After taking a leave of absence earlier this year, Joe Gavin will be stepping down as CEO of Malta financial regulator Malta Financial Services Authority (MFSA) later this year. The MFSA, in a brief one-line statement on the matter, did not give an exact date for his planned departure.

Michelle Mizzi Buontempo

In mid June the MFSA announced that Joe Gavin was “indisposed,” without providing a specific reason, but apparently it was to deal with medical related issues. The regulator, which oversees a number of FX and CFD brokers, said at the time that its Board of Governors has appointed its Chief Officer Enforcement Dr. Michelle Mizzi Buontempo as Acting CEO in Mr. Gavin’s absence.

The MFSA did not state if Dr. Buontempo would be taking over for Mr. Gavin on a permanent basis, or if it was going to initiate a formal search for a new CEO.

Joe Gavin was named MFSA CEO in September 2021, following a scandal at the MFSA that led to the ouster of the regulator’s previous CEO, Joseph Cuschieri. Mr. Cuschieri resigned in November 2020 after reports surfaced in the country that he and MFSA general counsel Edwina Licari had gone on an all-expenses-paid trip to Las Vegas with Maltese businessman and casino owner Yorgen Fenech in May 2018. Mr. Gavin was General Counsel at the Central Bank of Ireland between 2009 and 2015.

Separately, the MFSA announced that it has launched a new Corporate Governance Code for MFSA authorised entities. The Code provides a list of guiding principles, complemented with supporting provisions and its application is based on the principle of proportionality.

These principles are designed to enhance the legal, institutional and regulatory framework for good governance in the Maltese financial services sector.  They thus complement the current provisions already in force in the legal and regulatory framework.

The Code’s application on a ‘best-effort basis’ was adopted primarily to ensure a proportionate approach, given that a wide range of entities fall within its scope.  Entities are expected to endeavour to adhere to the Code in a manner that is commensurate with the nature, size and complexity of the entity concerned. The provisions of the Code are without prejudice to any requirements set out in the applicable regulatory frameworks.

Clare Farrugia, Head of Strategy, Policy and Innovation, stated:

The Authority considers good corporate governance as being fundamental for investor protection, market integrity and financial soundness. Furthermore, the Authority believes that the increased supervisory focus and the policy initiatives that the MFSA is implementing in this area, such as this Code, are conducive to steering board members and practitioners alike, to adopt good judgement and in guiding entities in the right direction to achieve a strong corporate governance ethic.

The Code will serve as a benchmark for future policy alignment in evaluating any changes that may be required in the MFSA Rules and existing codes and guidelines, with an overall aim of retaining a balance between prescriptive regulation and ‘soft law’, applicable to the various entities.

The process of drafting the Code started with a Consultation Document, with most respondents welcoming the initiative and the proposal to issue a comprehensive, principles-based Corporate Governance Code. The Authority’s response and positions were highlighted in a Feedback Statement.

A draft Corporate Governance Code was then issued for public consultation, giving stakeholders a further opportunity to provide views, comments and suggestions, prior to it coming into force. A Feedback Statement is today being published, together with the final Corporate Governance Code, on the Authority’s website.

Highlights of the Code

  • Sets out best practice in corporate governance for entities falling within the MFSA’s regulatory remit, by enhancing the legal, institutional, and regulatory framework;
  • Enhances governance structures, improve relations, and strengthen trust with stakeholders;
  • Ensures effective operation of authorised entities’ boards and management;
  • Assist directors and senior management to fulfil their duties;
  • Ensures that authorised entities have adequate and effective internal controls, and procedures to discharge their responsibilities and monitor outcomes;
  • Enhance stakeholder and public confidence in the financial services sector in general;
  • Assist entities to put in place improved governance standards to achieve enhanced resilience and sustainable operations going forward, as well as ensuring ethical behaviour.

This Corporate Governance Code does not apply to MFSA listed entities falling within the scope of the Capital Market Rules, nor to authorised entities which are also listed entities falling within the scope of the Capital Markets Rules, given that these contain more specific provisions in this regard. This Code also does not apply to authorised persons who are natural persons.


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