Sharing Knowledge series

Jurisdictional risk assessments and customer risk assessments are two pillars of a robust AML-CFT framework.

Jurisdictional exposure plays a crucial role in building an organisation’s risk profile (through the business risk assessment) and the customer risk profile. The type of factors to be taken into account in order to assess jurisdictional risk will impact the final risk rating of that jurisdiction. However, rating jurisdictions from an ML/FT risk perspective is not always enough. In certain instances, organisations need to analyse, at a more granular level, the underlying risks of such jurisdictions and build their control framework taking into account such risks.

In addition, understanding and assessing customer risk is also key to ensuring that the risk-based approach is implemented in the correct manner. In designing the customer risk assessment, organisations need to take into account, amongst other matters, the nature of the relationship with the customer as well as the industry in which the organisation operates. There is no one size fits all, and customer risk assessments should be tailored to the organisation’s business.

To properly implement the risk-based approach, organisations must start by designing effective jurisdictional and customer risk assessments. During the course of this webinar, we will be discussing the factors which are to be taken into account when designing and implementing jurisdictional and customer risk assessment methodologies.

Moderator:
Stephanie Farrugia, Senior Associate

Participants:
Andre Zerafa, Managing Partner
James Farrugia, Partner
Mario Zerafa, Senior Associate

This webinar will update attendees on the recently agreed EU Regulatory Technical Standards regarding Packaged Retail Investment and Insurance Products (PRIIPs) Key Information Documents (KIDs) which are set to come into effect on 1 January 2022 with a particular emphasis on investment funds (retail funds and those targeting qualifying investors). The webinar will also address the impact on UCITS who will (unless extended yet again) shortly need to transition to KIDs from their current UCITS KIIDs.

Moderator:
Stephanie Farrugia, Senior Associate

Participants:
Ria Micallef, Associate
David Borg-Carbott, Senior Associate
Paul Falzon, Regulatory Advisor

Now that various Company Service Providers have come to grips with the authorisation implications introduced by the Company Service Providers (Amendment) Act, 2020 and the revised Company Service Providers Rulebook which apply from 16 March 2021, many who were previously exempt have applied for authorisation and the bulk of those who were already registered have decided to remain registered. These CSPs are now turning their attention more fully to what happens post-application and what they need to introduce or change in order to comply with the revised Rulebook.

Join us as we discuss the requirements to be met by CSPs in terms of the revised Rulebook and what they can do to ensure adequate compliance within the applicable timeframes and on a continous basis thereafter.

Moderator:
Stephanie Sciberras, Senior Associate

Participants:
James Farrugia, Partner
Marina Grech, Senior Associate
Annalise Papa, Senior Associate

CSPs and Trustees are subject persons in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations (“PMLFTR”). They are therefore required to comply with, amongst others, the PMLFTR, the Implementing Procedures and any guidance issued by the FIAU. While most of the core obligations are largely applicable across all types of CSPs and Trustees, their implementation may vary depending on the type of services offered by the CSP and/or the nature of the trust.

Moderator:
Marina Grech, Senior Associate

Participants:
Anthony Cremona, Partner
Mario Zerafa, Senior Associate

Any operation is as strong as its weakest link.The importance of having staff members capable of identifying and addressing the risk, AML and compliance issues faced by that institution is fundamental for an effective first line of defence. The day-to-day implementation of the Company’s risk and compliance frameworks is then subject to the oversight of the second line of defence, which is expected to actively monitor and guide the operating units while reporting to the Board. The overall operations may also be subject to independent scrutiny, through the internal audit function, serving as the third line of defence.The effectiveness of this model depends on ongoing training, meaningful monitoring and reporting and communication. One should not underestimate the role of the board of directors in steering the organization’s systems to achieve these objectives.Join us on this webinar to discuss how the three lines of defence model can be an effective tool to manage institutional risks.

