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Malta and the EU 9 Years down the line 1 Horizon 3: Aviation Horizon 1: Shipping (Since 1973) Horizon 2: Banking Insurance Investment Services & Funds.

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Presentation on theme: "Malta and the EU 9 Years down the line 1 Horizon 3: Aviation Horizon 1: Shipping (Since 1973) Horizon 2: Banking Insurance Investment Services & Funds."— Presentation transcript:

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2 Malta and the EU 9 Years down the line 1

3 Horizon 3: Aviation Horizon 1: Shipping (Since 1973) Horizon 2: Banking Insurance Investment Services & Funds Multi-nationals (Since 1994) … alchemy of growth

4 9 Years down the line The last 8 years have changed our country dramatically and positively. The majority of Maltese citizens recognise this reality, notwithstanding differing political affiliations. Eurobarometer has recently found that the number of Maltese who believe that the EU has been of benefit to the country exceeds those who. do not by a ratio of more than two to one.

5 Eurobarometer Survey Has Malta benefited from being a member of the EU? (May 2010) Source: Standard Eurobarometer 73

6 The changes experienced - - Both the government and the private sector conduct their business and take decisions with a greater focus on the longer term - - More emphasis is given to managing the realities before us, and on husbanding our resources, as opposed to the amateurish wishful thinking of the past

7 The changes experienced - - The massive investment in several sectors coupled with the reduction of bureaucracy and simplification of tax and other rules has led to the development of a vibrant and diversified economy - - Active participation at all levels has enabled us to both defend Malta’s interests and help shape the EU’s future direction on the basis of our national experiences and those of our partners

8 Malta’s size has not hindered us from attaining our goals - - Changes to budget legislation which worked against us as the most densely populated country in the EU - - The re-shaping of the EU's policy on illegal immigration so that solidarity in this area became part of EU policy. Hosting the European Asylum Support Office in Malta - - Ensuring that the Regulation on the Registration, Evaluation and Authorisation of Chemicals (REACH) had an SME focus - - Negotiating a sixth Maltese seat in the European Parliament

9 Malta’s Performance as an EU Member State - - Malta’s representatives are described as persons who know their business and put forward strong and persuasive arguments - - We are considered to be a country which - due to our preparedness - normally ‘punches well above its weight’ - - This is not just something to be proud of but, given our size, is a necessity if we want to be truly effective

10 Malta’s Performance as an EU Member State - - The Commission’s bi-annual Internal Market Scoreboard confirmed Malta as leader for the seventh consecutive time in terms of the transposition of internal market Acquis - - Malta has one of the lowest number of open infringements in the Union; this being the case for the past four years

11 The lessons learnt - - While there is no such thing as ‘mission impossible’, consistency, patience and resolve are essential attributes; - - Master your brief and only spend time on what is truly important to your country - - At all times be constructive, work with others and actively look for solutions not just for your country but also for others

12 Quote…… “ …in Malta’s case, not only has membership of the European Union been beneficial on multiple levels, but it has permitted the Maltese Government to respond more effectively to national challenges while contributing to addressing European interests and concerns which are today interlinked with the concerns of Maltese citizens. EU membership is a tool and we would not be where we are today without the opportunities provided by this tool and the Maltese Government’s effective use of it.”

13 Malta and the EU The Economy 12

14 Diversification of the Economy - - Malta’s economy has diversified substantially with the emergence of new sectors which were impossible or even unimaginable before EU membership - - These sectors have created many new and better- paid jobs than those lost in the scaled-down sectors - - The use of EU Funds is another way in which Malta has benefited - - Malta benefited from some €1.3 billion EU funds (which equates to over €3,250 per capita) between 2004 and 2013

15 Economic Performance - - Since membership, Foreign Direct Investment has never gone below 7% of Malta’s GDP, and in June 2011 the stock of FDI in Malta was estimated to total €12.4 billion - - In 2011, Malta brought its deficit below the 3% level being one of just six Eurozone countries to do so - - In February 2012, Malta was among a minority of Member States not needing further in-depth review by the Commission of its macro- economic and fiscal status

