Transcript Eurobarometer - Appleby Global

Malta and the EU
9 Years down the line
1
… alchemy
of growth
Horizon 3: Aviation
Horizon 1: Shipping
(Since 1973)
Horizon 2: Banking
Insurance
Investment Services & Funds
Multi-nationals
(Since
1994)
9 Years down the line
The last 8 years have changed our country
dramatically and positively.
The majority of Maltese citizens recognise this
reality, notwithstanding differing political
affiliations.
Eurobarometer has recently found that the
number of Maltese who believe that the EU has
been of benefit to the country exceeds those who
do not by a ratio of more than two to one.
Eurobarometer Survey
Has Malta benefited from being a member of the EU? (May 2010)
11%
29%
Benefited
60%
60%
Not Benefited
Source: Standard Eurobarometer 73
Don't know
The changes experienced
- Both the government and the private sector
conduct their business and take decisions
with a greater focus on the longer term
- More emphasis is given to managing the
realities before us, and on husbanding our
resources, as opposed to the amateurish
wishful thinking of the past
The changes experienced
- The massive investment in several sectors
coupled with the reduction of bureaucracy
and simplification of tax and other rules has
led to the development of a vibrant and
diversified economy
- Active participation at all levels has enabled
us to both defend Malta’s interests and help
shape the EU’s future direction on the basis
of our national experiences and those of our
partners
Malta’s size has not hindered us
from attaining our goals
- Changes to budget legislation which worked
-
-
against us as the most densely populated
country in the EU
The re-shaping of the EU's policy on illegal
immigration so that solidarity in this area
became part of EU policy. Hosting the European
Asylum Support Office in Malta
Ensuring
that the
Regulation
on
the
Registration, Evaluation and Authorisation of
Chemicals (REACH) had an SME focus
Negotiating a sixth Maltese seat in the
European Parliament
Malta’s Performance as an EU Member
State
- Malta’s
representatives are described as
persons who know their business and put
forward strong and persuasive arguments
- We are considered to be a country which - due
to our preparedness - normally ‘punches well
above its weight’
- This is not just something to be proud of but,
given our size, is a necessity if we want to be
truly effective
Malta’s Performance as an EU Member
State
- The
Commission’s bi-annual Internal Market
Scoreboard confirmed Malta as leader for the seventh
consecutive time in terms of the transposition of
internal market Acquis
- Malta has one of the lowest number of open
infringements in the Union; this being the case for
the past four years
The lessons learnt
- While there is no such thing as ‘mission impossible’,
consistency, patience and resolve are essential
attributes;
- Master your brief and only spend time on what is
truly important to your country
- At all times be constructive, work with others and
actively look for solutions not just for your country
but also for others
Quote……
“ …in Malta’s case, not only has membership of
the European Union been beneficial on multiple
levels, but it has permitted the Maltese
Government to respond more effectively to
national challenges while contributing to
addressing European interests and concerns
which are today interlinked with the concerns of
Maltese citizens. EU membership is a tool and
we would not be where we are today without
the opportunities provided by this tool and the
Maltese Government’s effective use of it.”
