Most of the speakers at the annual Finance Malta conference highlighted the innovative and proactive role of the MFSA in making Malta a “jurisdiction of choice” – except for one who said the island ranked a poor 71st as a financial services centre.

Bryane Michael, from the University of Oxford and Hong Kong University, said a study of international finance centres (IFCs) look­ed at 800 regulatory provisions objectively, and Malta fared “alongside Bulgaria”. London and New York top the so-called ‘power score’, with Hong Kong and Singapore next. He told The Sunday Times of Malta that there was a huge divergence between the scores of the EU member states.

“What can Malta do to get into the top 10? Clearly it needs better regulation but the change needs to be driven by corporates, not by the regulator,” he said.

“They need to study the situation, starting with what the customer wants and then work backwards to see how to provide it. This is the mindset of top IFCs. Firms need to get involved in regu­lation as this is what will drive core competency development in productive areas.”

MFSA chairman Joe Bannister did not comment about Mr Michael’s findings, rather dedicating his speech to a number of innovations made by the regulator, pointing out that Malta was the only jurisdiction to merge cell structures with securitisation, which was generating considerable interest. He also pointed out that although the MFSA had initially resisted loan funds, these were now allowed – subjected to very detailed rules to mitigate risk – and the market was reacting very favourably, with the first loan fund licensed and more in the pipeline.

Finance Malta dedicated this annual appointment with hundreds of practitioners to the theme of Building on Success, Reaching New Horizons.

The themes tackled by the speakers and the workshops were deliberately chosen to stimulate debate on areas that Finance Malta believes are being underestimated, such as Islamic finance and international pensions.

Islamic finance controls assets in excess of $1.5 trillion. The MFSA has comprehensive guidelines, and the regulatory framework already supports the changes that would be required to taxation and legislation, law­yer David Zahra said.

The CEO of Dar Al Sharia, Sohail Zubairi, said that he had seen interest growing in Malta over the five years that he had been coming here to promote Islamic finance – and that it now appeared that there was political will “so something should be happening soon”.

He warned that other countries – such as Tunisia and Turkey – were moving fast, but he was very enthusiastic about the potential for Malta, since Islamic banks in the Gulf could use Malta as a base to passport to the EU.

Another area that is showing considerable growth is pensions, although Malta still only attracts a fraction of the total market – $30 trillion in the OECD alone.

“Malta could do a lot more as if it attracts a multinational company – which could have all its various pension funds centred in one jurisdiction – it could also attract complementary services, like human resources and payroll, life and medical insurance and so on,” Bethel Codrington, the chairman of the Malta Association of Retirement Scheme Practitioners said.

Malta has enacted legislation to allow institutions providing occupational pensions, and has al­ready got one licensed, but the real growth is coming from the UK, where frequent legislative changes are prompting people to place their pensions overseas, seeking more certainty.

“Malta only came into this market five years ago but it is already the jurisdiction of choice,” he said. “And with British pensions – QROPS – even though other jurisdictions have similar plans, the regulation here is very competitive and offers protection that other member states do not.”

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