Moderator:
Stephanie Farrugia, Senior Associate

Participants:
Catherine Formosa, Partner
James Farrugia, Partner
Marina Grech, Senior Associate

The Company Service Providers (Amendment) Act, 2020 and the revised Company Service Providers Rulebook which apply from 16 March 2021 have an impact on a wide range of corporate service providers. The implications vary but what is unequivocal is that many CSPs which were formerly exempt in terms of de minimis exemptions are no longer exempt and must apply for authorisation with the Malta Financial Services Authority by no later than 15th May 2021. Additional requirements relating to capital and risk management, among others, also apply to those CSPs who are already registered as such with the MFSA. All authorised CSPs will now also be subject to classification within a particular category and should assess the category that best fits the CSP services they offer.Join us as we discuss the immediate implications arising from this new regime as well as what entities should be focusing on to meet their May 2021 deadline on time.Moderator:
Marina Grech, Senior AssociateParticipants:
James Farrugia, Partner
Stephanie Sciberras, Senior Associate
Annalise Papa, Senior Associate

It is rather self-evident that information and communication technologies play an indispensable role in the financial services industry – even more so during the COVID-19 pandemic which forced all of us to work remotely, and also with the constant rise of cybercrime. In September 2020, European Commission circulated its draft Digital Operational Resilience Act (COM (2020) 595 or DORA) with the main aim of establishing a more streamlined and all-encompassing framework on digital operational resilience. While reinforcing and tying together into one legislative instrument the existing patchwork of several inconsistent and, often unnecessarily duplicated, past EU initiatives which permeate across the financial services world, DORA aims to safeguard the strength and resistance of the financial services infrastructure when such is faced with austere operational disruption.Join us as we discuss the positive outcomes from DORA’s debut, whether the text of the proposal is in need for improvement and what is the outlook and the next steps for DORA.Featured speaker:
Leonard Bonello, Partner

The Investment Firm Regulation (IFR) and Investment Firm Directive (IFD) establish a new prudential regime for investment firms. They are both due to apply from 26 June 2021 and will have an impact on a wide range of investment firms authorised under MiFID II.The implications of the new prudential requirements may vary depending on the type of entity, however the main aim of the requirements is to introduce a new approach towards the calculation of regulatory capital. This will potentially result in increased capital needs which will better capture the risks which investment firms are exposed to.  Additional requirements relating to liquidity, remuneration, governance, disclosures and reporting will also be introduced.Join us as we discuss the main implications arising from this new legislative package as well as what entities should be focusing on to be fully prepared by June 2021.Moderated by:
Stephanie Farrugia, Senior Associate

Participants:
James Farrugia, Partner
Paul Falzon, Regulatory Advisor

It has been almost a year since we started our webinar sessions to guide employers on the various employment issues triggered by the #COVID-19 pandemic.

During this webinar we will take a look at whether employers can oblige employees to take the vaccine and how employers should handle employees who refuse, or are unable, to get vaccinated. Can employers promote vaccination at the workplace and can they give employees incentives to get vaccinated? How should employers treat the time employees use to get vaccinated? Can employers terminate employees who refuse to get vaccinated?

We will also look at the privacy issues which may arise in this context. In particular, can employers collect information on whether employees are being vaccinated and can employers keep copies of these documents?

Featured speakers:
Matthew Brincat, Partner
Lara Pace, Associate
Philip Formosa, Associate

Investment funds are ‘subject persons’. As such they must comply with all AML-CFT obligations. But the day to day application of such obligations is entirely bespoke. From a practical perspective, one must therefore analyse the type of framework investment funds must implement to ensure full compliance with legal and regulatory requirements. Where do their obligations start…and stop? What type of procedures should they implement? What level of scrutiny should they apply on the fund administrator? Join us as we discuss key AML considerations for the funds industry in Malta and in Luxembourg and how investment funds can remain above board in their AML compliance obligations.

Moderated by:
Stephanie Farrugia, Senior Associate

Participants:
Natalia Hernandez, Partner (Ganado SARL)
James Farrugia, Partner
Mario Zerafa, Senior Associate

The entry into force of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “Regulation”) is fast-approaching; with implications for insurance undertakings, intermediaries and pension providers alike. The aim of this webinar is to go through the more salient aspects of the Regulation, as well as its underlying rationale, in order assist providers with compliance thereto (both in the short and longer term).