Malta and the EU
The Economy
12
Diversification of the Economy
- Malta’s economy has diversified substantially
with the emergence of new sectors which were
impossible or even unimaginable before EU
membership
- These sectors have created many new and better-
paid jobs than those lost in the scaled-down
sectors
- The use of EU Funds is another way in which
Malta has benefited
- Malta benefited from some €1.3 billion EU funds
(which equates to over €3,250 per capita)
between 2004 and 2013
Economic Performance
- Since membership, Foreign Direct Investment
has never gone below 7% of Malta’s GDP, and
in June 2011 the stock of FDI in Malta was
estimated to total €12.4 billion
- In 2011, Malta brought its deficit below the 3%
level being one of just six Eurozone countries to
do so
- In February 2012, Malta was among a minority
of Member States not needing further in-depth
review by the Commission of its macroeconomic and fiscal status
Employment and Growth
- Employment growth rate of 2.7% in 2011, the
third largest growth rate amongst the EU27
- Unemployment in Malta, stands at 6.5% of the
labour force, the fifth lowest in the EU compared
to 11.1% unemployment rate in the Eurozone
- Over 93% of Malta’s graduates find employment
within three years of their graduation compared
to the EU average of 76.5%
- The compounded annual average growth rate of
GDP has been a remarkable 4.4% over the
period 2003 to 2011
Economic output
Malta GDP (2012)
EUR 6,755,851,000
source: Eurostat
Economic output
Malta GDP per capita
(2012)
EUR 16,100
source: Eurostat
Unemployment
Malta (2012)
6.5%
Euro Area (2012)
11.4%
European Union (2012)
10.5%
source: Eurostat
Inflation
Malta (2012)
3.2%
Euro Area (2012)
2.5%
European Union (2012)
2.6%
source: Eurostat
Government Deficit
Malta (2011)
-2.7%
Euro Area (2011)
-4.1%
European Union (2011)
-4.4%
2012 data not yet available
source: Eurostat
Government Gross Debt
Malta (2011)
70.9%
Euro Area (2011)
87.3%
European Union (2011)
82.5%
2012 data not yet available
source: Eurostat
Table
SIZE OF MALTESE BANKS
Core domestic banks
Non-core domestic banks
International banks
12,726.011
Total assets (EUR
billions)
3,799.470
23,668.693
195.8
Total assets (as % of
GDP)
58.5
364.2
Source: Malta Financial
Services Authority
Solvency ratios
70
60
percent
50
40
30
20
10
0
2006
2007
2008
2009
2010
Regulatory capital to risk weighted assets
Regulatory Tier 1 capital to risk weighted assets
2011
2012
MFSA
Creating a finance centre –
the Supervisory Authority
24
MFSA’s Historical timeline
1988
MIBA offshore regime
1989
Set up of Malta Stock Exchange
1994 MFSC onshore regime:
Taxation
Regulation – Transparency -
1996
Grant of offshore licences stopped
2000
Malta OECD accord FATF co-operative jurisdiction
2002
MFSA set up as Single Regulator Set up of FIAU
2004
Offshore licences stopped/nominee companies phased out
Agenda for Maltese Financial Services in Europe
Financial Services Consultation Council
EU Entry: Regulatory Standards & Single Market
MFSA’s Historical timeline
2007 MFSA Strategic Plan 2007-2009
2010 MFSA move towards Integrated Regulation
2011 MFSA Strategic Plan 2011-2014
2012 Setting up of Enforcement Unit
2013 Introducing Conduct of Business
FinancialServices
Services Legislation
Financial
Legislation
Primary Legislation
Supporting Legislation:-
Banking Act
Financial Institutions Act
Financial Markets Act
Insurance Business Act
Insurance Intermediaries Act
Investment Services Act
Retirement Pensions Act
Trusts and Trustees Act
MFSA Act
Central Bank of Malta Act
Companies (includes LPs) Act
Netting upon Insolvency Act
Securitisation Act
Prevention of Financial
Markets Abuse Act
Professional Secrecy Act
Prevention of Money
Laundering Act
27
Regulation
Malta Financial Services Authority (MFSA):-
• Single regulator for financial services
• Regulates banking, financial institutions,
insurance
companies, investment services companies, securities,
recognised investment exchanges and admissibility
to listing, trust management companies, pension schemes
• Listing Authority
28
MFSA’s approach to regulation
• Autonomous public institution, self-funded
• Avoidance of Prescriptive Regulation to allow promoters
the flexibility to operate
• Risk-based supervision
• Regulation is proportionate to the size and nature of the
business
• Direct contact with all license holders
• On-site and off-site supervision
Main Objectives of the MFSA
•
•
•
to regulate, monitor and supervise financial services in
Malta
to promote the general interests and legitimate
expectations of consumers of financial services, and to
promote fair competition practices and consumer choice;
to advise the Government generally on the formulation
of policies in the field of financial services, and to make
recommendations to Government as to any action which
in the opinion of the Authority, it would be expedient to
take in relation to matters in respect of which the
Authority has such duties;
30
MFSA - Organogram
Legal &
Int. Affairs Unit
Board of Governors
Chairman
Board Secretary
Enforcement Unit
Director
Co-ordination Committee
Supervisory Council
Company Registry
Director General
Registrar of
Companies
Board of Management
and Resources
Chief Operations Officer
Functions – Board of Governors
• Board of Governors - composed of 7 members including
Chairman. Chairman and Governors appointed for a
period of up to 5 years and their appointment may be
renewed for further periods of 5 years;
• Board of Governors sets policy;
• Legal and International Affairs Unit - Secretary to the
Board of Governors and the Co-Ordination Committee.
