The Malta Financial Services Authority is considering raising its authorisation and supervisory fees to reduce dependence on government funding, CEO Joe Cuschieri said.
Speaking at the FinanceMalta conference, he said that the MFSA wanted to become financially independent, noting that it was also expected by international standards to be operationally independent.
The authority intends to enhance its supervisory engagement, which will require investment in technology and human resources. He announced that the MFSA would be investing €10 million between 2019 and 2022, to introduce technological platforms to help with automation of authorisation and supervisory processes.
“We have a vision to establish Malta as an international FinTech hub and are currently assessing viable solutions to foster FinTech and to nurture innovation, particularly with respect to the implementation of a regulatory sandbox and an innovation hub,” he told the packed audience at Portomaso.
A sandbox is a form of testing ground for new business models that are not protected by current regulation, or which are not currently supervised.
A previous speaker, Louis Degabriele – a partner at Camilleri Preziosi Advocates – had been critical of regulatory oversight, saying that overregulation stifles business rather than protect it from abuse.
He analysed a European Commission paper on innovation – the theme of this year’s conference – saying that it focused too much on the dangers of FinTech rather than the benefits.
“It should start with business objectives rather than regulatory objectives. Otherwise it is approaching the issue the wrong way wrong,” he said.
“Regulation has become the only solution to managing risk! It has resulted in a spate of over-regulation and it has suppressed innovation which could have come up with the solutions to the risk, as well as driving down costs.
“Something has to give. Regulators cannot expect operators to invest in innovation while piling on obligations.”
This issue has not flown below the MFSA’s radar. Mr Cuschieri said the MFSA would be setting up a Financial Services Stakeholder Panel as a forum where industry participants could discuss matters falling under the authority’s remit.
The need for more dialogue was also raised by Parliamentary Secretary Silvio Schembri who also announced that a tripartite consultative body was to be set up – the government, the regulator and practitioners – the main aim of which would be to set up 10-year strategy for the financial services sector. However, it would also anticipate problems and find solutions once these arose.