Aggregated News From Investment Management Regulators

MFSA Staying on Track Despite COVID-19: Regulatory Inspections Being Carried Out Remotely – MFSA

Report/Flag

Please complete the required fields.



The MFSA has remained on track in its commitment towards enhanced supervisory effectiveness despite the disruptions caused by COVID-19. The Authority adapted quickly to new ways of operating, thanks to recent investment in technology infrastructure. Although an “on-premises” staff presence is being maintained, many are operating remotely, but, as a result of business continuity planning, scheduled inspections are now being carried out virtually and no postponements are envisaged either.

The Authority took a proactive stance and on 12 March issued a Notification to all authorised entities and licensed persons to inform about the new Interim Supervisory Measures. The Notification stated that supervision will be increasing its use of remote data gathering supervisory tools, to strengthen its inspection procedures. These included the increase and widening the scope of pre-visit documentation requests, the issuing of questionnaires and conducting Board and Officer interviews via teleconferencing or video links. These interim measures are aligned with current international recommendations and good practices.

Ray Camilleri, Senior Manager within the Banking Supervision function, gives NewsHub some insight into how these inspections are now being carried out:

1. What was a typical working day like for an Onsite Inspector prior to COVID-19?

Inspections have a pre-defined scope and time frame and, up to a few weeks ago, used to take place on the premises of the inspected entity. In fact, travelling back and forth between the office and the institutions’ premises formed part of the daily routine for Onsite Inspectors who used to spend several days, and even weeks, at the inspected entity, depending on the scope of the inspection.

2. To what extent has COVID-19 impacted the onsite inspections being carried out by the Banking Supervision function?

The current outbreak of COVID-19 has brought about a sudden, radical change in the way we operate. Before, the thought of carrying out onsite duties remotely had never crossed our minds. But now, conducting interviews, holding meetings and vetting documents, which are key elements of onsite supervision, are being effectively carried out remotely. Notwithstanding this drastic change in the way of carrying out inspections, the onsite team managed to rise to this challenge by ensuring that they do not compromise on the quality and timeliness of the final product. This is mainly possible thanks to two factors: the swift adaptation of the onsite team to this new reality and the MFSA’s upgraded IT infrastructure, which is enabling us to carry out our daily tasks effectively.

3. What challenges has the Banking Supervision function encountered?

While several inspections are being effectively undertaken remotely, mainly through secured shared platforms, there are other inspections which cannot be fully accomplished at some institutions as these are not yet able to provide all the necessary documentation in a secured electronic format.

On their part, our licensed institutions are all very well aware of the importance of having in-depth periodical assessments,by the Regulator, of their core risks. Thus, it is imperative that the present challenging issues are assessed by all concerned with the scope of finding the best solutions that would support and fit within the ‘new normal’ of doing on-site inspections.

4. Why are inspections important and necessary?

Inspections are a critical tool for supervision worldwide. Licensed institutions are inspected in order to provide an in-depth analysis of different risks, internal control systems, business models or governance. Inspections should be intrusive while adhering to the principle of proportionality and aim to provide a detailed snapshot of the situation of a given entity, including a forward-looking analysis.

Regulator Information

Abbreviation: MFSA
Jurisdiction: Malta

Recent Articles

SEC Charges Barred Broker and His Company with Defrauding Older Americans

Defendant Promised Hefty Returns while Spending Investors’ Money on Luxury Goods Washington D.C., Aug.

CPMI and IOSCO publish a discussion paper on CCPs’ practices for addressing non-default losses

See PDF published by the International Organization of Securities Commissions (IOSCO) here: Read more

FCA encourages market participants to continue transition of LIBOR-linked bonds

This statement is for issuers and bondholders of outstanding LIBOR-linked bonds. The FCA is strongly encouraging issuers and bondholders of outstanding LIBOR-linked bonds to...

Get the latest from Regulatory.News in your inbox!

×