16 Employment and Growth - - Employment growth rate of 2.7% in 2011, the third largest growth rate amongst the EU Unemployment in Malta, stands at 6.5% of the labour force, the fifth lowest in the EU compared to 11.1% unemployment rate in the Eurozone - - Over 93% of Malta’s graduates find employment within three years of their graduation compared to the EU average of 76.5% - - The compounded annual average growth rate of GDP has been a remarkable 4.4% over the period 2003 to 2011

17 Economic output source: Eurostat EUR 6,755,851,000 Malta GDP (2012)

18 Economic output source: Eurostat Malta GDP per capita (2012) EUR 16,100

19 Unemployment Malta (2012) 6.5% Euro Area (2012) 11.4% European Union (2012) 10.5% source: Eurostat

20 Inflation Malta (2012) 3.2% Euro Area (2012) 2.5% European Union (2012) 2.6% source: Eurostat

21 Government Deficit Malta (2011) -2.7% Euro Area (2011) -4.1% European Union (2011) -4.4% source: Eurostat 2012 data not yet available

22 Government Gross Debt Malta (2011) 70.9% Euro Area (2011) 87.3% European Union (2011) 82.5% source: Eurostat 2012 data not yet available

23 Table SIZE OF MALTESE BANKS Core domestic banksNon-core domestic banksInternational banks Total assets (EUR billions) 12, , , Total assets (as % of GDP) Source: Malta Financial Services Authority

24

25 MFSA Creating a finance centre – the Supervisory Authority 24

26 MFSA’s Historical timeline 1988 MIBA offshore regime 1989 Set up of Malta Stock Exchange 1994 MFSC onshore regime: Regulation – Transparency - Taxation 1996 Grant of offshore licences stopped 2000 Malta OECD accord FATF co-operative jurisdiction 2002 MFSA set up as Single Regulator Set up of FIAU 2004 Offshore licences stopped/nominee companies phased out Agenda for Maltese Financial Services in Europe Financial Services Consultation Council EU Entry: Regulatory Standards & Single Market

27 MFSA’s Historical timeline 2007 MFSA Strategic Plan MFSA move towards Integrated Regulation 2011 MFSA Strategic Plan Setting up of Enforcement Unit 2013 Introducing Conduct of Business

28 Primary Legislation Banking Act Financial Institutions Act Financial Markets Act Insurance Business Act Insurance Intermediaries Act Investment Services Act Retirement Pensions Act Trusts and Trustees Act MFSA Act Central Bank of Malta Act Financial Services Legislation 27 Supporting Legislation:- Companies (includes LPs) Act Netting upon Insolvency Act Securitisation Act Prevention of Financial Markets Abuse Act Professional Secrecy Act Prevention of Money Laundering Act

29 Regulation Malta Financial Services Authority (MFSA):- Single regulator for financial services Single regulator for financial services Regulates banking, financial institutions, insurance companies, investment services companies, securities, recognised investment exchanges and admissibility to listing, trust management companies, pension schemes Regulates banking, financial institutions, insurance companies, investment services companies, securities, recognised investment exchanges and admissibility to listing, trust management companies, pension schemes Listing Authority Listing Authority 28

30 MFSA’s approach to regulation Autonomous public institution, self-funded Avoidance of Prescriptive Regulation to allow promoters the flexibility to operate Risk-based supervision Regulation is proportionate to the size and nature of the business Direct contact with all license holders On-site and off-site supervision

31 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; 30

32 MFSA - Organogram Board of Governors Legal & Int. Affairs Unit Int. Affairs Unit Legal & Int. Affairs Unit Int. Affairs Unit ChairmanChairman Board Secretary Supervisory Council Board of Management and Resources Board of Management and Resources Director General Chief Operations Officer Company Registry Registrar of Companies Enforcement Unit DirectorDirector Co-ordination Committee

