Maltese FSA Publishes Annual Report

by Lorys Charalambous, Tax-News.com, Cyprus

22 April 2010

The Maltese Financial Services Authority (MFSA) has said in its annual report, published on April 16, that the island’s finance industry “performed extremely well,” growing significantly despite the financial economic crisis.

The MFSA noted in particular that during 2009, Malta continued to be ranked highly for its financial sector. The World Economic Forum’s Global Competitiveness Index 2009-2010 ranked Malta 13th out of 133 countries for its financial market sophistication, while the banking system was reported to be the 13th soundest in the world.

“The world has experienced the worst economic conditions of the last 70 years, with the finance sector being one of the biggest casualties, yet Malta has seen its finance industry grow and its international reputation remain high. Our continued success is a tribute to the prudent policies of our banks and other financial institutions and to the high quality of the people who work in the industry. We have the expertise the world seeks, but more importantly we have established a sound reputation for stability, steadiness and high standards,” Joe Bannister, Chairman of the MFSA, commented in the report.

The Authority reports that while the number of people working in financial services fell in many countries following the global financial crisis, finance sector employment in Malta increased by 103 and the industry now accounts for 8,900 direct and indirect jobs.

During 2009, the MFSA issued new licenses in all areas of financial services activity. The MFSA’s Supervisory Council met 34 times and granted a total of 168 new licenses, authorizations, enrolments and registrations to conduct financial services business. There was again a substantial increase in the number of professional investor funds and fund managers. Another credit institution was added on the banking side, while the number of insurance companies and intermediaries and authorized trustees also continued to increase. No finance businesses of any significant size ceased trading in Malta during 2009.

The majority of the world’s leading insurance management businesses had operations in Malta by the close of 2009. As a result, this sector is expected to grow organically in future, rather than through inward investment, the MFSA said.

“We set out some five years ago to build Malta’s capabilities in managed insurance and the fact that most of the world’s largest providers are now in Malta puts us in a strong position to be one of the leading EU managed insurance jurisdictions in future. As the global economy recovers we are likely to see significant growth in the volumes of business coming to Malta,” said Bannister.

Noting developments during 2009, the MFSA noted an agreement with the UK that set a framework for the regulation and supervision of occupational pension schemes and funds, which will allow Malta to target the UK market.

Other significant developments on the international stage included the MFSA signing or finalizing a total of seven new memoranda of understanding with foreign jurisdictions, the completion of work on the technical evaluation and legislation for Sharia products, and seven major research projects, including work on examining the potential to open new markets beyond the EU.

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