Following the Malta Financial Services Authority’s (the “MFSA”) issue of the ‘MFSA FinTech Strategy’, whereby six pillars were identified, the MFSA issued a Consultation Document on the 4th July 2019, regarding the first pillar, being the ‘MFSA FinTech Regulatory Sandbox’ as well as proposals in relation to Regulatory Technologies (“RegTech”) and Supervisory Technologies (“SupTech”).
The MFSA received a number of responses from industry participants and interested parties and now the MFSA has recently issues its Feedback Statement. This Feedback Statement summarises the feedback the MFSA received whilst setting out the MFSA’s response and position thereto.
Overall, respondents reacted positively towards the MFSA’s proposals in respect to the Pillar 1 Regulations, whereby they highlighted that the Sandbox is a much-needed initiative to foster technological developments occurring within the financial services industry whilst ensuring effective investor protection, market integrity and financial soundness.
Following feedback received, the MFSA updated the Sandbox’s objectives whereby now they include ‘innovation’, ‘sustainability’, ‘certainty’ and ‘knowledge’ which clearly define the aim of the Sandbox, which is that of supporting sustainable financial innovation, ensuring regulatory certainty and promoting knowledge sharing. In the document, the MFSA provided its feedback according to the respondents’ opinions regarding the Sandbox lifecycle stages.
With regards to RegTech, the MFSA clarified that this concept is still in its initial phases. Nonetheless, it shall develop the concept further through more discussions with all stakeholders. Respondents reacted positively towards increasing digitalisation and automation to facilitate compliance with regulatory reporting requirements of authorised entities. As for SupTech, the MFSA looks forward to embracing such innovation and will be setting up an online form whereby parties developing SupTech solutions can approach the MFSA to gauge the areas of interest where this technology is being applied.
The MFSA also proposed draft rules for regulating the Regulatory Sandbox, according to all the feedback received, which at the present are not binding since they are still subject to changes and revisions.
Please do not hesitate to contact us if you require any further information regarding the Regulatory Sandbox.