Establishing a Financial Institution in Malta

In reaching an authorisation decision, the Malta Financial Services Authority (“MFSA”) will delve into various aspects of the Applicant, inter alia, its

(i) profile, which focuses on the Applicant’s ownership and group structure, regulatory history and significant events; and

(ii) activity and method of operations including proposed activity, the business strategy and model, governance arrangements and other various areas of focus relevant to the MFSA.

The process for all authorisations is outlined briefly below (timelines are reflective for Credit and Financial institutions):

• Applicants are required to submit a Statement of Intent (which is a high-level presentation highlighting, inter alia, the applicant’s contact details, proposed organisational structure, type of authorisation required, and business model) to the MFSA.
• The MFSA may request the prospective applicant to provide additional information and to attend a preliminary meeting.
• The MFSA provides its no objection to the prospective applicant to submit their application.

• Preparation and submission of the application form and applicable documents.
• Payment of the application fee.
• Completions checks by the MFSA.
• Quality review carried out by the MFSA on the application and feedback provided by the MFSA.
• Completion of the documentation to the satisfaction of the MFSA.

• Application is finalised internally and submitted to the decision-making body.
• Once the decision has been taken, the MFSA will inform the Applicant whether it is considering granting or refusing the application for authorisation.
• Pre-Authorisation letter is issued in the event that the MFSA is considering granting the Authorisation.
• Fulfilment of Pre-Authorisation Requirements to the satisfaction of the MFSA.
• The authorisation is granted by the MFSA by the issuance of an Authorisation Letter and a Certificate of Authorisation.

• Pre-Commencement of Business - These requirements should be satisfied following the granting of authorisation but prior to the Applicant commencing its business.
• Post-Commencement of Business - These requirements may be satisfied following the commencement of business by the Applicant and within any time frames stipulated by the MFSA.
• The MFSA will monitor whether the Post-Authorisation Requirements are being satisfied.
• The supervisory process will be initiated by the MFSA (such interactions would be held between 6 to 12 months following the granting of an authorisation).
• Commencement of business activities.
• Ongoing supervision by the Banking Supervision Unit.

• Submission of Intent
• Application Form (including a business plan and financial projections covering the first 3 years of operations and other attachments as outlined within)
• AX01 – Corporate Questionnaire
• AX02 – Involvement Suitability Assessment
• AX03 – Third Party Outsourcing Assessment
• AX05 – Extended ICT Questionnaire
• AX18 – Trusts and Fiduciaries Additional Questionnaire
• AX26 – Source of Wealth and Source of Funds Self-Declaration Form
• Personal Questionnaire for individuals who are, or are proposing to become Directors, Controllers or Managers.

Credit and Financial Institutions are required to publish Annual Reports four months following year end. 

Credit and Financial Institutions in Malta are required to submit Regulatory Returns to the MFSA and the Central Bank of Malta (“CBM”) at specific intervals. Financial Institutions may be subject to submit all or some of the following information, depending on their activities, risk exposures, and other factors which the MFSA or the CBM will deem relevant for the purposes of their assessment. Reporting is, inter alia, related to:

• Liquidity
• Credit and Country Risk Exposures
• Own Funds
• Solvency Ratio
• Large Exposure
• ICT Risk Assessment
• Fraud Reporting
• Capital Adequacy