32
Co-Ordination Committee
Act as contact point and principal channel of communication/coordination between Board of Governors, Supervisory Council and
Board of Mgt & Resources. Co-ordinates the implementation of
policies approved by the Board of Governors.
33
Co-Ordination Committee
• Responsible for the Co-Ordination of the
implementation of the policies of the
Authority
• Act as contact point and principal channel
of communication/co-ordination between
Board of Governors, Supervisory Council
and Board of Mgt & Resources
Composition of the Supervisory Council
SUPERVISORY COUNCIL
Director General
Director
Banking
Supervision
Director
Director
Insurance &
Pensions
Supervision
Securities &
Markets
Supervision
Director
Regulatory
Development
Director
Authorisation
35
Remit of the Supervisory Council
• Art 10. (1) of the MFSA Act states:-
– The Supervisory Council shall be responsible
for the approval of and for the issuing of
licences and other authorisations, for the
processing of applications for such licences
and authorisations, and for the monitoring
and supervision of persons and other entities
licensed or authorised by the Authority in the
financial services sector.
36
Tasks (I)
• Authorisation
 Insurance Companies
 Banks / Financial Institutions
(payment services; financial leasing;
venture or risk capital; money broking; e-money issuers)
 Collective investment schemes / Investment Services Licences
(asset managers, trustees, custody, stockbroking)
 Regulated markets & Central Securities Depositaries
 Retirement Schemes and Retirement Funds
 Due Diligence exercise carried out prior to licensing
Tasks (II)
• Supervision
 Compliance with laws and regulations
 Compliance with licence conditions
 On-site and off-site supervision
 Admissibility of Financial Instruments
• Regulation
 Drafting of legislation, legal notices and regulations
 Rules and Guidance Notes
 Issue of Circulars
Board of Management & Resources
MFSA Act Art 11 states
“.....responsible for carrying out the day-to-day management and finances of the
Authority, including business development and ancillary services and for the
general co-ordination of the Authority’s administrative affairs and shall be
composed of the persons responsible for such activities as may be designated by
the Board of Governors”
39
Board of Management & Resources
• Responsible
for carrying out the day-to-day
management and finances of the Authority, including
business development and ancillary services and for
the general co-ordination of the Authority’s
administrative affairs
• Presided by the Chief Operations Officer as Chairman
and Heads of Unit responsible for Communications
and Events, Administration, Human Resources and
Training, Finance and Risk Management, Information
Systems
Remit - Board of Management & Resources
Administration
HRD &
Training
•Upkeep of premises – including cleaning and maintenance
•Organisation of transport,
•Security
•Internal personnel training
•Industry training programmes
•HR functions – recruitment, personnel records, staff appraisals
•Support Education Council
•Systems development, outsource system applications, data security & integrity
•Implement new systems & infrastructure, security, support, maintenance
Information •System back-up and business continuity
•IT Security
Systems
•Information – website, enquiries, intranet
•Public Relations – media, press releases
Communic - •Events – conferences, seminars, training logistics, conference facilities
ations
Finance &
Risk
•Finance – Accounting records, internal control, budgets, fees
•Procurement
•Operational risk management
41
MFSA
Creating a finance centre –
Recognised Investment
Exchanges
42
Recognised Investment Markets
Malta Stock Exchange
European Wholesale
Securities Market
43
European Wholesale Securities
Market - EWSM
A new regulated market for wholesale fixed income
securities, registered and domiciled in Malta in
2012 [Majority Shareholder – Irish Stock Exchange
(ISE) Minority shareholder – Malta Stock Exchange
(MSE)]
The EWSM is approved as an EU regulated market
under MiFID. Dedicated to arrangers and issuers of
wholesale [€100,000 denomination] securities
under the Prospectus Directive
44
Why Malta and Ireland?
