‘I am immensely proud of the progress we have made this year’ – MFSA CEO

On Wednesday (today), the Malta Financial Services Authority (MFSA) CEO Kenneth Farrugia highlighted that he is immensely proud of the progress the authority made this year.

This was said following the release of the MFSA’s 2023 Annual Report noting a growth of 11.8 per cent in the financial services sector.

He continued that its focus on being an effective and efficient regulator “strengthened the MFSA’s role in the financial services sector, both in Malta and internationally.

The MFSA published a statement along with the report, where it noted that the growth of the sector “contributes significantly to the country’s Gross Value Added (GVA).” During the year under review, the sector generated €1,251 million in GVA.

Furthermore, the report states that the number of people employed in the local financial services sector has also grown by nearly 6,500 people in absolute terms between 2019 and 2023.

The authority received 352 applications for new licences across all sectors during the year, 84 per cent of which were approved and 16 per cent withdrawn or refused.

The report details the authority’s efforts to safeguard consumer interests through increased oversight, and a greater emphasis on compliance within the financial sector.

“The authority increased its supervisory interactions by 50 per cent between 2023 and 2024, with a continued emphasis on financial crime compliance. During the year, 77 enforcement actions were taken, amounting to €444,800 in penalties,” the MFSA shared.

The MFSA has set benchmarks in different regulatory areas, including the Virtual Financial Assets (VFA) Framework, which aligns closely with the European Union’s Markets in Crypto-Assets (MiCA) regulation, positioning Malta at the forefront of digital finance. 

The Notified Professional Investor Funds (NPIF) Framework was launched in December 2023, “enhancing Malta’s attractiveness as a fund management jurisdiction.”

Additionally, through its participation in an EU multi-country project which is set to bolster supervisory capacity in sustainable finance, the authority is also underscoring its commitment to forward-thinking regulation.

In 2023, the MFSA strengthened its global collaboration. As part of its outreach strategy, several new memoranda of understanding were signed with both local and foreign institutions, and bilateral meetings were held on an ongoing basis with regulatory peers to exchange best practices.

It also held 10 regulatory briefings, supplemented by a number of official publications throughout the year, including Dear CEO letters and guidance notes – a means through which the MFSA clearly set out the expectations that need to be met by licensed entities.

With the aim of protecting consumers, the authority has published over 30 warnings and rolled out four education campaigns to improve financial literacy among the public, including information on scams, the impact of inflation, and the risks around crypto investments.

The MFSA highlights that “its success hinges on its team’s expertise and need to keep abreast with the latest developments in the sector.”

Through its Financial Supervisors Academy, the authority’s employees received 27,400 training hours in 2023, up by 29 per cent from 2022.

Chairman Jesmond Gatt said that the authority understands that financial services “are not merely about numbers and transactions, they are about people’s lives, aspirations, and futures.”

“Our regulatory framework is designed to protect consumers, ensuring that they have access to transparent and reliable financial products and services,” he concluded.