MFSA identifies capacity breaking point
The Malta Financial Services Authority has established that it can grow from its current workforce of 140 to around 200, given its present physical and financial resources, enabling it to keep up with the demands placed on it as a regulator of the...
The Malta Financial Services Authority has established that it can grow from its current workforce of 140 to around 200, given its present physical and financial resources, enabling it to keep up with the demands placed on it as a regulator of the rapidly growing financial services sector.
However, MFSA chairman Joe Bannister said that he has extrapolated growth to establish the date at which demand for its services may exceed its resources - adding that he was not willing to reveal when this date is.
Speaking at a KPMG conference on the financial services industry in Malta on Tuesday, Prof. Bannister said that the MFSA had managed to grow from a workforce of over 60 to its current level without raising fees, some of which were admittedly too low. He pointed out that the current fees are in force until 2008.
The MFSA had seen certain trends developing over the years, many of which were in line with its recently enunciated strategic vision, especially that of moving away from portraying Malta merely as a tax-based jurisdiction.
"Doing this will merely put us in the limelight and raise the ire of other jurisdictions," he said.
"We should stress other aspects of our competitive advantage, such as the robust regulatory environment and the skilled resources available."
This point was also raised by KPMG partner Pierre Portelli, who warned that there were efforts underway to harmonise tax across the EU.
"Don't underestimate the power behind such initiatives," Mr Portelli warned.
In the meantime, salaries in Malta are still a third to a half of the average in the EU. Prof. Bannister said that although these were bound to rise, it was important for Malta to remain competitive.
He also indicated some areas for potential growth, noting that there are now over 100 hedge funds domiciled in Malta but few of them use local banking services. There are nine banks doing business locally, 14 financial institutions and 19 credit institutions.
Insurance is also growing - and Prof. Bannister pinpointed the fact that there were now 10 insurance managers, opening the potential for more captive insurance work.
In fact, the insurance market has changed considerably over the years. In 2004, there was negligible general business for risk outside Malta but over the years risk within Malta has levelled off, being overtaken considerably by risks outside Malta, which now amount to over €250 million worth of business.
(Further reports on the conference will be carried next week.)
Key facts:
Financial services
• A total of 527 new companies were registered in the first quarter of 2007, compared to 2,979 for the whole of last year.
• The number of retail funds registered here has remained stable at around 50 but the number of UCITS has grown by about 20 per cent, while the number of Private Investor Funds dropped slightly in the first quarter of 2007 but remained high at just under 90.
• The total net asset of Malta domiciled collective investment schemes broke through the €5,000 million ceiling earlier this year, with private investor funds making up over €3,000 million of them.
• A total of 70 trustees were registered in 2006, up from 57 the previous year.
However, MFSA chairman Joe Bannister said that he has extrapolated growth to establish the date at which demand for its services may exceed its resources - adding that he was not willing to reveal when this date is.
Speaking at a KPMG conference on the financial services industry in Malta on Tuesday, Prof. Bannister said that the MFSA had managed to grow from a workforce of over 60 to its current level without raising fees, some of which were admittedly too low. He pointed out that the current fees are in force until 2008.
The MFSA had seen certain trends developing over the years, many of which were in line with its recently enunciated strategic vision, especially that of moving away from portraying Malta merely as a tax-based jurisdiction.
"Doing this will merely put us in the limelight and raise the ire of other jurisdictions," he said.
"We should stress other aspects of our competitive advantage, such as the robust regulatory environment and the skilled resources available."
This point was also raised by KPMG partner Pierre Portelli, who warned that there were efforts underway to harmonise tax across the EU.
"Don't underestimate the power behind such initiatives," Mr Portelli warned.
In the meantime, salaries in Malta are still a third to a half of the average in the EU. Prof. Bannister said that although these were bound to rise, it was important for Malta to remain competitive.
He also indicated some areas for potential growth, noting that there are now over 100 hedge funds domiciled in Malta but few of them use local banking services. There are nine banks doing business locally, 14 financial institutions and 19 credit institutions.
Insurance is also growing - and Prof. Bannister pinpointed the fact that there were now 10 insurance managers, opening the potential for more captive insurance work.
In fact, the insurance market has changed considerably over the years. In 2004, there was negligible general business for risk outside Malta but over the years risk within Malta has levelled off, being overtaken considerably by risks outside Malta, which now amount to over €250 million worth of business.
(Further reports on the conference will be carried next week.)
Key facts:
Financial services
• A total of 527 new companies were registered in the first quarter of 2007, compared to 2,979 for the whole of last year.
• The number of retail funds registered here has remained stable at around 50 but the number of UCITS has grown by about 20 per cent, while the number of Private Investor Funds dropped slightly in the first quarter of 2007 but remained high at just under 90.
• The total net asset of Malta domiciled collective investment schemes broke through the €5,000 million ceiling earlier this year, with private investor funds making up over €3,000 million of them.
• A total of 70 trustees were registered in 2006, up from 57 the previous year.