The MFSA’s recently-published 2024 Annual Report highlights a year of regulatory progress and a sharpened focus on compliance and AML/CFT standards. Here’s what compliance leaders and regulated entities need to know.
A Growing and Resilient Sector
Financial services now contribute 8.2% to Malta’s real Gross Value Added, with sector employment up 21.6% since 2020—a good sign as it shows continued growth and investor confidence.
Stronger Regulatory Oversight
Supervisory interactions surged by 33% in 2024, with 1,345 engagements across the sector, reflecting a more proactive approach to monitoring and guidance. The report shows an increased commitment to upholding market integrity and deterring non-compliance by MFSA, which issued 134 enforcement actions, including €926,485 in penalties, 49 public warnings, and 5 consumer notices in the last year.
AML/CFT and Sanctions Compliance
Half of the inspections carried out in 2024 focused on AML/CFT. The MFSA carried out 27 FIAU-delegated supervisory engagements, focusing on AML/CFT and sanctions compliance across several regulated sectors. These supervisory engagements focused on identifying weaknesses in AML/CFT frameworks, reviewing internal controls, and governance structures.
Due Diligence and Fit & Proper Assessments
Over 1,400 due diligence reports on applicants for key roles within the financial services sector were completed by the Authority, an 8% increase on last year. 64 MLRO applications across all supervisory functions were received and 61 MLRO interviews were conducted to assess the candidates’ suitability, sector-specific knowledge, and ability to meet the expectations of the role.
Sector-Wide Thematic Reviews
The MFSA conducted thematic reviews to assess sector-wide compliance with regulatory expectations. These reviews were conducted through structured questionnaires, distributed to a selected sample of authorised entities. After it analyses the individual responses, the MFSA publishes its report, in the format of a ‘Dear CEO’ letter. This outlines the Authority’s observations and supervisory expectations. Key Thematic Reviews for 2024 included the Thematic Review on Money Laundering Reporting Officers (MLROs) within the corporate Company Service Providers (CSPs) sector, which focused on reporting procedures, internal controls, MLRO qualifications and time commitment dedicated to the role; and the Thematic Review on Financial Institutions and Crypto Asset Service Providers (CASPs), which zoomed in on Terrorism Financing (TF), Targeted Financial Sanctions and Proliferation Financing.
Legislative and Regulatory Developments
The Annual Report also reported regulatory developments introduced in 2024, amongst them the Markets in Crypto-Assets Act, updates to the Virtual Financial Assets framework, and amendments to the Protected Cell Companies regulations in Q3 2024.
At Shoulder Compliance, we help clients navigate the constantly evolving regulatory environment with tailored compliance and AML solutions. Reach out on info@shoulder.mt to learn more.
