The past 20 years have seen the financial services grow into becoming one of the most important contributors to Malta’s economic growth. It was built through a commitment to excellence and cemented through a strong sense of political consensus.
Currently it employs around 10,000 employees and contributes to more than 12 per cent to Malta’s GDP. Further growth is expected for the coming years. Critical to this success is the Malta Financial Services Authority, the regulator for financial services in Malta established by law back in 2002.
We’re talking about 16 years during which our financial services managed to gain a highly respected reputation as one of the most business-friendly and stable jurisdictions on a global level. During the years, this excellent reputation played a vital role in helping shape Malta as an international financial services centre attracting international financial services firms and creating specialised employment opportunity.
The financial sector is highly dynamic. In view of this, its regulatory body must continue to evolve. One of my first initiatives after taking political responsibility for financial services was the launching of a consultation process that wasaimed at seeking the views of all stakeholders, including the industry, on how the MFSA can be rendered more responsive while fully safeguarding its strong regulator mandate.
From the good response given, it was evident that operators are aware that efficiency and timely action are crucial for future success.
The line that once divided technology and financial services is becoming increasingly blurred. Innovation is the way forward
Today’s financial sector is different from that of 10 years ago. Financial services providers are now faced with few products and subjected to new technology. The line that once divided technology and financial services is becoming increasingly blurred. Innovation is the way forward to sustain our financial services.
Fintech is playing a central role in the provision of financial services. We’re not happy by just being part of it, we want to lead it.
Thus, in view of this it is necessary to continue making changes to achieve further success in this sector.
In fact, at the end of last year the MiFID II directive was transposed. It was a transposition that brought about law amendments leading to more confidence in financial markets, the services sector, improvement in market functions and increased transparency.
By means of MiFID II, authorities and regulators are now in a position to provide better protection for consumers and to the investors by tighter controls and further obligations to ensure checks and balances are in place. A law that strengthened the regulatory authorities ensuring that the services operators are abiding by the law.
Moreover, right at the beginning of the year new regulations came into force with regards to the European Union’s fourth anti-money-laundering directive, a directive which obliges companies to give further details such as disclosing their beneficial or true owners which will be available in a public register, necessary tool for our national authorities responsible for combating money laundering.
Besides the transposition of this directive means also the setting up of a committee made up of representatives from ministries, entities and authorities, including the MFSA, to coordinate the development of a national strategy to combat money-laundering and the funding of terrorism.
Thus, up to date, we have seen the MFSA adapting to the continuous changes the financial services are going through. Just recently, I welcomed the publication of rules regulating collective investment schemes by the MFSA making Malta the first EU jurisdiction to issue such framework.
The upcoming amendments of the MFSA Act will further strengthen the authority. Our aim is that our regulatory body will be reactive enough to address new emergent situations. We want a vigilant MFSA that will ensure that any new niches do not endanger the long-term stability. We want an MFSA that takes a leading role in engaging with the industry with the aim of developing the required capabilities, capacity and regulatory frameworks into new areas of business.
The motion just presented in Parliament is just the first step in a journey that will put our financial services ahead of their time. I look forward to the debate that follows. Above all, I look forward to the renewal of the consensus, a consensus that served up well in the past and will do the same in the future.
Silvio Schembri is Parliamentary Secretary for Financial Services, Digital Economy and Innovation.