• Long standing relationship between ISE and MSE.
Combines strengths of two reputable exchanges
into one truly European market designed to meet
international debt issuer requirements
• Malta is an emerging financial services location
with a commitment to develop capital markets
• EU regulatory framework, both jurisdictions form
part of the Eurozone
45
EWSM Overview
ISE
Marketing,
Infrastructure &
Corporate
Services
MSE
Market Operator
MFSA
Competent
Authority
Market Supervisor
EWSM
Listing Agent
& Annotation
Services
46
Infrastructure
• Market Operator & Compliance - MSE
• Administration, finance and company secretarial ISE
• IT market services (announcements, listing and
website management) - ISE
• Marketing and promotion - ISE
• Corporate knowledge of ISE will be at EWSM’s
disposal
47
Listing Process - Overview
Issuer
Arranger/ Law Firm [may act as Listing Agent]
Listing Agent
MFSA as Listing Authority [dedicated Listing Committee]
EWSM
48
Process – Efficiency and Expertise
• The EWSM has established Guidelines for Listing and Trading on
the EWSM [www.ewsm.eu]. All regulatory requirements of the
MFSA and EWSM are presented in one user friendly document.
• The MFSA approves prospectuses for securities to be admitted to
the EWSM under the Prospectus Directive. As Listing Authority,
under the Consolidated Admissions and Reporting Directive
[CARD], the MFSA approves the admissibility of securities to
listing as well as the ongoing requirements of issuers under the
Transparency Directive.
• The MFSA adopts a pragmatic market oriented proactive
approach to prospectus review and approval including
guaranteed review times of 3 business days for initial submission
and 2 business days for subsequent drafts of prospectuses.
49
Listing Agent
The appointment of a Listing Agent is a key
element of the admission process as the Listing
Agent ensures smooth and timely interaction
between issuers and arrangers and the MFSA
and EWSM on regulatory requirements.
The Listing Agent reviews the prospectus and
other documentation for compliance with the
EWSM Guidelines prior to submission
50
Listing Agent
A Listing Agent approved by the Listing Authority shall be a
body corporate, partnership or firm incorporated or
established in the EEA (i.e. either in an EU Member State or
an EEA State) and be independent of any Issuer, or related
service provider, to which it provides listing agent services.
• have extensive experience in reviewing and preparing
listing applications and Prospectuses for debt Issuers and in
advising Issuers on the application of the Listing Rules and
have adequate resources to fulfil the role expected of a
Listing Agent under the Listing Rules;
• Currently only one Listing Agent – ISE Listing Services
[ISELS] has been approved by the MFSA [www.isels.ie]
51
Niche Markets
• Insurance Securitisation – Legislation for Incorporated Cell
•
•
•
•
•
•
Companies is in place. Each incorporated cell can be an iSPV. Rules
are currently being drafted.
Debt linked to life settlement policies – policies have already been
developed by MFSA in this area.
Environmentally driven finance – debt linked to infrastructure for
wind and solar energy. Waste to energy finance etc.
Intellectual Property based structures
Finance for Transportation Projects – Aircraft Finance [Malta has
developed legislation for Aircraft Registration, Maintenance etc]
Shipping Finance [Malta has the third largest shipping register
with arounr 7,000 registered shipping companies].
Project bonds – reflecting the move from loan financing of
projects to financing of projects through the capital markets.
