Malta has featured in two leading financial publications throughout the month of March, increasing the visibility of the both the jurisdiction as a whole, as well as that of its financial regulator, the MFSA.
Malta features prominently in Captive Review's 2014 Edition of ILS Review, a world-wide publication dwelling on insurance-related security. This year's journal, featured an in-depth review of the Maltese jurisdiction claiming that "Malta has gained a reputation for a robust regime (without being unduly prescriptive) with a highly approachable regulatory authority". The ILS states that "it has been internationally recognised that the Maltese regulations provide a secure and stable framework for prudential supervision, consumer protection, market surveillance and prevention of money laundering".
Focusing on the MFSA, it notes that "the Authority has created a one-stop-shop for the development of the financial services sector and now intends to do the same for the capital markets. Besides the possibility of setting up an efficient securitisation vehicle, Malta is now offering the possibility for the listing of wholesale securities issued by the securities vehicles." The full document can be downloaded from http://goo.gl/Ys1yP1.
Malta has also featured in the March 2014 edition of Captive Review, through an interview with MFSA Chairman Profs Joe Bannister. Questioned on the biggest regulatory burdens for captives in Malta, Bannister argued that captives in Malta face the same burdens as any captive in any other EU member state and also in other non-EU jurisdictions that decided to introduce the equivalence requirements under Solvency II.
"Broadly speaking issues commonly raised by captives and their managers in relation to the Solvency II regime have focused on the solvency capital requirement (Pillar I) and the additional financial strain this may place on captives. Governance requirements (Pillar II ) have however also been similarly flagged by captives as adding to the regulatory burden - under the Solvency II regime captives (in like manner with insurance and reinsurance companies ) are being asked to demonstrate stronger governance and risk management structures.
Captives continue to discuss the proper understanding and application of the proportionality principle - which factors in the nature, scale and complexity of the operation - and underlies Solvency II requirements for captives and re/insurance companies alike."
Asked to explain how these burdens are being overcome, the MFSA Chairman explained that managers and regulators/supervisors are working together to ensure a smooth transition to the new regime. "This is being done through the organisation of workshops for the Industry by the regulator, discussions with captive management associations and by one-to-one meetings with companies on ad hoc issues. Compliance visits are also being tailored to assess the level of preparedness of companies for Solvency II and to help identify and overcome challenges faced by captives and their managers."
Close interaction with the regulator means that problems can be identified at an early stage and solved quickly. Captive managers are instrumental in assisting captives to prepare to adopt Solvency II standards, particularly on the governance and risk management levels - captives are encouraged to prepare for change through critical self-examination with a view to developing their internal governance in line with best practice. "Indeed, we see captives having robust governance frameworks already in place and on a going forward basis working to fully align them with Solvency II requirements to ensure that these can be objectively verified as functioning", concluded Bannister.
Source: Capture ILS Report 2014 - Full article is available on http://goo.gl/KHXRzT.
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