1. Malta Financial Services Authority Malta as a finance centre: A Model Of Stability in a Changing Landscape

2. MALTA Framework for the Development of Financial Services

3. Primary Legislation Banking Act Banking Act Financial Institutions Act Financial Institutions Act Insurance Business Act Insurance Business Act Insurance Intermediaries Act Insurance Intermediaries Act Investment Services Act Investment Services Act Special Funds Act [Retirement Pensions Act] Special Funds Act [Retirement Pensions Act] Trustees and Trusts Act Trustees and Trusts Act Malta Financial Services Authority Act Malta Financial Services Authority Act Central Bank of Malta Act Central Bank of Malta Act Financial Services Legislation

4. Supporting Legislation:- Companies (includes Limited Partnerships) Act Companies (includes Limited Partnerships) Act Netting upon Insolvency Act Netting upon Insolvency Act Securitisation Act Securitisation Act Prevention of Financial Market Abuse Act Prevention of Financial Market Abuse Act Professional Secrecy Act Professional Secrecy Act Prevention of Money Laundering Act Prevention of Money Laundering Act

5. Regulation Malta Financial Services Authority (MFSA) Single regulator for financial services Regulates banking, financial institutions, insurance companies, investment services companies, securities, stock exchanges and listing, trust management companies, pension schemes Autonomous public institution, self- funded Avoidance of Prescriptive Regulation to allow promoters the flexibility to operate

6. Main Objectives of the MFSA to regulate, monitor and supervise financial services in Malta; to regulate, monitor and supervise financial services in Malta; to promote the general interests and legitimate expectations of consumers of financial services, and to promote fair competition practices and consumer choice; to promote the general interests and legitimate expectations of consumers of financial services, and to promote fair competition practices and consumer choice; to advise the Government generally on the formulation of policies in the field of financial services, and to make recommendations to Government as to any action which in the opinion of the Authority, it would be expedient to take in relation to matters in respect of which the Authority has such duties; to advise the Government generally on the formulation of policies in the field of financial services, and to make recommendations to Government as to any action which in the opinion of the Authority, it would be expedient to take in relation to matters in respect of which the Authority has such duties;

7. MFSA - Structure MFSA Board of Governors Legal & Int Affairs Unit Chairman Co-ordination Committee Supervisory Council Board of Management and Resources Director General Chief Operations Officer Company Registry Registrar of Companies Board Secretary

8. Functions – Board of Governors Board of Governors is composed of seven members including the Chairman. Chairman and Governors appointed for a period of up to five years and their appointment may be renewed for further periods of five years; Board of Governors is composed of seven members including the Chairman. Chairman and Governors appointed for a period of up to five years and their appointment may be renewed for further periods of five years; Board of Governors sets policy; Board of Governors sets policy; The Legal and International Affairs Unit acts as Secretary to the Board of Governors and the Co- Ordination Committee. The Legal and International Affairs Unit acts as Secretary to the Board of Governors and the Co- Ordination Committee.

9. Composition of the Supervisory Council

10. Remit of the Supervisory Council Remit of the Supervisory Council Art 10. (1) of the MFSA Act states:- Art 10. (1) of the MFSA Act states:- – The Supervisory Council shall be responsible for the approval of and for the issuing of licences and other authorisations, for the processing of applications for such licences and authorisations, and for the monitoring and supervision of persons and other entities licensed or authorised by the Authority in the financial services sector.

11. Board of Management & Resources MFSA Act Art 11 states.....responsible for carrying out the day-to-day management and finances of the Authority, including business development and ancillary services and for the general co-ordination of the Authoritys administrative affairs and shall be composed of the persons responsible for such activities as may be designated by the Board of Governors

12. Remit - Board of Management & Resources

13. Co-Ordination Committee Chief Operations Officer - Board of Development and Resources

14. Membership of International Organisations New EU Supervisory Architecture:- European Securities & Markets Authority (ESMA) European Securities & Markets Authority (ESMA) European Banking Authority (EBA) European Banking Authority (EBA) European Insurance and Occupational Pensions Authority (EIOPA) European Insurance and Occupational Pensions Authority (EIOPA) International Association of Insurance Supervisors (IAIS) International Association of Insurance Supervisors (IAIS) International Organization of Securities Commissions (IOSCO) International Organization of Securities Commissions (IOSCO) International Organisation of Pensions Supervisors (IOPS) International Organisation of Pensions Supervisors (IOPS)

