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
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.