Malta meeting of CEBS task force on supervisory disclosure

CEBS Task Force on Supervisory Disclosure (TFSD) currently chaired by Mr Karol Gabarretta, Banking Unit Director at the MFSA, assisted by Mr Matej Pollick from the CEBS Secretariat, held its third meeting of this year in Malta on July 27.

The scope of the meeting was primarily to discuss and agree upon the proposed set of new templates and relative guidelines, and on their population, so as to augment the current CEBS Supervisory Disclosure framework. This common Supervisory Disclosure framework has been implemented since 2007 and is accessible on the Internet, both on CEBS's website and on national websites, including that of the MFSA. At present the common framework includes disclosures on the Capital Requirements Directive (CRD) - the legislative provisions and also the supervisory application of the rules and statistical data on the implementation of the CRD - and disclosures on reporting.

Similar to previous meetings, the Third Meeting was attended by various members from EU regulatory authorities. The next meeting of the TFSD is also expected to be hosted in Malta in November.

Hedgeweek Guide

Malta, together with Ireland, Luxembourg and the BVI, featured in a Special Report published by Hedgeweek at the end of July. The "Guide to setting up Alternative Investment Funds" aims at providing guidance to managers, promoters and their advisers where best to locate their alternative investment funds.

The Guide gives an extensive outline of the Maltese funds industry accompanied with all the technical and regulatory information necessary for the setting up of a fund in Malta. The Report maintains that Malta's regulatory framework is structured to ensure the "highest standards of probity and transparency while allowing operators the freedom to compete and innovate." This setup has gained the country a strong reputation as a funds domicile which "provides competitive access to the European market and beyond" and which will enable it to further its way in the international financial services sector.

The Report also provides some statistical information which is worthy of consideration. At present Malta is host to more than 400 funds including 250 alternative investment funds together with a considerable number of UCITs and retail funds. The fund industry is quite diversified and the authorised funds range from single member funds to funds of funds. The Report also tackles fund servicing and indicates that the funds industry is complemented by a consolidated fund servicing infrastructure. This sound infrastructure together with the choice of quality over quantity is proving to be a key element to attracting more managers and administrators to establish their operations in the island.

The Guide may be downloaded from the Special Reports Section at: www.hedgeweek.com .

The Malta section of the Report was supported by the MFSA.

Job Shadowing Scheme

The MFSA and the Guidance and Counselling Unit within the Education Division have recently concluded a job shadowing pilot programme during which a number of secondary school form four students had the opportunity to experience different work environments within the financial services sector. This initiative was undertaken within the scope of the strategy for promotion of careers within the financial services sector as laid down in the Action Plan recently launched by the MFSA's Education Consultative Council (ECC). This scheme complements the exposure being provided to students at secondary school level during periodic familiarisation visits to the MFSA during their scholastic year.

In recognition of the efforts being undertaken in this regard, 13 industry participants including industry associations, licence holders and financial services practitioners participated in the programme together with the MFSA. These were HSBC Bank Malta plc, Middlesea Insurance plc, First United Insurance Brokers Ltd, KPMG, Deloitte, Jatco Insurance Brokers Ltd, Elmo Insurance Ltd, Global Capital plc, Malta Insurance Association, GasanMamo Insurance Ltd, Atlas Insurance PCC Ltd, Mediterranean Insurance Brokers (Malta) Ltd and Risk Insurance Brokers Ltd.

The Scheme provided 50 students from Government, independent and church schools with the opportunity of observing a number of jobs both of a technical and administrative nature that are typical within the sector. In turn, they were requested to log down their observations and exchange views both with their mentors and with the school counsellors that were monitoring them during the programme. The job shadowing placements did not carry any remuneration and were subject to all the rules and policies that were applied by the participating entities.

Following their placements, students were awarded a certificate issued jointly by the ECC and the Guidance and Counselling Unit on completion of the programme. The awarding ceremony took place during a meeting held on July 15 and was attended by the participating students, their parents and also representatives from the financial sector involved. The meeting presided by Prof Charles J Farrugia, Chairman of the ECC and by Mr Stanley Zammit, Service Manager at the Psychosocial Services Unit at the Education Division constituted an excellent opportunity for all parties concerned to share experiences and to put suggestions for the enhancement of future programmes of a similar nature.

