On the 5th August 2022, the Malta Financial Services Authority (“MFSA”) launched its Corporate Governance Code for MFSA authorised entities (the “Code”). This Code came into being after a process of consultation, where many respondents welcomed the proposal to issue a Corporate Governance Code based on comprehensive principles.
A draft Corporate Governance Code was also issued for public consultation in order for the MFSA to receive stakeholders’ comments and suggestions. Following this process, the MFSA is now launching this Code together with a feedback statement.
The Code lists guiding principles, complemented by supporting provisions applied on the basis of the proportionality principle, in order to enhance the legal, institutional and regulatory framework for good governance in the Maltese financial services sector. Since the Code applies to a wide range of entities, to ensure a proportionate approach the Code is to be applicable on the ‘best-effort basis’. To this end, entities are expected to adhere to the Code in a manner which is appropriate to their nature, size and complexity.
It is expected that the Code will serve as a benchmark for future policy alignment in the evaluation of any changes that may be required in the MFSA Rules, existing codes, and guidelines. The overall aim of this is to retain a balance between prescriptive regulations and ‘soft-law’, and to guiding entities in achieving a strong corporate governance ethic.
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