Banking & Fintech Newsletter – Issue no.3 (May 2019)

In this issue:

  • EBA publishes clarifications APIs under PSD2
  • MFSA publishes fintech strategy
  • EBA publishes opinion on the nature of passport notifications for agents and distributors of e-money
  • Report on EU loan syndication and its impact on competition in credit markets by the European Commission
  • First nine VFA agents approved by the MFSA
  • EU council measures to minimize risk in the Banking Union
  • MFSA publishes a new credit intermediaries rule
  • MFSA consultation document relating to the Shareholders Rights Directive II
  • An innovative technological reporting tool for banks launched by the MFSA

EBA Publishes Clarifications APIs under PSD2

The European Banking Authority has clarified the third round of issues discussed at the APIs-under-PSD2 Working Group. The supranational authority’s feedback ranged from explanations on the ‘wide usage’ data between EU Member States and eIDAS certificates to the dependence on the certificates by account servicing payment service providers. The feedback also focused on the use by Third Party Providers of agents and outsourcees for accessing payment accounts data.

MFSA Publishes FinTech Strategy

After processing the feedback statement received by the stakeholders in the industry, the Authority has finalised its FinTech Strategy which presents the regulator’s vision and strategy towards developing Malta into a global FinTech hub. The strategy was also influenced by the European Commission’s FinTech Action Plan and its efforts to build a true Digital Single Market.

Strategy

EBA publishes Opinion on the nature of passport notifications for agents and distributors of e-money

An opinion has been recently published by the European Banking Authority relating to the nature of passport notifications of payment institutions and e-money institutions (EMIs) who are using agents and distributors located in another Member State. This Opinion will serve as a blueprint for national regulators in assessing when the use of an agent or distributor either falls within the scope of an ‘establishment’ of the appointing institution in the host Member State, or whether it falls under the free provision of services.

Opinion

Report on EU loan syndication and its impact on competition in credit markets by the European Commission

Last month, the European Commission published its report on the EU syndicated loan sector based on the research undertaken by the research was undertaken for DG Competition of the European Commission. The underlying rationale for this exercise was to conduct a thorough assessment of the loan syndication market and focus on its effectiveness and functioning, while identifying potential competition concerns.

Report

First nine VFA Agents approved by the MFSA

The first VFA Agents under the virtual financial assets framework were registered by the Malta Financial Services Authority. The list of registered agents can be accessed on the Authority’s Financial Services Register. The VFA agent’s filtering role as a gatekeeper is mainly (i) to act as a regulatory intermediary between the VFAO issuers or service providers and the MFSA, and (ii) to certify that such issuer is acting according to the Act and the MFSA rules and regulations.

EU Council measures to minimize risk in the Banking Union

With the main objective to strengthen the banking union and reduce risks in the financial system, the EU Council is currently setting up a range of amendments to the legislative framework which will reduce the negative impacts of potential shocks to the financial system. Inspired by the Basel Committee on Banking Supervision and the Financial Stability Board (FSB), the legislative packages focus on reforms affecting the Capital Requirements Directive and Regulation, the Bank Recovery and Resolution Directive, as well as the Single Resolution Mechanism Regulation.

Press release

MFSA publishes a new Credit Intermediaries’ Rule

The MFSA issued a rule applicable to Credit Intermediaries and Credit Institutions for the purposes of regulations 6 and 18(A) of the Credit Agreements for Consumers relating to Residential Immovable Property Regulations which in turn transpose the Mortgage Credit Directive. This rule focuses on the knowledge and competence requirements for staff of Creditors and Credit Intermediaries in terms of the Mortgage Credit Regulations (SL 378.10). The qualification requirement applicable to Bank staff involved in the selling/promotion of home loans applies as from 21 March 2019.

Circular

MFSA Consultation Document relating to the Shareholders Rights Directive II

The MFSA issued a Consultation on defining Material Related Party Transactions and Disclosure Requirements as required in terms of the Shareholders Rights Directive II. The Authority outlined that while the Listing Rules holistically cover related party transactions, there is still the paucity in the definition of what is “material” in the context of related party transactions. The Consultation, which closes on the 27 May 2019 was triggered following the new requirements under the Shareholder Rights Directive II relating to the disclosure obligations in the context of material transactions with related parties.

Consultation

An innovative technological reporting tool for banks launched by the MFSA

The MFSA is launching a new technological tool which will see a significant change in how the Authority processes prudential and financial information submitted by credit institutions. Data will be automatically processed, validated and subsequently submitted to the European Central Bank in as little as three minutes. This tool facilitates the Authority’s efforts with regards to the requirements established by the European regulation commonly known as the Implementing Technical Standard (ITS) on Supervisory Reporting, which emanates from the notorious Capital Requirements Regulation.