15. Memoranda of Understanding currently in force

16. MFSA Human Resources

17. Number of Employees

18. Males and Females

19. Employee Age Bracket

20. Qualified Personnel

21. International Evaluation FATF – Financial Action Task Force (1999) FATF – Financial Action Task Force (1999) OECD – Organisation for Economic OECD – Organisation for Economic Co-operation and Development (2000) Council of Europe Money Laundering Committee (2001) Council of Europe Money Laundering Committee (2001) EU Peer Review (2002) EU Peer Review (2002) International Monetary Fund – full FSAP (2003) International Monetary Fund – full FSAP (2003)

22. International Evaluation Malta embraces international tax standards for transparency and exchange of information and has joined OECD member countries in committing to eliminate harmful tax practices.Malta embraces international tax standards for transparency and exchange of information and has joined OECD member countries in committing to eliminate harmful tax practices. (OECD Official News Release, June 2000) (OECD Official News Release, June 2000) a comprehensive and robust legal framework and a particularly well-regulated financial sector a comprehensive and robust legal framework and a particularly well-regulated financial sector (Report of the Council of Europe Money-laundering Committee, April 2003) (Report of the Council of Europe Money-laundering Committee, April 2003)

23. International Evaluation The World Economic Forum Report on Competitiveness (2010-2011) Report places: The World Economic Forum Report on Competitiveness (2010-2011) Report places: 1. Malta in the 11 th position in financial market development. Key performance indicators for the financial services sector also confirm the sectors standing as a leading innovator in the Maltese economy. 2. Soundness of Maltese banks has been ranked in 10 th position. 3. Malta is in the 12 th position in the assessment carried out on the regulation of securities exchanges. 4. 8 th position on the strength of auditing and reporting standards.

24. International Evaluation Maltas financial system appears to be healthy and well supervised …. Malta has a comprehensive legal framework and strongly adheres to most of the international standards and codes…. The authorities have undertaken major efforts in strengthening the supervisory framework Maltas financial system appears to be healthy and well supervised …. Malta has a comprehensive legal framework and strongly adheres to most of the international standards and codes…. The authorities have undertaken major efforts in strengthening the supervisory framework (International Monetary Fund, Financial System Stability Assessment (FSSA), September 2003) (International Monetary Fund, Financial System Stability Assessment (FSSA), September 2003)

25. Independent Assessment based on: Basel Core Principles (BCP) International Organisation of Securities Commission (IOSCO) International Association of Insurance Supervisors (IAIS)

26. Assessors:- Piero Ugolini (former Assistant Director – IMF and mission Chief of the IMF/World Bank team that conducted the 2002/3 FSAP exercise) Richard Nun (former Deputy Director – Texas Banking/Finance Commission, Austin-Texas; and currently peripatetic expert in banking Supervision – IMF and Centennial Group – Washington D.C., USA Michael Kehr, Senior Advisor International Policy/Affairs, Bafin, Bundesanstalt fur, Finanzdienstleistungsaufsicht, Federal Financial Supervisory Authority, Germany

27. Maltas financial sector is sound and well supervised but very concentrated Maltas financial sector is sound and well supervised but very concentrated Very concentrated sector and strong reliance on real estate properties collateral Very concentrated sector and strong reliance on real estate properties collateral Insurance and Securities : not systemically important Insurance and Securities : not systemically important Insurance companies are healthy Insurance companies are healthy 2002/3 FSAP Overall Outcome

28. Whats new? World wide dissemination of international standards and best practices World wide dissemination of international standards and best practices Entry into EU – 2004 Entry into EU – 2004 Concentration of Supervision in MFSA Concentration of Supervision in MFSA Expansion of financial sector and reputational risk/benefit Expansion of financial sector and reputational risk/benefit The 2010 Assessment: BCP-IAIS-IOSCO

29. Positive : progress noted in all assessments Positive : progress noted in all assessments Banking sector : the most clear progress Banking sector : the most clear progress Insurances : recent extensive changes in the Principles do not allow a proper comparison with 2003 Insurances : recent extensive changes in the Principles do not allow a proper comparison with 2003 Securities : progress from an already relatively 2002/3 positive assessment Securities : progress from an already relatively 2002/3 positive assessment 2010 Overall Outcome

30. BCP Comparison 2002/3 Assessment 2002/3 Assessment Compliant : 11 Compliant : 11 Largely Compliant: 12 Largely Compliant: 12 Materially NC: 1 Materially NC: 1 2010 2010 Assessment Assessment Compliant :21 Compliant :21 Largely Compliant: 5 Largely Compliant: 5 Materially NC : 0 Materially NC : 0

