MFSA Amends Banking Rules, Consults on ICT-Related Incident Reporting
The Malta Financial Services Authority (MFSA) published the guidelines for credit institutions under the reporting framework 3.0 (reporting under the Capital Requirements Directive), along with the revised Banking Rule BR/15 on capital buffers and Banking Rule BR/24 on internal governance of credit institutions; both the revised rules (BR/15 and BR/24) will come into force with immediate effect. Also published was a consultation document, along with a template, on the reporting of major information and communication technology (ICT)-related incidents. Finally, another publication is the annual report for 2021, which highlights the work done by MFSA during the past year.
Amendments to Banking Rules. The key amendments include the following:
- Amendment to BR/15 is in relation to an incorrect reference in paragraph 56 in order to change the reference to paragraph 49E to paragraph 52 accordingly.
- Amendment to BR/24. The reference to the guidelines of the European Banking Authority (EBA) on information and communication technology (ICT) and security risk management (EBA/GL/2019/04) has been added to the requirement in paragraph 73(a) and added within the scope of the BR/24. In this regard, a new paragraph 295 is being added to cater for a general obligation of credit institutions to abide by the EBA guidelines as well as the MFSA guidance on technology arrangements, ICT and security risk management, and outsourcing arrangements. For implementation purposes, credit institution shall note that the EBA guidelines on ICT and security risk management were already applicable and in force through the MFSA guidance before this particular amendment to BR/24. This amendment is being undertaken only for clarity purposes.
Consultation on reporting of major ICT-related incidents. According to the proposed updated major ICT-related incident reporting process, authorized persons will be expected to submit:
- An initial report within four hours after an incident has been classified as major. Such classification is expected to take place within twenty-four hours after an incident has been detected.
- An intermediate report within three working days from the submission of the initial report, irrespective of whether the incident has been resolved. An authorized person may provide one or more intermediate report/s at different stages within the resolution process.
- A final report within twenty working days after business is deemed back to normal.
This updated process does not replace or supersede any legal obligation by authorized persons to report incidents to other competent authorities. In establishing the updated process, MFSA takes into consideration the challenges with the current incident reporting process, the course that Digital Operational Resilience Act (DORA) is expected to be taking, and established incident reporting guidelines. This process will eventually have to be aligned with DORA when it enters into force. MFSA will communicate the method to securely submit major ICT related incident reports at a later stage. Annex 1 of the consultation documents sets out the major incident thresholds matrix. MFSA is requesting feedback on the consultation by August 05, 2022.
Related Links
- Reporting Guidelines for Credit Institutions (XLSX)
- Circular on Amendments to Banking Rules
- Consultation and Template on ICT-Related Incidents Reporting
- Press Release on Annual Report
- Annual Report (PDF)
Keywords: Europe, Malta, Banking, Basel, Regulatory Capital, Internal Governance, ICT, Incident Reporting, Reporting, DORA, Regtech, Technology Risk, Outsourcing Arrangements, MFSA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
BIS Updates Address CBDC and Other Aspects of Technology InnovationRelated Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
