New fees structure for financial institutions, companies

New fees for the banks, other financial institutions and companies are due to be announced shortly following extensive consultations by the Malta Financial Services Authority, MFSA chairman Prof. Joe Bannister has confirmed.

The changes are the first since adjustments to the fees of the insurance sector were made five years ago.

Some of the fees, such as those for investment services, had remained unchanged since 1994 and the Lm100 company registration fee was introduced many years before.

The new fees schedule, due to be published in the Government Gazette, comes into force on January 1.

It features the introduction of a supervision fee for the banks based on international criteria. The fee will be equivalent to 0.000142 of each bank's deposit liabilities, with the minimum being Lm6,750.

In terms of the new schedule, a credit institution applying for a licence will be charged Lm3,000 and once the licence is granted a licensing fee of Lm5,000 will be charged.

Credit institutions setting up a representative office here will be charged Lm1,000 upon establishment and each subsequent year.

Prof. Bannister revealed that the amount of money that the banks have to deposit with the Central Bank of Malta will shortly be reduced from four per cent to two per cent of deposits.

"The interest that the banks will receive from lending this money at a commercial rate will more than offset the new supervisory fee."

A financial institution applying for a licence will as from January 1 be charged Lm300 as an application and processing fee, and, once the licence is granted, Lm500 as a licensing fee.

The company will also pay an annual supervision fee equivalent to 0.000142 of the total of the items in the balance sheet as reported to the competent authority with a minimum of Lm750.

Several fees are being changed under the Companies Act and the Commercial Partnerships Ordinance.

The new registration fees of any commercial partnership will be as follows:

Where the authorised capital or total contributions do not exceed Lm2,000 - Lm150 (from Lm100 at present);

¤ exceeds Lm2,000 but does not exceed Lm5,000 - Lm150 with the addition of Lm10 for each Lm1,000 or part thereof in excess of Lm2,000; (currently Lm100 rising by Lm6)

¤ exceeds Lm5,000 but not Lm25,000 - Lm180 with the addition of Lm5 for each Lm1,000 or part thereof in excess of Lm5,000; (this bracket to date is between Lm5,000 and Lm100,000 with the fee starting at Lm118)

¤ exceeds Lm25,000 but not Lm100,000 - Lm280 with the addition of Lm5 for each Lm5,000 or part thereof in excess of Lm25,000;

¤ exceeds Lm100,000 - Lm355 with the addition of Lm5 for each Lm5,000 or part thereof in excess of Lm100,000 up to a maximum of Lm750 (currently Lm213, maximum Lm573).

New fees are being introduced for the registration of documents delivered to the Registrar of Companies by overseas companies carrying out business in Malta, the registration of annual returns and registration of documents delivered to the Registrar of Companies by overseas companies.

New fees are also being introduced for recognised investment exchanges, investment services licences, insurers, insurance brokers and intermediaries.

The new fees structure was discussed with the industry - the Malta Insurance Association, the Insurance Brokers Association, the College of Stockbrokers, the Malta Funds Association and the Institute of Financial Services Practitioners.

MFSA chairman Prof. Joe Bannister said when contacted that the MFSA presented everybody with the picture of its costs.

"Everybody knows where the money is being spent. Detailed budgets were available for everybody to see. The organisation is transparent about its costs and it is run as a very tight ship. Salaries are fixed by the board, there are no allowances or fringe benefits. No employee has a mobile phone, everybody travels economy class including the chairman. We are very cost-conscious and conscious that we have to provide a service. "Besides practitioners have all information available free of charge in the website, the registry of companies is online, we also help the industry carry out promotion," he said.

Stockbrokers who have contributed to the compensation fund at the Malta Stock Exchange are having their contribution to the Investor Compensation Scheme discounted by the amount paid into the old fund.

Prof. Bannister said that following successful lobbying by the MFSA, companies licensed under another law would no longer pay the trade licence fee under section four of the Trade Licences Act.

"The MFSA is also actively working on the impact of the Professional Indemnity Insurance costs for Investment Services licence holders and is looking at ways of lessening the cost of this insurance," he said.