Malta Financial Services Authority (MFSA) Updates
A circular issued by the MFSA to insurance market participants informed relevant stakeholders about amendments to Chapter 1 and Chapter 2 of the Insurance Business Rules issued under the Insurance Business Act (Chapter 403 of the Laws of Malta).
The following amendments were made effective immediately:
2. Shareholding Policy for Credit Institutions and Insurance Companies
With a purpose to promote good corporate governance practices, the MFSA has issued a policy setting out the manner of assessment of shareholding structures of credit institutions and of insurance companies. This policy repeals and supersedes the Policy dated 13 February 2012 applicable to Applicants for authorisation as Credit Institutions and Insurance Companies.
The policy warns prospective licence applicants that the MFSA has no risk appetite for limited shareholding structures that may adversely impact the overall governance, financial soundness and resilience of a licence holder.
3. Guidance Note addressing Technology Arrangements, ICT and Security Risk Management and Outsourcing Arrangements
The MFSA has launched a consultation on the Guidance Note addressing Technology Arrangements, ICT and Security Risk Management and Outsourcing Arrangements
The Guidance is based on four high level principles: Proportionality, Principles-based consistency of outcomes, Information Assurance (IA) in Technology Arrangements and Approach to cloud computing. The MFSA proposes a set of definitions specific to the Guidance and addresses the following matters: Technology Arrangements, ICT and Security Risk Management and Outsourcing Arrangements.
The MFSA’s proposed Guidance is of a principle-based cross-sectoral nature, drawing from standards established by several European bodies, however the Guidance may be superseded by more sector specific laws, regulations and guidelines.
The consultation period closes on the 28th of August 2020 and any feedback is to be sent to the Supervisory ICT Risk and Cybersecurity function within MFSA on email@example.com.
European Securities and Markets Authority (ESMA) Updates
ESMA has renewed its decision to temporarily require the holders of net short positions in shares traded on an EU regulated market to notify the relevant national competent authority if the position exceeds 0.1% of the issued share capital.
The purpose of this decision has stemmed from a need to maintain the ability of national competent authorities to deal with any threats to market integrity, orderly functioning of markets and financial stability at an early stage.
The measure entered into force from the 17th June 2020 for a period of three months and applies to natural and legal persons irrespective of their country of residence. However, these measures do not apply to shares admitted to trading on a regulated market where the principal venue for the trading of the shares is located in a third country, market making or stabilisation activities.
The decision can be found on: https://www.esma.europa.eu/sites/default/files/library/esma71-99-1342_decision_ss_reporting_renewal_statement.pdf
European Banking Authority (EBA) Updates
The EBA has extended the application date of its guidelines on legislative and non-legislative moratoria to 30 September 2020. The extension intends to support measures taken by banks to extend loans in response to the extraordinary nature of the COVID-19 pandemic created crisis. The extension aims to ensure that adequate treatment for borrowers is available across the EU.
The Guidelines outline the criteria to be fulfilled by legislative and non-legislative moratoria on loan repayments and aim to clarify the requirements for public and private moratoria, which if fulfilled, will help avoid the classification of exposures under the definition of forbearance or as defaulted under distressed restructuring.
The Guidelines’ extension can be found here: https://eba.europa.eu/eba-extends-deadline-application-its-guidelines-payment-moratoria-30-september
2. EBA publishes final draft ITS on institutions’ Pillar 3 disclosures and on supervisory reporting
The EBA has published the Implementing Technical Standards (ITS) on public disclosures by institutions and revised final draft ITS on supervisory reporting that implements changes introduced in the revised Capital Requirements Regulation (CRR2) and the Prudential Backstop Regulation.
The publications aim to promote market discipline through enhanced and comparable public disclosures for stakeholders and to ensure that reporting requirements are adhered to.
The ITS Drafts can be found on: https://eba.europa.eu/eba-publishes-final-draft-comprehensive-its-institutions%E2%80%99-pillar-3-disclosures-and-revised-final
This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.