33 Functions – Board of Governors Board of Governors - composed of 7 members including Chairman. Chairman and Governors appointed for a period of up to 5 years and their appointment may be renewed for further periods of 5 years; Board of Governors - composed of 7 members including Chairman. Chairman and Governors appointed for a period of up to 5 years and their appointment may be renewed for further periods of 5 years; Board of Governors sets policy; Board of Governors sets policy; Legal and International Affairs Unit - Secretary to the Board of Governors and the Co-Ordination Committee. Legal and International Affairs Unit - Secretary to the Board of Governors and the Co-Ordination Committee. 32

34 Co-Ordination Committee 33 Act as contact point and principal channel of communication/co- ordination between Board of Governors, Supervisory Council and Board of Mgt & Resources. Co-ordinates the implementation of policies approved by the Board of Governors.

35 Co-Ordination Committee Responsible for the Co-Ordination of the implementation of the policies of the Authority Act as contact point and principal channel of communication/co-ordination between Board of Governors, Supervisory Council and Board of Mgt & Resources

36 Composition of the Supervisory Council SUPERVISORY COUNCIL Director General Director Banking Supervision Director Insurance & Pensions Supervision Director Securities & Markets Supervision Director Regulatory Development Director Authorisation 35

37 Remit of the Supervisory Council Remit of the Supervisory Council 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 – 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. 36

38 Tasks (I) Authorisation   Insurance Companies   Banks / Financial Institutions (payment services; financial leasing; venture or risk capital; money broking; e-money issuers)   Collective investment schemes / Investment Services Licences (asset managers, trustees, custody, stockbroking)   Regulated markets & Central Securities Depositaries   Retirement Schemes and Retirement Funds   Due Diligence exercise carried out prior to licensing

39 Tasks (II) Supervision   Compliance with laws and regulations   Compliance with licence conditions   On-site and off-site supervision   Admissibility of Financial Instruments Regulation   Drafting of legislation, legal notices and regulations   Rules and Guidance Notes   Issue of Circulars

40 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 Authority’s administrative affairs and shall be composed of the persons responsible for such activities as may be designated by the Board of Governors” 39

41 Board of Management & Resources 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 Authority’s administrative affairs Presided by the Chief Operations Officer as Chairman and Heads of Unit responsible for Communications and Events, Administration, Human Resources and Training, Finance and Risk Management, Information Systems

42 Remit - Board of Management & Resources Admin- istration Upkeep of premises – including cleaning and maintenance Organisation of transport, Security HRD & Training Internal personnel training Industry training programmes HR functions – recruitment, personnel records, staff appraisals Support Education Council Information Systems Systems development, outsource system applications, data security & integrity Implement new systems & infrastructure, security, support, maintenance System back-up and business continuity IT Security Communic - ations Information – website, enquiries, intranet Public Relations – media, press releases Events – conferences, seminars, training logistics, conference facilities Finance & Risk Finance – Accounting records, internal control, budgets, fees Procurement Operational risk management 41

43 MFSA Creating a finance centre – Recognised Investment Exchanges 42

44 Malta Stock Exchange European Wholesale Securities Market 43 Recognised Investment Markets

45 A new regulated market for wholesale fixed income securities, registered and domiciled in Malta in 2012 [Majority Shareholder – Irish Stock Exchange (ISE) Minority shareholder – Malta Stock Exchange (MSE)] The EWSM is approved as an EU regulated market under MiFID. Dedicated to arrangers and issuers of wholesale [€100,000 denomination] securities under the Prospectus Directive 44 European Wholesale Securities Market - EWSM

46 Why Malta and Ireland? Long standing relationship between ISE and MSE. Combines strengths of two reputable exchanges into one truly European market designed to meet international debt issuer requirements Malta is an emerging financial services location with a commitment to develop capital markets EU regulatory framework, both jurisdictions form part of the Eurozone 45

