At the helm of the coun­try’s most sen­si­tive and scru­ti­nised in­dus­try

Malta Fi­nan­cial Ser­vices Author­ity CEO JOSEPH CUSCHIERI talks to Rachel At­tard about the chal­lenges fac­ing what has be­come the coun­try’s most sen­si­tive, scru­ti­nised and mul­ti­fac­eted sec­tor, fi­nan­cial ser­vices

The Malta Business Weekly - - NEWS -

MP Ja­son Az­zopardi said in Par­lia­ment that the Malta Fi­nan­cial Ser­vices Author­ity did not ad­e­quately scru­ti­nise Cristo Ge­orgiev, the owner of Sata­bank. Is this the case?

I took note of what Dr Az­zopardi said in Par­lia­ment and I be­lieve that there was an ex­change in Par­lia­ment with Par­lia­men­tary Sec­re­tary Sil­vio Schem­bri re­gard­ing this mat­ter. Hav­ing said that, if Dr Az­zopardi is aware of any in­for­ma­tion which the MFSA may have missed at on-board­ing stage, or is not privy to, he is wel­come to con­tact me to fur­nish me with this in­for­ma­tion.

Why are Sata­bank clients not be­ing ac­cepted else­where. Is it be­cause they are rais­ing red flags?

I am not aware of any such cases.

Why did the MFSA take so long to act on Pi­la­tus?

Reg­u­la­tory ac­tion against any li­censed in­sti­tu­tion takes time due to the work in­volved, le­gal re­views, data and in­tel­li­gence­gath­er­ing and due process, par­tic­u­larly when it comes to the with­drawal of a li­cence. The length of time de­pends on the com­plex­ity of a par­tic­u­lar case.

What is the MFSA do­ing to im­prove Malta’s rep­u­ta­tion in­ter­na­tion­ally – we have been black­listed by OECD and has Malta made any sort of rep­re­sen­ta­tions to re­verse this de­ci­sion?

The MFSA’s trans­for­ma­tion pro­gramme men­tioned ear­lier should ren­der the Author­ity more ro­bust and ef­fi­cient as a fi­nan­cial su­per­vi­sor but we need to en­gage more at in­ter­na­tional level.

What new mea­sures are you putting in place to en­sure that li­cences are only given to com­pa­nies that will abide by reg­u­la­tions?

We are plac­ing risk man­age­ment at the core of our ac­tiv­i­ties. Fur­ther­more, our due dili­gence and crim­i­nal pro­bity sys­tems and checks are cur­rently be­ing au­to­mated and re­formed with the help of in­ter­na­tional ex­perts. This will strengthen our first line of de­fence sig­nif­i­cantly.

What ac­tion has been taken with re­gard to Nexia BT, through BT In­ter­na­tional and BTI Man­age­ment Ltd – with the for­mer be­ing reg­is­tered as be­ing au­tho­rised tions into Mos­sack Fon­seca as its past rep­re­sen­ta­tive in Malta and in the wake of Min­is­ter Kon­rad Mizzi and Keith Schem­bri?

Any ac­tion that may be taken by the MFSA against any li­censed in­sti­tu­tion will be made pub­lic.

The Eu­ro­pean Bank­ing Author­ity ex­pressed con­cern to the MFSA about en­gage­ment be­tween the MFSA and the Fi­nan­cial In­tel­li­gence Anal­y­sis Unit dur­ing the au­tho­ri­sa­tion process and the ro­bust­ness of due dili­gence checks car­ried out as part of the au­tho­ri­sa­tion process. What are you do­ing about this sit­u­a­tion?

We have signed an MoU with the FIAU which has sig­nif­i­cantly im­proved the level and qual­ity of en­gage­ment be­tween the two en­ti­ties. The MFSA and FIAU are work­ing more closely to­gether and the level of col­lab­o­ra­tion is yield­ing bet­ter re­sults and a more co­her­ent ap­proach.

Are there any banks in trou­ble on the hori­zon?

No, but I do not ex­clude any reg­u­la­tory in­ter­ven­tion in the fu­ture if the need arises.

The In­di­vid­ual In­vestor Pro­gramme, on­line gam­ing, crypto cur­ren­cies – are we send­ing a mes­sage that we are a shady juris­dic­tion, know­ing how other coun­tries view these sec­tors. Is Malta get­ting too much at­ten­tion for the wrong rea­sons which, in it­self, at­tracts busi­ness – but not the type to which we should as­pire?

I dis­agree with that state­ment. Our suc­cess in the IIP pro­gramme, on­line gam­ing and crypto as­set space is due to the ro­bust­ness and trans­parency of our le­gal/reg­u­la­tory frame­work and un­der­ly­ing ecosys­tem. Malta’s for­ward-look­ing ap­proach in these sec­tors and our drive to in­no­vate makes Malta an at­trac­tive juris­dic­tion. In my view, Malta is open to good and rep­utable busi­ness: shady out­fits are def­i­nitely not wel­come.

The govern­ment is pre­sent­ing Malta as a cryp­tois­land, but clearly lo­cal banks are very ret­i­cent to open bank ac­counts for the com­pa­nies that are be­ing at­tracted to Malta. Why is this? Is the govern­ment go­ing in one di­rec­tion and the fi­nan­cial in­dus­try in a com­plete op­po­site one?

It is abun­dantly clear that Malta needs more banks to par­tic­i­pate in the de­vel­op­ment of our econ­omy, par­tic­u­larly in the dig­i­tal and Fin­Tech space. I am not happy with the cur­rent sit­u­a­tion on var­i­ous fronts and do­ing noth­ing is not an op­tion for me. Our bank­ing strat­egy and pol­icy re­view to be pub­lished next year will ad­dress this chal­lenge in a holis­tic fash­ion and we will con­sult with all stake­hold­ers be­fore any de­ci­sions are taken.

Why are you in­tend­ing to move the MFSA into new of­fices within the next two years?

Af­ter 25 years, we have al­most out­grown our cur­rent premises, which lack some ba­sic fa­cil­i­ties and are in­ad­e­quate in terms of size, qual­ity and lay­out. With the num­ber of staff ex­pected to reach 480 by the end of 2021, it is time for the MFSA to in­vest in new, modern fa­cil­i­ties.

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