The Malta Financial Services Authority (MFSA) published the corporate governance code for authorized entities, in addition to the three Circulars for banks. One circular involves the new Banking Rule BR/25 on financial and mixed financial holding companies while another circular addresses minor amendments to the Banking Rule BR/14 on outsourcing by credit institutions. Finally, the last circular is focused on the removal of temporary capital and liquidity relief measures related to the COVID-19 pandemic.
As it relates to the circular on banking rule BR/25, the CRD 5 Banking Package consisted of significant amendments to the CRD 4 and the CRR 1. The amendments were transposed into local legislation and regulations in this respect. One of the salient amendments brought forward by the CRD 5, through the new Article 21a, was the introduction of the approval or exemption of financial holding companies and mixed financial holding companies that are, inter alia, part of a banking group. The legislative provisions were transposed and presently in force in Articles 11B and 29AA of the Banking Act (Chapter 371 of the Laws of Malta). The new Rule is intended to further provide clarity and detail to the industry in relation the new mechanism for the approval or exemption of a financial and a mixed financial holding company falling within the scope of Article 11B of the Act. The Authority also issued two Annexes to the new Rule. Annex I provides for the Application Form/s and Annex II provides for the Annual Declaration Form. The new Rule and Annexes will come into force with immediate effect.
The Circular to credit institutions on a minor amendment to BR/14 explains that the amendments in the Rule are being put forward to incorporate a paragraph from the EBA Guidelines on Outsourcing Arrangements (EBA/GL/2019/02), which are already applicable through the BR/14. The amendment will come into force with immediate effect. Additionally, the circular on the removal of pandemic relief measures confirms that all banks must operate above their Pillar 2 Guidance from January 01, 2023 and that the liquidity relief, which allowed banks in Malta to operate with an LCR below 100%, expires from August 11, 2022 (all banks in Malta currently operate above 100%).
- Circular on BR/25
- Annex 1 to BR/25 (PDF)
- Annex 2 to BR/25 (DOC)
- Circular on BR/14
- Circular on Removal of Pandemic Measures
- Corporate Governance Code and Related Documents
Keywords: Europe, Malta, Banking, Banking Rule, Basel, Regulatory Capital, Pillar 2, Covid 19, LCR, Liquidity Risk, Outsourcing Arrangements, CRD5, Corporate Governance, BR14, BR25, MFSA
Previous ArticleBSP Authorizes Two More Digital Banks, Focuses on Cyber Resilience
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)