MFSA Newsletter

The World Economic Forum has published its Global Competitiveness Report for 2009/10. The report has as its backdrop the global economic crisis which has impacted on every economic sector worldwide.

This year's report ranks the performance of 133 countries, providing a detailed profile for each country together with global rankings covering over 100 indicators. The report has ranked Malta in 52nd place for Global Competitiveness (same as last year) and classifies it with the innovation-driven economies. Malta is also placed with the top 20 countries worldwide in a number of key categories covering financial services.

Commenting on the report, MFSA chairman Joe Bannister says that Malta's high rankings in the finance area are an independent endorsement of Malta's growing status as an efficient and well-managed financial services hub and will continue to strengthen international confidence in Malta.

In the eighth pillar dealing with financial market sophistication, Malta showed a marked improvement, increasing its overall ranking from 18th to 13th. For the second year in a row Malta was ranked as having one of the world's most sound banking sectors, with a ranking of 13th. Canada is again in the top spot with a score of 6.7 and seven countries, including Malta, tie at 6.3.

Malta also comes in at a global 18th for ease of raising money through local share issues and 15th for effectiveness of stock market regulation, just 0.6 points behind Sweden, the top scoring nation in this category. Other significant placings include 12th for the strength of auditing and reporting standards and 20th for ease of bank borrowing.

The fourth and fifth pillars referred to in the report deal with health and education and higher education and training respectively. Malta placed 22nd with regard to the quality of primary education and 21st with regard to the suitability of the Maltese educational system to meet the needs of a competitive economy.

MFSA proposes changes to professional investor fund regime

The MFSA recently issued its feedback statement on the outcome of consultation proceedings related to changes in its investment services rules applicable to professional investor funds targeting experienced investors. The process was initiated on May 21, 2009.

The proposed changes are intended to ensure a minimum level of risk diversification for experienced investor funds, given that (with the exception of the five hedge fund rule for funds of hedge funds) there are currently no prescriptive requirements relating to risk-spreading, with the consequent risk that such funds may be excessively exposed to a single issuer or counterparty.

The consultation document also proposes to reduce the minimum investment threshold in an experienced investor PIF from the current €15,000 to €10,000.

The feedback statement outlines the main issues raised during the consultation period, the MFSA's views on these issues and the proposed updated investment restrictions to be included in the relevant rules. The MFSA will be considering further comments in relation to these changes which are received in writing by September 30, 2009. Subject to any further changes which may be included, the MFSA is envisaging that the revised rules should be published and become operative by not later than January 1, 2010.

Experienced Investor PIFS licensed before this date will have the option to reduce their minimum investment limit to €10,000 subject to compliance with the new proposed revised rules or continue to be subject to the current regulatory requirements.

Forthcoming training events

The Education Consultation Council has published the list of upcoming training programmes together with information relating to the training institutes involved. The industry will have the opportunity to benefit, among others, from courses on insurance and reinsurance, risk management, fund administration, corporate banking, trusts and foundations. Seminars updating the industry on developments concerning specific EU directives such as the Alternative Investment Fund Managers Directive will also be available.

These training programmes qualify for consideration by the MFSA when establishing competence levels of staff employed by its licence holders. The full list, which will be continuously updated, is available from the extended MFSA Newsletter. Anyone interested in subscribing to this newsletter may do so by sending an e-mail to communications@mfsa.com.mt.

Further information including MFSA Consultations; New Licences Issued during August/ September can be accessed from timesofmalta.com. The MFSA is also producing an extended electronic version of its monthly newsletter. This may be downloaded from the Publications section on the MFSA website or requested by e-mail to communications@mfsa.com.mt.

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