47 EWSM Overview EWSM MFSA Competent Authority Market Supervisor ISE Marketing, Infrastructure & Corporate Services MSE Market Operator Listing Agent & Annotation Services 46

48 Infrastructure Market Operator & Compliance - MSE Administration, finance and company secretarial - ISE IT market services (announcements, listing and website management) - ISE Marketing and promotion - ISE Corporate knowledge of ISE will be at EWSM’s disposal 47

49 Listing Process - Overview EWSM MFSA as Listing Authority [dedicated Listing Committee] Listing Agent Arranger/ Law Firm [may act as Listing Agent] Issuer 48

50 Process – Efficiency and Expertise The EWSM has established Guidelines for Listing and Trading on the EWSM [www.ewsm.eu]. All regulatory requirements of the MFSA and EWSM are presented in one user friendly document. The MFSA approves prospectuses for securities to be admitted to the EWSM under the Prospectus Directive. As Listing Authority, under the Consolidated Admissions and Reporting Directive [CARD], the MFSA approves the admissibility of securities to listing as well as the ongoing requirements of issuers under the Transparency Directive. The MFSA adopts a pragmatic market oriented proactive approach to prospectus review and approval including guaranteed review times of 3 business days for initial submission and 2 business days for subsequent drafts of prospectuses. 49

51 Listing Agent The appointment of a Listing Agent is a key element of the admission process as the Listing Agent ensures smooth and timely interaction between issuers and arrangers and the MFSA and EWSM on regulatory requirements. The Listing Agent reviews the prospectus and other documentation for compliance with the EWSM Guidelines prior to submission 50

52 Listing Agent A Listing Agent approved by the Listing Authority shall be a body corporate, partnership or firm incorporated or established in the EEA (i.e. either in an EU Member State or an EEA State) and be independent of any Issuer, or related service provider, to which it provides listing agent services. have extensive experience in reviewing and preparing listing applications and Prospectuses for debt Issuers and in advising Issuers on the application of the Listing Rules and have adequate resources to fulfil the role expected of a Listing Agent under the Listing Rules; Currently only one Listing Agent – ISE Listing Services [ISELS] has been approved by the MFSA [www.isels.ie ] 51

53 Niche Markets Insurance Securitisation – Legislation for Incorporated Cell Companies is in place. Each incorporated cell can be an iSPV. Rules are currently being drafted. Debt linked to life settlement policies – policies have already been developed by MFSA in this area. Environmentally driven finance – debt linked to infrastructure for wind and solar energy. Waste to energy finance etc. Intellectual Property based structures Finance for Transportation Projects – Aircraft Finance [Malta has developed legislation for Aircraft Registration, Maintenance etc] Shipping Finance [Malta has the third largest shipping register with arounr 7,000 registered shipping companies]. Project bonds – reflecting the move from loan financing of projects to financing of projects through the capital markets. Traditional forms of finance 52

54 Securitisation Act, 2006 The aim of the Act is to provide a legal framework for domestic and cross-border securitisations to take place in and from Malta.. It provides a comprehensive framework for the conversion of receivables or other assets into securities that can be placed and traded in capital markets Article 2 of the Act defines Securitisation as a transaction or an arrangement whereby a securitisation vehicle, directly or indirectly: Sale transactions: whereby the originator transfers a pool of assets to the securitisation vehicle; Synthetic transactions: whereby the securitisation vehicle assumes the credit risk of the originator through credit derivatives; Loan transactions: whereby the securitisation vehicle grants secured loans or other secured facilities to the originator. 53

55 MFSA Supervisory Developments 54

56 Establishment of a Joint Financial Stability Board with the Central Bank of Malta Establishment of a Joint Financial Stability Board with the Central Bank of Malta Introduction of Registration for Corporate Service Providers Introduction of Registration for Corporate Service Providers Banking Union Banking Union Supervisory Developments

