The Malta Financial Services Authority (“MFSA”) has issued a new General Code of Conduct for Decision Makers in the Financial Services Industry, marking a significant step in strengthening governance standards, organisational culture, and ethical conduct across Malta’s financial services sector. The Code is designed to promote consistent, transparent, and responsible leadership at the highest levels of regulated entities, reinforcing confidence in the Maltese financial system.
The General Code of Conduct provides a comprehensive framework for individuals occupying decision-making roles within licensed entities. It is firmly grounded in five core values that the MFSA considers essential for fostering trust, stability, and long-term sustainability, not only within individual organisations but across the wider financial services ecosystem.
Setting a New Standard for Professional Integrity
Strong leadership and sound governance remain fundamental to the resilience and credibility of the financial services industry. Through this new Code, the MFSA sets out clear expectations regarding the responsibilities, conduct, and performance standards expected of Decision Makers. By promoting integrity, accountability, and transparency in decision-making, the Code seeks to ensure that decisions are taken in a manner that safeguards the interests of clients, shareholders, and other stakeholders, while upholding the reputation of Malta as a well-regulated financial jurisdiction.
Adherence to the Code is intended to reinforce ethical leadership and support a culture where responsible conduct is embedded into day-to-day operations, rather than treated as a purely regulatory obligation.
The Five Core Values of the Code
At the heart of the General Code of Conduct lie five core values that Decision Makers are expected to actively embed within their organisations:
Integrity
Decision Makers are expected to act ethically at all times, ensuring that decisions are honest, objective, and taken in the best interests of the entity, its stakeholders, and society at large.
Informed and Responsible Decision-Making
The Code encourages leaders to lead by example by basing decisions on robust analysis, sound judgement, and an appreciation of long-term consequences. Consideration of the broader impact on clients, employees, markets, and the financial system is key.
Accountability and Transparency
Decision Makers must take ownership of the outcomes of their decisions and ensure transparency, particularly in relation to financial reporting and disclosures, to present a true and fair view of the entity’s position.
Commitment to Compliance and Legal Standards
A strong emphasis is placed on maintaining effective compliance frameworks, including vigilance in areas such as anti-money laundering, data protection, and the management of emerging risks, including Environmental, Social and Governance (“ESG”) considerations and cyber threats.
Respect and Fairness
The Code promotes an inclusive organisational culture that values diversity of thought, encourages open dialogue, and treats all stakeholders with fairness and respect.
A Proportional and Risk-Based Approach
The MFSA has deliberately structured the Code around the principle of proportionality. Rather than imposing prescriptive rules, it provides a flexible, principles-based framework that can be applied in a manner appropriate to the size, nature, and risk profile of each entity. Importantly, the Code does not replace or override existing legal and regulatory obligations.
Nevertheless, the MFSA has made it clear that adherence to the Code will form part of its supervisory approach. Compliance with the principles may be assessed during regulatory inspections, and any material shortcomings could be taken into account when determining supervisory measures or administrative sanctions.