Luke Hili, Associate
Beppe Sammut, Consultant

In its fight against financial crime, the FIAU has increased its supervisory activities through compliance visits across financial service providers. The effects are already being felt with the enforcement of hefty fines. In light of this, Insurance Distributors should analyse their internal screening systems against financial crimes and ensure they have appropriate controls in place in line with legal and regulatory requirements. The aim of the discussion is to provide operators with an overview of the compliance visits carried out by the FIAU and the FIAU expectations. The presentation will also outline the internal procedures of the operators and ongoing obligations.

Elaine Magri, Associate

AML Compliance: Keeping up the Momentum

The rapid evolution of financial crime requires a dynamic response. A complacent compliance attitude is not acceptable. With AML practices increasingly coming under the spotlight, coupled with the heightened expectations of regulators, subject persons cannot risk becoming facilitators of financial crime through their inaction or unpreparedness.

By adopting a robust compliance culture, implementing an appropriate framework and by engaging people with the right frame of mind, banks and financial institutions will be able to make the grade during compliance visits. Clear and transparent frameworks are a must. The adoption of a top down approach while instilling the right attitude in employees is key for the successful and effective implementation of AML frameworks.

This webinar will give insights into the culture and framework which are to be adopted by banks and financial institutions, focusing on how they can make the grade during regulatory compliance visits.

Mario Zerafa, Senior Associate

Retirement Scheme Administrators and Anti-Money Laundering Compliance – Are you ready?

In its fight against financial crime, the FIAU has increased its supervisory activities through compliance visits across financial service providers. The effects are already being felt with the enforcement of hefty fines. In light of this, RSAs should analyse their internal screening systems against financial crimes and ensure they have appropriate controls in place in line with legal and regulatory requirements.

The aim of the discussion is to provide RSAs with an overview of the compliance visits carried out by the FIAU and the FIAU expectations. The presentation will also outline the internal procedures RSA and obligations on an ongoing basis.

Join our free webinar, forming part of the Sharing Knowledge Series, on the 11 February at 15:30!

Matthew Brincat, Partner
Elaine Magri, Associate

Sustainability related disclosures in financial services

The EU’s ESG initiative aims at reorienting capital flows towards sustainable investments, the management of financial risks arising from environmental and social issues and the fostering of transparency for market participants. The main legislative elements are the Sustainable Finance Disclosure Regulation (‘SFDR’) and the Taxonomy Regulation which outline a series of disclosure requirements. Some aspects of the SFDR will apply to all market participants irrespective as to whether they promote ESG products or otherwise. As initial disclosures must be implemented by the 10 March 2021, market participants need to prioritise such disclosure requirements and should already be considering the implications of the SFDR and the necessary ESG disclosures to be made.

Join us as we discuss the key elements & requirements of the SFDR, how an ESG strategy can contribute to your business and what entities which fall in scope of the SFDR should be doing now.

Moderated by:
Stephanie Farrugia, Senior Associate

Participants
Natalia Hernandez, Partner (Ganado SARL)
Mark Caruana Scicluna, Senior Associate
Paul Falzon, Regulatory Advisor
Neil Bezzina, Associate

Conducting Suitability Assessments of Directors and Key Function Holders: Practical considerations

Supervised entities have the primary responsibility to carry out their own due diligence and suitability assessment prior to the proposed appointment of directors, members of executive management and key function holders. The outcome of the assessment is then to be provided to the competent authority as part of the approval process. Re-assessments should also be undertaken periodically or upon the happening of trigger events.

Although entities differ in structure, size, risk profile and business model, a suitability assessment invariably needs to address assess competence, reputation and integrity, time commitment as well as the independence of mind of the individual in question, whilst also taking into account the specifics of the role being assessed. The webinar will give insights into how an entity should conduct a suitability assessment, primarily against the backdrop of the Joint ESMA and EBA Guidelines on the same subject matter.

Catherine Formosa, Senior Associate