MFSA Consultation paper launched today on Enhancing the Governance, Culture and Conduct of MFSA Authorised Entities
22nd February 2022
The Malta Financial Services Authority (MFSA) launched a month-long consultation dated today on its proposed Corporate Governance Code, an essential factor in fostering and enhancing Governance, culture and conduct.
We would all agree that good Governance ensures institutions operate transparently. Good Governance is fundamental for investor protection, market integrity, and financial soundness, minimises the risk of failure, safeguards stakeholders’ rights and avoids excessive risktaking in corporate decision making.
As soon as the Corporate Governance Code is in place, this will apply to all persons authorised by the MFSA, except to listed entities falling within the scope of the MFSA Capital Market Rules.
Corporate Governance was identified as one of the Authority’s main strategic objectives.
The Consultation Document can be accessed from the Authority’s website. The industry is encouraged to provide comments or feedback no later than 22nd of March 2022. Comments and feedback are to be addressed to the Strategy, Policy and Innovation function via email to corporategovernance@mfsa.mt.
The Corporate Governance Code is intended to:
- Set out best practices in corporate Governance for Malta’s financial services sector and encourage their adoption by all authorised entities;
- Improve relationships between authorised entities and their stakeholders.
- Ensure effective functioning of authorised entities’ Boards so that the best decisions are taken;
- Ensure that: (i) boards exercise adequate oversight of executive management; (ii) boards have an adequate understanding of risk; (iii) firms maintain high standards of corporate and compliance culture; and that (iv) firms have adequate internal controls;
- Support authorised entities to implement improved governance standards to achieve enhanced resilience and sustainable operations.
- Encourage authorised entities to integrate sustainable, environmental and social aspects in their business strategy.