Traditional forms of finance
52
Securitisation Act, 2006
• The aim of the Act is to provide a legal framework for domestic and
•
cross-border securitisations to take place in and from Malta. . It provides
a comprehensive framework for the conversion of receivables or other
assets into securities that can be placed and traded in capital markets
Article 2 of the Act defines Securitisation as a transaction or an
arrangement whereby a securitisation vehicle, directly or indirectly:
1. Sale transactions: whereby the originator transfers a pool of assets to
the securitisation vehicle;
2. Synthetic transactions: whereby the securitisation vehicle assumes the
credit risk of the originator through credit derivatives;
3. Loan transactions: whereby the securitisation vehicle grants secured
loans or other secured facilities to the originator.
53
MFSA
Supervisory Developments
54
Supervisory Developments
• Establishment of a Joint Financial Stability
Board with the Central Bank of Malta
• Introduction of Registration for Corporate
Service Providers
• Banking Union
Supervisory Developments –
Conduct of Business [options]
1. Establishment of a Conduct of Business Board
Proposed Composition – Director General;
Director Consumer Complaints; Director
Enforcement; Director of the Relevant
Supervisory Unit
or
2. Establishment of Conduct of Business Unit
Enforcement Unit
• Set up in 2012
• Responsible for the enforcement aspects previously
carried out by the respective supervisory units’
 Reviewing actions and conducting investigations of licence holders
suspected of having committed compliance failures, serious
misconduct, market abuse, breach of listing rules or any other
serious breaches of the law
 Investigating persons carrying on financial services activities without
having the necessary licence or authorisation
 Financial crime issues
MFSA
Consumer Affairs
58
Consumer Affairs Unit
Consumer Education
Consumer Complaints
Support for the Depositor Compensation Scheme,
Investor Compensation Scheme and the Protection and
Compensation Fund
59
Consumer Affairs Unit

Receives and assesses wide range of issues arising
from consumer complaints and queries

Handles all forms of consumer complaints with
feedback/interaction from regulatory and admin units
• Member of FIN-NET, the EU’s network
for
out-of-court
financial
redress.
Contacts with the network beneficial,
especially when sharing best practices in
resolving common issues arising from
complaints
60
Consumer Affairs Unit

New web-based Case Management System (CMS) installed 1 Jan 2012.

The CMS, developed by MFSA ICT Unit, meets reporting requirements
of the European Commission Recommendation C(2010)3201 on
harmonised methodology of consumer complaints reporting (issued 12
May 2010). The legacy CMS software is still in use in regard to those
cases received until end 2011.

New system enables Unit to provide better reporting, especially in
regard to phone calls received by the Unit.

Fully integrated with online complaints system available on
mymoneybox portal .
61
Consumer Complaints Unit
Consumer Education





Weekly participation in TV and
radio programmes.
Financial services consumer
education portal:
Each month new topics being
added/updated. Pages are also
being translated into Maltese.
Monthly e-newsletter “My Money
Box” + Facebook presence
New insurance comparative tables
62
Membership of International
Organisations
•
New EU Supervisory Architecture:• European Securities & Markets Authority (ESMA)
• European Banking Authority (EBA)
• European Insurance
Authority (EIOPA)
and
Occupational
Pensions
•
Inter. Association of Insurance Supervisors (IAIS)
•
Inter. Organization of Securities Commissions (IOSCO)
•
Inter. Organisation of Pensions Supervisors (IOPS)
63
Memoranda of Understanding
currently in force
Bilateral MoU’s and
Agreements with
Foreign Regulators
• 27 MoU’s in 23 countries & 2 Letter Agreements
• Covering Banking, Insurance, Securities, Trusts, Pension
funds, exchange of information, etc
• New MOU with Qatar Financial Centre & Regulatory
Authority, State of Nebraska, National Bank of Slovakia
Bilateral MoU’s –
Local Authorities
• Office of Fair Competition – exchange of information &
assistance
• CBM – exchange of information and payment and securities
settlement systems, Joint Financial Stability Board
Multilateral MoU’s
& Protocols
• MOF/CBM – co-operation in financial crisis
• NSAs/EU Central Banks & EU Finance Ministers on financial
stability
• EIOPA – Insurance and Occupational Pensions
• ESM & IOSCO – Securities
• IAIS - Insurance
64
Strategic Plan 2007-2009
MFSA Mission Statement
• Opportune to remind staff on the MFSA
Mission Statement:-
“Ensure high standards of
conduct and management in
financial services and promote
the legitimate expectations of
consumers.”
