The Malta Financial Services Authority (MFSA) ramped up enforcement efforts in 2024, concluding 387 investigations and imposing 134 enforcement actions, including nearly €1 million in penalties.
In a statement on Wednesday, the MFSA said that the bulk of these stemmed from non-submission of statutory documents, with the investment services sector drawing the highest level of scrutiny.
The figures were released in an in-depth enforcement report following the publication of the MFSA’s 2024 Annual Report, highlighting the authority’s drive to ensure that actions taken are “fair, proportionate, dissuasive and effective.”
Throughout 2024, the MFSA worked on 612 active investigations, 220 of which involved unauthorised persons or entities – often linked to financial scams.
“In 2024, we significantly strengthened our efforts to investigate individuals and entities potentially offering financial services in Malta without the required authorisations,” Head of Enforcement at the MFSA Edward Grech said.
“The MFSA remains resolute in its message: any unauthorised financial services activity will be taken seriously and addressed through appropriate enforcement action,” he continued.
The most targeted sectors were: Investment Services (187 investigations), Company Service Providers (91) and Capital Markets (43), the statement said.
Nearly half of all investigations related to failures to submit statutory documentation.
Other recurring breaches included governance and internal control weaknesses, failings in fitness and properness assessments, breaches of market abuse regulations, and market manipulation.
60% of ongoing investigations were concluded in 2024, and of the 134 enforcement actions taken, 120 were tied to non-submission of mandatory statutory documents.
This issue continues to hamper the MFSA’s supervisory ability, the Authority said. It said that timely reporting enables the MFSA to monitor compliance across financial services providers and take swift action where needed.
While some sectors showed improved reporting compliance, others remained stagnant, with the investment services and insurance and pensions sectors seeing the highest number of penalties, the MFSA said.
In total, penalties issued during the year amounted to €926,485 – a marked increase compared to previous years, the MFSA said.
In 38 of the concluded cases, the MFSA entered into settlement agreements with license holders, resolving investigations swiftly in line with its 2022 settlement policy.
Under its publication policy, the MFSA said it can publish enforcement actions on its website. In certain cases, enforcement may be published anonymously, for instance, when public disclosure would cause disproportionate damage or when breaches are minor and penalties are under €30,000.
However, it said that anonymity is not granted when cases are appealed before the Financial Services Tribunal or become subject to judicial proceedings, as the identity of the individuals or entities involved becomes public.
The MFSA said that the goal of enforcement is not just to penalise but also to educate those in breach and deter future violations. Sanctions can range from public reprimands and directives to licence suspensions or cancellations, it said.
Commenting on the Authority’s enforcement stance, MFSA’s Chief Enforcement Officer Michelle Mizzi Buontempo said that during 2024, the Authority continued working on raising greater awareness of the standards that should guide the activities and conduct of operators in the financial services industry.
“We are committed to continue fostering a strong compliance culture, with a focus on transparency in our processes as well as ensuring proportionality in our approach,” she said.
The MFSA’s full 2024 enforcement overview is available on its official website.