MFSA published the strategic plan for 2019–2021, presenting its supervisory and other work priorities for the period. This plan has been developed in the context of the challenges faced by local and international financial markets and the new emerging risks emanating from the drive toward financial innovation and technology. The strategic plan gives due consideration to international regulatory developments and instances of misconduct on both local and global levels, which may have negatively impacted the trust in the financial services market worldwide.
The strategic plan demonstrates a sound commitment to address the recommendations of IMF, EC, and ESAs. In addition to a number of sector-specific priorities, the strategic plan draws on the main pillars of the strategic framework of MFSA and targets specific cross-sectoral priorities, including the following:
- Governance, culture and conduct—The strategic plan provides for measures and initiatives that MFSA will undertake to enhance its internal governance, risk management framework, and organizational structure, while providing for measures that are aimed at engaging with supervised firms to promote and ensure effective governance structures and cultures in the financial services market.
- Financial stability and sustainability—To enhance internal capacity and expertise in monitoring the buildup of potential risks to the financial system, revised governance and organizational structure of MFSA provides for the creation of a Financial Stability function within the newly set-up Strategy, Policy, and Innovation Directorate. The strategic plan aims to enhance the monitoring of threats to financial stability, calibrating macro-prudential toolkit, policy, and analytical tools to enhance the effectiveness of oversight of the financial market. MFSA plans to develop preventive policies designed to mitigate the identified risks and to enhance its work on recovery and resolution. In addition, MFSA is working on enhancing risk models and the development of a network model, mapping out the interconnectedness with the banking and the wider financial sector. MFSA will continue to follow developments at the EU level with respect to sustainable finance, examine the impact of proposed changes to the local financial sector, and consult with all relevant stakeholders before seeking to implement the relevant EU legislation, in line with the requirements of the local market.
- Technology and innovation—Technology and innovation is a key priority area for MFSA and the strategic plan focuses on providing solutions that nurture technology and innovation while facilitating access to the market. As part of the strategic plan, MFSA strives to ensure that its regulatory and supervisory approach keeps pace with the technological progress.
- Cyber-security and resilience—Measures and initiatives are planned to ensure that regulated firms have a cyber-security program in place, which is designed to enhance their resilience to cyber-attacks and mitigate the risks associated with threats such as disruption of service, data breaches, and loss of data.
- Conduct supervision—As part of the supervisory work, MFSA gathers information on instances of harm or risks of potential harm. MFSA plans to gather this information through multiple sources such as routine supervisory and enforcement activity, thematic reviews, market research, social media listening, and surveys.
Keywords: Europe, Malta, Banking Insurance, Securities, Strategic Plan, Financial Stability, Governance, Recovery and Resolution, Macro-Prudential Policy, Cyber Risk, Fintech, MFSA
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