FERMA Risk Management Forum 2009 - Prague - October 4-7

The Malta Insurance Management Association (MIMA), FinanceMalta and MFSA will be organising a networking Stand at this year's FERMA Conference: "Global Village: The Future of Risk Management" being held at the Prague Congress Centre, Prague, Czech Republic, from October 4 to 7.

This year's conference will address the increasingly complex issues facing risk managers at the moment. The FERMA Risk Management Forum is the major European Conference for risk managers held once every two years. The event may also be of interest also to insurance managers, professionals and other practitioners in the captive insurance industry.

FERMA - The Federation of European Risk Management Associations brings together the national Risk Management Associations of 16 countries. It has a collective membership of over 4800 individual members representing major industrial and commercial companies in their respective countries. Further information is available from www.ferma-forum.eu

Consultations underway

(i) EU Consultations

The European Commission is currently consulting on responsible lending and borrowing and on the final report of the Expert Group on Credit Histories. The following are the links to the two consultations:

(i) Consultation on responsible lending and borrowing (information available at: http://ec.europa.eu/internal_market/finservices-retail/credit/responsible_lending_en.htm) . The EU has launched this consultation in an attempt to tackle credit market risks that were at the the root of the current financial crisis. The consultation covers, amongst other things, the advertising and marketing of credit products, the pre-contractual information provided, ways to assess product suitability and borrower creditworthiness, advice standards, responsible borrowing and issues relating to the framework for credit intermediaries (e.g. disclosure, registration, licensing and supervision).

(ii) Consultation on the final report of the Expert Group on Credit Histories (information available at: http://ec.europa.eu/internal_market/finservices-retail/credit/history_en.htm ).

Interested parties are invited to send their comments to the Commission by 31 August 2009 (instructions on the Consultations website at http://ec.europa.eu/internal_market/consultations/index_en.htm ).

A public hearing on responsible lending and borrowing will be held in Brussels on September 3 to discuss with stakeholders the most appropriate policy responses to the challenges faced by borrowers and the financial services industry, and to draw together the main conclusions from the consultation. A draft agenda is available at: http://ec.europa.eu/internal_market/finservices-retail/credit/responsible_lending_en.htm .

(ii) CESR Consultations

CESR is currently consulting on Level II implementing measures related to the UCITS Management Company Passport.

This consultation paper sets out CESR's draft advice on the following areas: (i) Organisational requirements and conflicts of interest; (ii) Rules of conduct; (iii) Measures to be taken by a depositary of a UCITS managed by a management companies (iv) Risk Management; and (v) Supervisory co-operation.

The deadline for contributions is September 10.

CESR is consulting on Technical Advice at Level II on the format and content of Key Information Document disclosures for UCITS

This consultation paper sets out CESR's draft advice on the following areas: (i) Format and presentation; (ii) Objectives and investment policy; (iii) risk and reward; (iv) Charges; (v) Performance presentation; (vi) Practical information; (vii) Circumstances in which the KID should be revised (viii) Special Cases - how the KID might be adapted for particular fund structures; and (ix) Costs and benefits.

The deadline for contributions is September 10.

All contributions should be submitted online via CESR's website under the heading ‘Consultations' at www.cesr.eu. All contributions received will be published following the close of the consultation, unless the respondent requests their submission to be confidential.

CESR is also consulting on an addendum to its consultation document on the format and content of Key Information Document disclosures for UCITS (Ref.: CESR/09-552)

This addendum complements consultation paper CESR/09-552 by including an explanation of CESR's proposals on (i) the definition of upper and lower bounds for the volatility intervals ('buckets') and (ii) the detailed explanation of the risk classification process for structured funds. Stakeholders are advised to take into account the information contained in this addendum, together with the consultation paper (Ref. CESR/09-552), when providing their views on the synthetic risk and reward indicator.