66
MFSA’s Strategic Plan
 Enable innovation through Legislative and
Regulatory Development
 Review of existing Legislation and Regulation
 Continuous training at staff and Industry level
 Develop strategic partnerships with other
regulatory Authorities
 Maintain Malta’s reputation as a leading financial
services jurisdiction
Assessment of the MFSA
2002/3: IMF/World Bank Review-FSAP
2005: Internal Audit
2007: Internal Audit
2010: Independent Assessment
2011: Governance of Supervision
2012: Internal Audit - Risk Management
Ongoing Art IV consultation with the IMF
Currently a review of the financial swector under the EU
Alert Mechanism is taking place
68
Number of Employees
250
Full Time
Part Time
200
150
200
178
100
161
146
135
126
50
3
7
5
3
9
6
0
2007
2008
2009
2010
2011
2012
69
Staff
Total MFSA employees
Approx. 210
Economists, Mathematicians,
Accountants & Statisticians
23%
Lawyers
12%
Banking & Finance
16%
Other Professions
25%
Staff having diploma
14%
Clerical and others
10%
Malta and the EU
Creating a finance centre -Results
71
Licenses Issued – CISs
2008
2009
2010
2011
200
2012
2
180
14
PIFs
UCITS
NonUCITS
112
4
3
102
3
0
102
5
0
163
14
2
117
9
2
New funds (incl. sub-funds)
160
140
120
2
9
3
4
3
100
5
163
80
60
112
102
102
2009
2010
117
40
Private
0
0
1
0
0
20
0
2008
Total
119
105
108
179
128
PIFs
UCITS
Non-UCITS
2011
2012
Private
72
Investment Services Licences
140
26
24
120
18
Licences
100
80
13
12
60
40
88
75
109
113
Dec-11
Dec-12
102
20
0
Dec-08
Dec-09
Dec-10
Investment Services
Recognised Fund Administrators
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Investment Services
75
88
102
109
113
Recognised Fund
Administrators
12
13
18
24
26
Total
87
101
120
133
139
73
Licensed Insurance Companies
Non Life
Life
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
26
30
33
37
42
8
8
8
8
7
60
7
7
2
7
2
7
2
8
50
Reinsurance
Total
3
4
3
4
2
7
2
7
2
7
41
45
50
54
58
8
8
8
8
8
of which
Domestic origin
Insurers
Affiliated Insurers
PCCs
Foreign Insurers
6
8
10
10
11
3
3
4
8
8
(10 cells) (12 cells) (13 cells) (15 cells) (18 cells)
2
2
2
1
1
Insurance Undertakings
Composite
4
40
4
3
30
3
8
8
8
20
26
30
33
37
42
10
0
Dec-08
Non Life
Dec-09
Life
Dec-10
Composite
Dec-11
Dec-12
Reinsurance
74
Insurance Intermediary Licences
Registered Insurance Brokers
Enrolled Insurance Brokers
Registered Insurance Agents
Enrolled Insurance Agents
Registered Insurance Mgrs.
