore financial center, not least as it increasingly favored future membership of the European Union. In that phase, the distinction between offshore and domestic businesses was eroded. The MIBA was correspondingly reorganized as a general-purpose financial supervisory authority and renamed as the MFSC. In 1995, it moved into its current building in the Mrieħel business district of Birkirkara. [8]

Malta Financial Services Authority

Upon establishment in 2002, the MFSA took up the operations of the prior MFSC and also the supervisory duties of the CBM. [6]

The Registry of Companies, representing the core of the original activity of MIBA in 1988, was demerged from the MFSA in 2018, so that the latter would focus on its regulatory duties. [9] [10] The Registry of Companies thus became a stand-alone agency and was renamed the Malta Business Registry (MBR). [11] [12]

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. [13]

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, [13] the International Organization of Securities Commissions, [14] and the International Association of Insurance Supervisors. [15]

Controversy

In June 2016, the MFSA drew criticism from the MEP Sven Giegold for poor regulatory supervision of the Maltese financial institutions. [16]

In 2018, Joseph Cuschieri was appointed as CEO of the Malta Financial Services Authority. He started his position accompanied by his close friend Edwina Licari, and during their time at the MFSA, they had more than 35 “business trips” together, where €0.5 million from taxpayers’ money were spent. [17] [18] [19] In 2020, Joseph Cuschieri decided to resign from the role due to the revelations of his closeness with Yorgen Fenech, the main suspect behind the assassination of journalist and anti-corruption activist Daphne Caruana. Edwina Licari still works at MFSA as a General Counsel with a high annual salary of €100,000. [20]

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. [21] Later, in June, the MFSA asked the European Central Bank to withdraw Pilatus Bank's licence. [22] 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. [23] In October, the bank's directors followed with their own lawsuit to the MFSA. [24] In November 2018, the bank's European licence has been withdrawn by the ECB. [25]

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. [26] [27]

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 had branched out of the MFSA just a few weeks earlier. [28]

Leadership

See also

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. "About us". MFSA. Retrieved 2019-09-15.
  5. "National supervisors". ECB Banking Supervision. 29 December 2022.
  6. 1 2 3 "Our history". Central Bank of Malta. Retrieved 3 September 2025.
  7. 1 2 David Fabri & Godfrey Baldacchino (1999). "The Malta Financial Services Centre: A Study in Micro-State Dependency Management?" (PDF). In Mark Hampton & Jason P. Abbott (ed.). Offshore Finance Centres and Tax Havens: The Rise of Global Capital. Palgrave Macmillan.
  8. "Ten Years on". The Malta Independent. 6 February 2005.
  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. 9 August 2019. 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. 1 2 "MFSA Vision 2021" (PDF). MFSA. Retrieved 2019-09-15.
  14. "Ordinary Members of IOSCO". IOSCO. Retrieved 2019-09-15.
  15. "IAIS Organisation members". IAIS. Retrieved 2019-09-15.
  16. Scott, Matt (2016-06-20). "Controversy follows MFSA after it comes under fire for poor regulatory oversight". maltawinds.com. Retrieved 2019-09-16.
  17. tamir (2022-08-12). "MFSA's Edwina Licari And Joseph Cuschieri Splashed Malta's Taxpayers' Monies! | FinTelegram News" . Retrieved 2022-11-22.
  18. "MFSA's Joseph Cuschieri and Edwina Licari self-suspend over Las Vegas trip". Times of Malta. 30 October 2020. Retrieved 2022-11-22.
  19. "Updated (3): Las Vegas trip: MFSA CEO, general counsel self-suspend; lawyer quits FIAU board - The Malta Independent". www.independent.com.mt. Retrieved 2022-11-22.
  20. "MFSA scandal: Details emerge on Cuschieri's intervention to give Licari €100,000 job" . Retrieved 2022-11-22.
  21. 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.
  22. "Malta asks ECB to withdraw license of scandal-hit Pilatus Bank". Reuters. 2018-06-30. Archived from the original on December 14, 2019. Retrieved 2019-09-16.
  23. Martin, Ivan (2018-07-22). "Pilatus depositors threaten to sue MFSA over €80m". Times of Malta. Retrieved 2019-09-16.
  24. Martin, Ivan (2018-10-07). "Pilatus Bank's directors sue MFSA". Times of Malta. Retrieved 2019-09-16.
  25. Osborne, Hilary (2018-11-05). "Malta's Pilatus Bank has European licence withdrawn". The Guardian. ISSN   0261-3077 . Retrieved 2019-09-16.
  26. Megaw, Nicholas; Crow, David (2018-10-25). "Customers' money trapped at UK fintech due to Malta bank freeze". Financial Times . Retrieved 2019-09-16.
  27. Diacono, Tim (2018-10-26). "MFSA Keeps Satabank Clients In The Dark About Their Frozen Deposits". lovinmalta.com. Retrieved 2019-09-16.
  28. Camilleri, Ivan (2019-08-25). "MFSA official paid thousands to leave… re-employed weeks later". Times of Malta. Retrieved 2019-09-16.
  29. "Former MFSA chairman Joe Bannister becomes chairman of Amagis Capital". Malta Independent. 30 April 2018.
  30. "About Us: Board of Directors". The Access Bank Malta. Retrieved 1 September 2025.
  31. Karl Azzopardi (19 November 2020). "Finance minister Edward Scicluna to resign, proposed as Central Bank governor". Malta Today.
  32. "Appointment of Director General (Designate)". MFSA. 19 October 2013.
  33. Ned Holmes (3 January 2018). "John Mamo named new MFSA chairperson". Captive Insurance Times.
  34. "Appointment of MFSA Chief Executive Officer". MFSA. 13 April 2018.
  35. "MFSA Board unanimously appoints Christopher Buttigieg as acting CEO". whoswho.mt. 30 October 2020.
  36. 1 2 Jurgen Balzan (8 February 2023). "Jesmond Gatt appointed as new MFSA chairman". Newsbook Malta.
  37. Anthea Cachia (12 January 2024). "'25 years of excellence': Michelle Mizzi Buontempo marks silver anniversary at MFSA". whoswho.mt.
  38. "MFSA confirms new CEO, admits recent changes 'were not beneficial'". Times of Malta. 4 April 2023.