Maltese Agencies Address Regulatory Reporting and Green Finance Issues
The Malta Financial Services Authority (MFSA) issued a circular on the implementation of automated and additional data quality controls on supervisory reporting by credit institutions while the Central Bank of Malta (CBM) published a paper that looks at the state of green finance in the local capital markets. The study shows that only a small percentage of Maltese investors stated that they have invested in green finance and consider taking on more green bonds should the opportunity arise. Issuers noted a large knowledge gap in this area within the domestic financial market while the study identified many other barriers to entry.
The MFSA circular on supervisory reporting covers the implementation of automated and additional data quality controls on supervisory reporting submissions, referred to as EGDQ checks. The European Central Bank (ECB), on September 09, 2022, launched an enhancement to its data processing and validation engine, known as SUBA. The update includes the application of cross-module validation rules covering data quality controls across two or more supervisory reporting modules and cross-time validation rules covering data quality controls across different reference dates. ECB informed MFSA that it plans to gradually phase-in the implementation of the cross-module validation rules in the coming months. Thus, supervisory reporting submissions and resubmissions made after September 09, 2022 through the LH Portal under project "ITS on Supervisory Reporting," which will subsequently and automatically be forwarded to SUBA, will be assessed and validated against the data quality validation rules. Consequently, credit institutions may experience an increased number of failing data quality checks for their (re)submissions and are requested to rectify the emanating data quality issues through a resubmission and/or explanation, with the exception of ECB EGDQ checks for less significant institutions, which for the time being are requested to rectify these on a best effort basis. Going forward, MFSA will continue to send the ECB SUBA feedback bilaterally to institutions. This Circular does not currently apply to branches of European Union/European Economic Area credit institutions established locally under the freedom of establishment and to non-EU credit institutions licensed to establish a branch in Malta.
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Keywords: Europe, Malta, Banking, Reporting, LH Portal, SUBA, Greenwashing, ESG, Green Bonds, Sustainable Finance, ECB, MFSA, CBM
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