Enrolled Insurance Managers
Tied Insurance Intermediaries
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
67
69
66
71
78
28
28
28
30
29
30
28
27
28
28
21
19
18
19
20
20
23
22
26
26
12
13
13
15
15
529
500
507
513
506
75
Credit and Financial Institutions
30
25
Licences
20
15
10
25
23
22
15
27
25
15
15
13
5
23
0
Dec-08
Dec-09
Dec-10
Credit Institutions
Dec-11
Dec-12
Financial Institutions
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Credit Institutions
22
23
25
25
27
Financial Institutions
15
15
13
15
23
Payment Institutions
6
6
7
9
15
Electronic Money Institutions
0
0
0
1
4
of which:
76
Trust and Trustees Authorisations
140
120
100
80
60
98
117
123
Dec-10
Dec-11
108
131
40
20
0
Dec-08
Dec-09
Dec-12
Authorised Trustees - Trusts and Trustees Act
Nominees
Trusts Registered - Trust Act, 1988
Authorised Trustees - Trusts and
Trustees Act
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
29
24
23
22
20
132
117
117
115
115
98
108
117
123
131
77
Retirement Schemes
Retirement Schemes
18
16
14
12
10
17
8
13
6
9
4
2
5
7
6
3
3
3
0
Dec-10
Asset Managers
Dec-11
Dec-12
Retirement Scheme Administrators
Retirement Schemes
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Asset Managers
-
-
3
3
3
Retirement Scheme
Administrators
-
-
5
7
9
Retirement Schemes
-
-
6
13
17
78
Registered Companies
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
New Registrations
3,130
3,458
Dec-09
Dec-10
Dec-11
48,520
51,650
2,818
2,678
Dec-08
70,000
60,000
50,000
45,975
4,016
Dec-12
59,098
55,150
40,000
30,000
Companies on the register
20,000
10,000
0
Dec-08
Dec-09
Dec-08
New registrations
Companies on the
register
Dec-10
Dec-09
Dec-11
Dec-10
Dec-12
Dec-11
2,818
2,678
3,130
3,458
45,975
48,520
51,650
55,150
Dec-12
4,016
59,098 79
ECB Press Release on Growth of MFIs in 2012
Malta Bucks the Trend – Investment Adviser
Austria
Belgium
Bulgaria
Cyprus
Czech Rep
Germany
Denmark
Estonia
Spain
-2.8
-4.1
0
-2.8
-9.0
-2.0
0
-5.4
-8.2
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
-8.2
-9.2
-5.1
0
-2.9
-7.0
0
1.1
-22.4
Malta
Netherlands
Poland
Portugal
Rumania
Sweden
Slovenia
Slovakia
United Kingdom
3
-1.0
-1.0
0.6
-3.6
-11.2
-3.4
-29.5
0
80
Malta and the EU
Taxation
81
Taxation
Malta follows an imputation system of taxation established in 1948. The
system was agreed with the EU under State Aid and Code of Conduct for
Business Taxation in 2007.
Under the system all companies pay tax at 35% of which 6/7 is imputed to
shareholders on declaration of a dividend.
Shareholders of holding
companies get 7/7 refund and shareholders of companies receiving royalty
income get 5/7 refund. In a number of countries, the refund in retaxed
separately from the investment income under CFC legislation.
Anti-abuse and exchange of information mechanisms in place
OECD/G20 classifications of tax havens place Malta on the “white list”
82
Securitisation Vehicles: Tax Neutral
• A securitisation vehicle enjoys tax neutral status thereby optimising the
investors’ return and the originator’s cost of funding. Although, as a rule,
securitisation vehicles are liable to tax in Malta at 35%, substantial
deductions are available which effectively eliminate any taxable income
in Malta. Specifically enacted tax rules clarify that the following
deductions may always be availed of by a securitisation vehicle:
1. Cost of acquisition: Expenses payable to the originator for the
2.
3.
acquisition of securitisation assets or the assumption of risk;
Finance expenses: Premiums, interest or discounts relating to financial
instruments issued, or funds borrowed, to finance the acquisition of
securitisation assets or the assumption of risks;
Operating expenses: Costs incurred in the day-to-day administration of
the securitisation vehicle and the management of the securitisation
assets, including the collection of any relevant claims.