31. October 2000 methodology : 17 Principles October 2000 methodology : 17 Principles October 2003 methodology : 28 Principles October 2003 methodology : 28 Principles Insurance - IAIS

32. IAIS Principles - Broad Comparison 2002/3-2010 32 2002/3---17 ICP 2002/3---17 ICP Observed: 12 Observed: 12 Broadly observed: 3 Broadly observed: 3 Materially non observed: 2 Materially non observed: 2 2010 ---28 ICP 2010 ---28 ICP Observed : 22 Observed : 22 Largely observed: 4 Largely observed: 4 Partly observed : 2 Partly observed : 2 Non observed : 0 Non observed : 0

33. IOSCO 2002/3- 2010 30 Principles 2002/3 2002/3 Implemented : 22 Implemented : 22 Broadly implemented:0 Broadly implemented:0 Partly implemented: 6 Partly implemented: 6 Non- implemented: 0 Non- implemented: 0 Not applicable: 2 Not applicable: 2 2010 2010 Implemented: 24 Implemented: 24 Broadly implemented: 4 Broadly implemented: 4 Partly implemented: 0 Partly implemented: 0 Non implemented: 0 Non implemented: 0 Not applicable: 2 Not applicable: 2

34. Overall progress and strong framework -- Entry in EU -- Implement international standards and best practices -- Reorganization at the MFSA -- Good communication and transparency Conclusions

35. MALTA Critical Success Factors

36. Legislation Flexible & versatile legal framework Flexible & versatile legal framework Civil Law jurisdiction Civil Law jurisdiction Business legislation based on English law principles Business legislation based on English law principles Old, established juridical system Old, established juridical system Laws and Regulations published in English and Maltese Laws and Regulations published in English and Maltese

37. Financial Reporting Financial Reporting IFRS – International Financial Reporting Standards since 1997 IFRS – International Financial Reporting Standards since 1997 Accounting records and bank accounts in foreign currencies Accounting records and bank accounts in foreign currencies PWC, Deloitte, Ernst & Young, KPMG, Grant Thornton, PKF, BDO, Mazars etc PWC, Deloitte, Ernst & Young, KPMG, Grant Thornton, PKF, BDO, Mazars etc

38. Human Resources Multilingual community Multilingual community English is the working language. Well- spoken Italian, French, Spanish, German; English is the working language. Well- spoken Italian, French, Spanish, German; Free market for labour; Free market for labour; Availability of multilingual graduates in disciplines related to financial services as also administrative and clerical staff; Availability of multilingual graduates in disciplines related to financial services as also administrative and clerical staff; High levels of productivity. High levels of productivity.

39. Cost Structure - Average Salaries General Manager Euro74,000 Senior IT Manager Euro45,000 Finance and admin manager Euro26,000 Network Admin/Programmer Network Admin/ProgrammerEuro24,000 Senior/executive staff Euro19,000 Office clerk/secretary Office clerk/secretaryEuro14,000 Receptionist ReceptionistEuro12,000 Source: Malta Financial Services Authority

40. Cost structures - Office Rent (Euros per sq.m. per Cost structures - Office Rent (Euros per sq.m. per annum) Dublin 524 London 984 Paris 924 Frankfurt 555 Malta 135 Source: CB Richard Ellis – Global Market Rents (Nov 2010) and MFSA Data

41. Taxation Modern and competitive tax regime Modern and competitive tax regime Tax-efficient base for outsourcing activities Tax-efficient base for outsourcing activities Tax system based on the full imputation system: Tax system based on the full imputation system: 35% tax on company profits …… 35% tax on company profits …… shareholders receive full credit for any tax paid by the company from which a dividend is received shareholders receive full credit for any tax paid by the company from which a dividend is received Double tax treaties with 56 countries Double tax treaties with 56 countries

42. The Opportunities Funds Services Funds Services Managed insurance and Re- Insurance Companies Managed insurance and Re- Insurance Companies Management of Trusts Management of Trusts Management of Pension Schemes Management of Pension Schemes Financial Institutions Financial Institutions Banking Services Banking Services

43. COMPETITIVE HIGH QUALITY SKILLS STEADFAST REGULATION STEADFAST REGULATION AGILITY IN THE MARKET AGILITY IN THE MARKET MALTA - the culture of getting things done

44. . www.mfsa.com.mt Thank you!