ARTICLE
29 January 2024

MFSA Circular On The Newly Published Accountancy Profession Regulations, 2023 (Legal Notice 299 Of 2023)

FM
Finance Malta

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Finance Malta is a non-profit public-private initiative set up to promote Malta as an international financial centre, both within, as well as outside Malta. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory, and fiscal framework in which the financial services sector can continue to grow and prosper. The Board of Governors, together with the founding associations: The Malta Funds Asset Servicing Association, the Malta Bankers Association, the Malta Insurance Association, the Association of Insurance Brokers, the Malta Insurance Managers Association, the Institute of Financial Services Practitioners; its members and staff are all committed to promote Malta as an innovative international.
In the 2022 Annual Report of the Malta Financial Services Authority ("MFSA"), the Authority referred to the discussions which were being held with the Malta Insurance Management Association...
Malta Finance and Banking

In the 2022 Annual Report of the Malta Financial Services Authority ("MFSA"), the Authority referred to the discussions which were being held with the Malta Insurance Management Association and the Malta Institute of Accountants in preparation for IFRS 17 and in particular the possibility of exempting categories of (re)insurance undertakings.

The said discussions came to fruition and the Minister of Finance, on the recommendation of the Accountancy Board, enacted the Accountancy Profession (General Accounting Principles in respect of certain Eligible Entities) Regulations, 2023 (Legal Notice 299 of 2023) ("GAPEE"). The MFSA announced this development in its circular issued on the 22nd of December 2023.

The GAPEE will enable 'eligible entities', as defined in the regulations to opt out of IFRS 17 and in lieu apply the general accounting principles set out in the schedule to the Regulations.

The "eligible entities" are:

  • captive (re)insurance undertakings;
  • Solvency II Directive exempted insurance undertakings;
  • specialised run-off undertakings;
  • ancillary (re)insurance undertakings;
  • protected cell companies (where core, if it carries on (re)insurance activities, and all the cells qualify as an eligible entity);
  • cessation undertakings;
  • redomiciled undertakings;
  • insurance and/or reinsurance parent undertakings.

Listed entities whose securities are traded on a regulated market and public interest entities (other than "eligible entities") may not opt-in.

The GAPEE shall apply for financial reporting periods commencing on or after 1st of January 2023.

As a result of the publication of GAPEE, the MFSA made amendments to Chapter 8 of the Insurance Rules issued under the Insurance Business Act. In its said circular, MFSA further explained that undertakings falling under the definition of 'eligible entities' and which elect to adopt GAPEE shall continue to submit the Quarterly National Specific Templates and Annual National Specific Templates found in Annex II – Annual National Specific Templates (IFRS 4 & GAPEE) and Annex III – Quarterly National Specific Templates (IFRS 4 & GAPEE) to Chapter 8 of the Insurance Rules issued under the Insurance Business Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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