MFSA issues new shareholding policy for credit institutions and insurance companies

In a statement, the MFSA said that the policy set out its assessment of shareholding structures of credit institutions and insurance companies, as well the risk appetite in relation to the assessment of their shareholding structures.

Through the policy, prospective applicants for such licences are advised that the MFSA had no risk appetite for limited shareholding structures that may adversely impact their overall governance, financial soundness and resilience.

The policy, which supersedes another dating back to 2012, provides a comprehensive overview of the authority’s approach to assessing the shareholding structure and explains how it assesses the acquisition of shareholding in prospective and existing credit institutions and insurance companies. It also addresses the impact that this may have on the overall governance arrangements.

The MFSA argued that a robust regulatory assessment process of shareholding structures was critical in ensuring that qualifying shareholders are in a position to carry out their responsibilities and contribute to the effective governance of an institution and its decision making. Its policy seeks to follow and apply the relevant European and national regulatory frameworks.

The policy “complements other efforts being made by the MFSA in promoting good corporate governance practices across the financial services industry,” authority CEO Joseph Cuschieri maintained.