57 1. Establishment of a Conduct of Business Board Proposed Composition – Director General; Proposed Composition – Director General; Director Consumer Complaints; Director Director Consumer Complaints; Director Enforcement; Director of the Relevant Enforcement; Director of the Relevant Supervisory Unit Supervisory Unitor 2. Establishment of Conduct of Business Unit Supervisory Developments – Conduct of Business [options]

58 Enforcement Unit Set up in 2012 Responsible for the enforcement aspects previously carried out by the respective supervisory units’   Reviewing actions and conducting investigations of licence holders suspected of having committed compliance failures, serious misconduct, market abuse, breach of listing rules or any other serious breaches of the law   Investigating persons carrying on financial services activities without having the necessary licence or authorisation   Financial crime issues

59 MFSA Consumer Affairs 58

60 Consumer Affairs Unit Consumer Education Consumer Complaints Support for the Depositor Compensation Scheme, Investor Compensation Scheme and the Protection and Compensation Fund 59

61 Consumer Affairs Unit  Receives and assesses wide range of issues arising from consumer complaints and queries  Handles all forms of consumer complaints with feedback/interaction from regulatory and admin units Member of FIN-NET, the EU’s network for out-of-court financial redress. Contacts with the network beneficial, especially when sharing best practices in resolving common issues arising from complaints Member of FIN-NET, the EU’s network for out-of-court financial redress. Contacts with the network beneficial, especially when sharing best practices in resolving common issues arising from complaints 60

62 Consumer Affairs Unit 61  New web-based Case Management System (CMS) installed 1 Jan  The CMS, developed by MFSA ICT Unit, meets reporting requirements of the European Commission Recommendation C(2010)3201 on harmonised methodology of consumer complaints reporting (issued 12 May 2010). The legacy CMS software is still in use in regard to those cases received until end  New system enables Unit to provide better reporting, especially in regard to phone calls received by the Unit.  Fully integrated with online complaints system available on mymoneybox portal.

63  Weekly participation in TV and radio programmes.  Financial services consumer education portal:  Each month new topics being added/updated. Pages are also being translated into Maltese.  Monthly e-newsletter “My Money Box” + Facebook presence  New insurance comparative tables Consumer Complaints Unit Consumer Education 62

64 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) Inter. Association of Insurance Supervisors (IAIS) Inter. Association of Insurance Supervisors (IAIS) Inter. Organization of Securities Commissions (IOSCO) Inter. Organization of Securities Commissions (IOSCO) Inter. Organisation of Pensions Supervisors (IOPS) Inter. Organisation of Pensions Supervisors (IOPS) 63

65 Memoranda of Understanding currently in force 27 MoU’s in 23 countries & 2 Letter Agreements Covering Banking, Insurance, Securities, Trusts, Pension funds, exchange of information, etc New MOU with Qatar Financial Centre & Regulatory Authority, State of Nebraska, National Bank of Slovakia Bilateral MoU’s and Agreements with Foreign Regulators Office of Fair Competition – exchange of information & assistance CBM – exchange of information and payment and securities settlement systems, Joint Financial Stability Board Bilateral MoU’s – Local Authorities MOF/CBM – co-operation in financial crisis NSAs/EU Central Banks & EU Finance Ministers on financial stability EIOPA – Insurance and Occupational Pensions ESM & IOSCO – Securities IAIS - Insurance Multilateral MoU’s & Protocols 64

66 Strategic Plan

67 MFSA Mission Statement Opportune to remind staff on the MFSA Mission Statement:- “Ensure high standards of conduct and management in financial services and promote the legitimate expectations of consumers.” 66

68 MFSA’s Strategic Plan   Enable innovation through Legislative and Regulatory Development   Review of existing Legislation and Regulation   Continuous training at staff and Industry level   Develop strategic partnerships with other regulatory Authorities   Maintain Malta’s reputation as a leading financial services jurisdiction