83
EWSM Listings - Taxation
The EWSM was on 18th January 2013 granted
“Recognised Stock Exchange” within the meaning
of the UK Income Tax Act, 2007.
As such , the Quoted Eurobond Exemption applies
for investors.
Non-resident investors do not suffer any tax in
Malta.
84
Malta Double Tax Treaties
EU Countries
Austria
Belgium
Bulgaria
Cyprus
Czech Rep.
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Other
European
Countries
Latvia
Albania
Lithuania
Croatia
Luxembourg
Georgia
Netherlands
Iceland
Poland
Isle of Man
Portugal
Jersey
Romania
Montenegro
Slovakia
Norway
Slovenia
San Marino
Spain
Serbia
Sweden
Switzerland
United Kingdom
Rest of the World
Australia
Bahrain
Barbados
Canada
China
Egypt
Hong Kong
India
Jordan
Korea (Rep.)
Kuwait
Lebanon
Libya
Malaysia
Morocco
Pakistan
Qatar
Saudi Arabia
Singapore
South Africa
Syria
Tunisia
United Arab
Emirates
United States
Uruguay
85
Malta Double Tax Treaties
Signed but not yet
In force
Belgium (Protocol)
Guernsey
Israel
Luxembourg (Protocol)
Mexico
Norway (new treaty)
Russia (being renegotiated)
Singapore (Protocol)
South Africa (Protocol)
Turkey
Awaiting Signature or Under
Negotiation
Armenia
Azerbaijan
Bosnia and Herzegovina
India (new treaty)
Moldova
Oman
Russia (new treaty)
Thailand
Ukraine
Double tax agreements:
signed but not yet in force; initialled/being negotiated
86
Malta and the EU
Creating a finance centre –
Ancillary Services
87
Proposition
• Malta as an emerging financial services location has
proved to be successful in the various financial
services sectors with responsive communication from
the Regulator
• The World Economic Forum Competitiveness Report
[2012-2013] places Malta:
1. 15th for Financial Market Development [LU 12th; IE 108th]
2. 12th for the Regulation of Stock Exchanges [LU 4th; IE 76th]
3. 13th for the Soundness of the Banks [LU 18th; IE 144th]
out of a total of 144 countries.
88
Critical Success Factors
• Well educated/competitive cost pool of labour
• Inexpensive and modern office developments with
•
•
•
•
•
•
capacity
Good telecommunications & IT infrastructure
Very competitive tax regime
Flexible legal and regulatory environment
Well trained Professionals
Multilingual community
Comprehensive Double Tax Treaty network
89
Legal Services
• Malta is a civil law jurisdiction – company law is
based on English law principles. Interpretation of
English text prevails
• Legal framework is therefore flexible, versatile and
able to relate to different legal systems.
• Legal community is well established with many
practitioners obtaining further training overseas
and most firms form part of international legal
networks.
90
Accounting Services
• IFRS
•
•
– International Accounting Standards
applicable since 1997
Major international accountancy firms BDO,
Deloitte & Touche, Ernst & Young, Grant Thornton,
KPMG, PKF, PricewaterhouseCoopers, Mazars,
Ecovis and others operate in Malta
The World Economic Forum Competitiveness
Report [2012-2013] places Malta:16th in Strength
of Reporting and Auditing Standards [Luxembourg
15th and Ireland 66th ] out of 144 countries
91
Conclusion
• Business
environment:
product-driven
jurisdiction,
established banking, insurance and funds industry, sharp
growth in financial intermediation services, easy access to
decision makers, ability to adapt fast to changing
circumstances.
• Cost structures:
cost of human resource, expertise,
quality; productivity levels, taxation
• Strategic
factors:
international perception
language,
geography,
culture,
• Infrastructure:
communications and IT, regulation,
training structures, tax treaties
92
Malta and the EU
Conclusions
93
Our Thinking
We must not think that
we are living in some
kind of glass structure
94
Under the Spotlight
We are being watched:
………there is too much
“talking going on outside
the MFSA......
95
Thank.you!
96