The MFSA recently published updates on the priority areas of focus for supervision for this year and highlighted that the overarching focus shall be on corporate governance and financial crime compliance. Following careful consideration of the market environment and regulatory developments, the MFSA identified the below four cross-sectoral priorities for 2021:
- Corporate Governance and Culture:
Supervisory work carried out in 2020 led to the identification of areas where further improvement on the part of authorised entities may be required. The MFSA will be communicating its expectations in this respect as part of a project which will lead to the development of a new Corporate Governance Code for regulated entities. The Authority is cognisant of the ever-increasing importance of ESG considerations when it comes to company culture and work shall also be undertaken in this respect
2. Financial Crime Compliance (FCC):
In addition to continuing its positive collaboration with the FIAU, the MFSA will continue building on work performed in 2020 in monitoring the compliance of regulated persons with AML/CFT obligations. Furthermore, the FCC function will issue periodic publications to update the industry of developments concerning AML/CFT and the current status of the AML regime within the industry itself.
3. The impact of COVID-19:
Throughout 2021, the Authority will continue monitoring the impact of COVID-19 on the financial services sector, particularly the post-COVID viability of regulated entities’ business models, including their capacity to cope with the operational consequences it will have, alongside the impact on consumers of financial services.
4. ICT Risk and Cybersecurity:
The Authority’s newly set up ICT Risk and Cybersecurity function will continue to ensure that regulated entities have an adequate cybersecurity programme in place designed to enhance resilience to cyber-attacks and mitigate the risks associated with such threats. The team will also be designing an ICT and Cybersecurity Risk model for supervision and carrying out education and awareness sessions for stakeholders. Moreover, there are also plans to conduct thematic desk-based reviews on a sectoral basis on ICT Risk and Cybersecurity matters, including outsourcing to cloud services providers.
These priorities are complementary to the investor protection, market integrity and financial soundness objectives underpinning financial regulation, which remain at the forefront of the MFSA’s agenda. The Authority will also discuss sector specific priorities in the “The Nature and Art of Financial Supervision” publication series, of which the MFSA has already published 3 Volumes on Banking, Virtual Financial Assets, and ICT Risk and Cybersecurity.
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