69 2002/3: IMF/World Bank Review-FSAP 2005: Internal Audit 2007: Internal Audit 2010: Independent Assessment 2011: Governance of Supervision 2012: Internal Audit - Risk Management Ongoing Art IV consultation with the IMF Currently a review of the financial swector under the EU Alert Mechanism is taking place 68 Assessment of the MFSA

70 Number of Employees 69

71 Staff Economists, Mathematicians, Accountants & Statisticians 23% Lawyers 12% Banking & Finance 16% Other Professions 25% Staff having diploma 14% Clerical and others 10% Total MFSA employees Approx. 210

72 Malta and the EU Creating a finance centre -Results 71

73 Licenses Issued – CISs PIFs UCITS Non- UCITS Private00100 Total

74 Investment Services Licences 73 Dec-08Dec-09Dec-10Dec-11Dec-12 Investment Services Recognised Fund Administrators Total

75 Licensed Insurance Companies 74 Dec-08Dec-09Dec-10Dec-11Dec-12 Non Life Life88887 Composite33222 Reinsurance44777 Total of which Domestic origin Insurers Affiliated Insurers PCCs 3 (10 cells) 3 (12 cells) 4 (13 cells) 8 (15 cells) 8 (18 cells) Foreign Insurers22211

76 Insurance Intermediary Licences 75 Dec-08Dec-09Dec-10Dec-11Dec-12 Registered Insurance Brokers Enrolled Insurance Brokers Registered Insurance Agents Enrolled Insurance Agents Registered Insurance Mgrs Enrolled Insurance Managers Tied Insurance Intermediaries

77 Credit and Financial Institutions 76 Dec-08Dec-09Dec-10Dec-11Dec-12 Credit Institutions Financial Institutions of which: Payment Institutions Electronic Money Institutions00014

78 Trust and Trustees Authorisations 77 Dec-08Dec-09Dec-10Dec-11Dec-12 Nominees Trusts Registered - Trust Act, Authorised Trustees - Trusts and Trustees Act

79 Retirement Schemes 78 Retirement Schemes Dec-08Dec-09Dec-10Dec-11Dec-12 Asset Managers--333 Retirement Scheme Administrators Retirement Schemes

80 Registered Companies 79 Dec-08Dec-09Dec-10Dec-11Dec-12 New registrations 2,818 2,678 3,130 3,4584,016 Companies on the register 45,975 48,520 51,650 55,15059,098

81 ECB Press Release on Growth of MFIs in 2012 Finland -8.2 France -9.2 Greece -5.1 Hungary 0 Ireland -2.9 Italy -7.0 Latvia 0 Lithuania 1.1 Luxembourg Austria Belgium Bulgaria Cyprus Czech Rep Germany Denmark Estonia Spain Malta Netherlands Poland Portugal Rumania Sweden Slovenia Slovakia United Kingdom Malta Bucks the Trend – Investment Adviser

82 Malta and the EU Taxation 81

83 Taxation Malta follows an imputation system of taxation established in The system was agreed with the EU under State Aid and Code of Conduct for Business Taxation in Under the system all companies pay tax at 35% of which 6/7 is imputed to shareholders on declaration of a dividend. Shareholders of holding companies get 7/7 refund and shareholders of companies receiving royalty income get 5/7 refund. In a number of countries, the refund in retaxed separately from the investment income under CFC legislation. Anti-abuse and exchange of information mechanisms in place OECD/G20 classifications of tax havens place Malta on the “white list” 82