The deadline for contributions is September 10.

All contributions should be submitted online via CESR's website under the heading ‘Consultations' at www.cesr.eu. All contributions received will be published following the close of the consultation, unless the respondent requests their submission to be confidential.

(iii) CEIOPS Consultations

CEIOPS is currently consulting on the second set of consultation papers on Solvency II Level 2 Implementing measures. The Consultation Papers are available on the CEIOPS website www.ceiops.eu - Consultation Papers (Vide 2009 Consultation Papers - Open for comments). CEIOPS invites stakeholders to send their contributions, by September 11, via e-mail, in English to secretariat@ceiops.eu, using exclusively the templates for comments made available by CEIOPS.

(iv) European Payments Council

The European Payments Council (EPC) has launched a public consultation on possible modifications to be introduced into the three November 2010 SEPA Scheme Rulebook releases. The consultation is expected to run until next September 15. The consultation documents namely (i) SEPA Credit Transfer Scheme; (ii) SEPA Core Direct Debit Scheme and (iii) SEPA Business-to-Business Direct Debit Scheme together with their respective response templates are available for download from http://www.europeanpaymentscouncil.eu/news_detail.cfm?news_id=78 .

International News European Commission Guidelines on restructuring to banks On 23rd July 2009, the European Commission announced the publication of a Communication entitled "The return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules". The approach adopted is based on three fundamental principles namely:

i) aided banks must be made viable in the long term without further state support,

ii) aided banks and their owners must carry a fair burden of the restructuring costs and

iii) measures must be taken to limit distortions of competition in the Single Market. These guidelines will remain in force until December 31, 2010. They aim at explaining how the Commission will be applying the abovementioned principles in the context of the current systemic financial crisis, with a view to contributing to the return to viability of the European banking sector. According to Competition Commissioner Neelie Kroes, these guidelines "will be a useful tool for banks and Member States by explaining the criteria the Commission will apply to restructuring aid for banks in the current period." The full Communication can be downloaded from the Commission's website. Assessment of securities settlement systems and their links The Eurosystem, which include the European Central Bank (ECB) and the 16 national central banks of the euro area, has carried out a wide-ranging assessment of all securities settlement systems (SSSs) and the links currently used for the collateralisation of Eurosystem credit operations. This assessment was made on the basis of the "Standards for the use of EU securities settlement systems in ESCB credit operations", published in 1998. The exercise carried out has confirmed the high level of compliance of the SSSs tested and of their direct and relayed links. Furthermore, where necessary the SSSs have kept up their efforts to further enhance compliance. All the information relating to this assessment and to the list of eligible SSSs is available on the ECB's website.

Warnings to Investors

Over the past month the MFSA has received and circulated a number of warnings to investors issued by overseas regulators. Full releases can be accessed from the Warnings for Investors section in the MFSA website: (www.mfsa.com.mt).

New Licences issued in July/ August

i Collective Investment Scheme Licences

CIS licence issued to Meridon Funds SICAV in respect of 1 sub-fund. The fund is a Professional Investor Fund targeting Qualifying Investors.

CIS licence issued to 21st Century Investments SICAV in respect of 1 sub-fund. The fund is a Professional Investor Fund targeting Experienced Investors.

Surrender of Collective Investment Scheme licence

Surrender of CIS licence by HSBC Structured Fund SICAV plc in respect of its 3 sub-funds.

ii Investment Services

Category 2 IS licence issued to Re-Invest Partners Limited.

Category 1 IS licence issued to Integradvisory Limited.

Surrender of Investment Services Licence

Surrender of Category 2 IS licence by Benchmark Advisory Limited.

iii Administrator Certificate

Surrender of Administrator Certificate

Surrender of administrator certificate in respect of Benchmark Advisory Limited.

iv Trust & Trustees

Licence issued to 3a Fiduciary Services Limited to provide fiduciary services which do not include acting as trustees.

MFSA web site: http://www.mfsa.com.mt

Registry web site: http://registry.mfsa.com.mt

Consumer web site: http://www.mfsa.com.mt/consumer