84 Securitisation Vehicles: Tax Neutral A securitisation vehicle enjoys tax neutral status thereby optimising the investors’ return and the originator’s cost of funding. Although, as a rule, securitisation vehicles are liable to tax in Malta at 35%, substantial deductions are available which effectively eliminate any taxable income in Malta. Specifically enacted tax rules clarify that the following deductions may always be availed of by a securitisation vehicle: Cost of acquisition: Expenses payable to the originator for the acquisition of securitisation assets or the assumption of risk; Finance expenses: Premiums, interest or discounts relating to financial instruments issued, or funds borrowed, to finance the acquisition of securitisation assets or the assumption of risks; Operating expenses: Costs incurred in the day-to-day administration of the securitisation vehicle and the management of the securitisation assets, including the collection of any relevant claims. 83

85 EWSM Listings - Taxation The EWSM was on 18 th January 2013 granted “Recognised Stock Exchange” within the meaning of the UK Income Tax Act, As such, the Quoted Eurobond Exemption applies for investors. Non-resident investors do not suffer any tax in Malta. 84

86 Malta Double Tax Treaties EU Countries Other European Countries Rest of the World Austria Belgium Bulgaria Cyprus Czech Rep. Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Albania Croatia Georgia Iceland Isle of Man Jersey Montenegro Norway San Marino Serbia Switzerland Australia Bahrain Barbados Canada China Egypt Hong Kong India Jordan Korea (Rep.) Kuwait Lebanon Libya Malaysia Morocco Pakistan Qatar Saudi Arabia Singapore South Africa Syria Tunisia United Arab Emirates United States Uruguay 85

87 Malta Double Tax Treaties Belgium (Protocol) Guernsey Israel Luxembourg (Protocol) Mexico Norway (new treaty) Russia (being renegotiated) Singapore (Protocol) South Africa (Protocol) Turkey Armenia Azerbaijan Bosnia and Herzegovina India (new treaty) Moldova Oman Russia (new treaty) Thailand Ukraine Double tax agreements: signed but not yet in force; initialled/being negotiated Signed but not yet In force Awaiting Signature or Under Negotiation 86

88 Malta and the EU Creating a finance centre – Ancillary Services 87

89 Proposition Malta as an emerging financial services location has proved to be successful in the various financial services sectors with responsive communication from the Regulator The World Economic Forum Competitiveness Report [ ] places Malta: th for Financial Market Development [LU 12 th ; IE 108 th ] th for the Regulation of Stock Exchanges [LU 4 th ; IE 76 th ] th for the Soundness of the Banks [LU 18 th ; IE 144 th ] out of a total of 144 countries. 88

90 Critical Success Factors Well educated/competitive cost pool of labour Inexpensive and modern office developments with capacity Good telecommunications & IT infrastructure Very competitive tax regime Flexible legal and regulatory environment Well trained Professionals Multilingual community Comprehensive Double Tax Treaty network 89

91 Legal Services Malta is a civil law jurisdiction – company law is based on English law principles. Interpretation of English text prevails Legal framework is therefore flexible, versatile and able to relate to different legal systems. Legal community is well established with many practitioners obtaining further training overseas and most firms form part of international legal networks. 90

92 Accounting Services Accounting Services IFRS – International Accounting Standards applicable since 1997 Major international accountancy firms BDO, Deloitte & Touche, Ernst & Young, Grant Thornton, KPMG, PKF, PricewaterhouseCoopers, Mazars, Ecovis and others operate in Malta The World Economic Forum Competitiveness Report [ ] places Malta:16 th in Strength of Reporting and Auditing Standards [Luxembourg 15 th and Ireland 66 th ] out of 144 countries 91

93 Conclusion Business environment: product-driven jurisdiction, established banking, insurance and funds industry, sharp growth in financial intermediation services, easy access to decision makers, ability to adapt fast to changing circumstances. Cost structures: cost of human resource, expertise, quality; productivity levels, taxation Strategic factors: language, geography, culture, international perception Infrastructure: communications and IT, regulation, training structures, tax treaties 92

94 Malta and the EU Conclusions 93

95 Our Thinking We must not think that we are living in some kind of glass structure 94

96 “ Under the Spotlight We are being watched: ………there is too much talking going on outside the MFSA

97 . Thank you! 96


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