The Malta Financial Services Authority (MFSA) has published
findings from inspections conducted between 2020 and 2024. These inspections
targeted investment services providers licensed under Malta’s Investment
Services Act. The main goal was to assess compliance with the EU’s Market Abuse
Regulation (MAR).
The review covered a range of firms but is particularly
relevant to CFD brokers and other providers of leveraged trading to retail
clients licensed under the Act.
Insufficient Training Raises Market Abuse Risks
“These inspections form part of the Authority’s broader
supervisory strategy aimed at raising industry standards and fostering a
culture of compliance ,” said Lorraine Vella, Head of Capital Markets
Supervision.
The MFSA identified several gaps in how firms monitor and
report suspicious trading activity. Some lacked adequate systems to detect
suspicious orders. Others failed to submit any Suspicious Transaction and Order
Reports (STORs), despite operating in active trading environments.
Concerns were also raised over staff training. In several
cases, training was infrequent or insufficient, increasing the risk that
employees might overlook signs of market abuse. This issue is particularly
relevant for fast-moving platforms such as CFDs.
You may find it interesting at FinanceMagnates.com: Fake
MFSA Letters Demand Fines From Bitcoin and Ethereum Traders, Regulator Warns.
MFSA Calls for Updated Procedures
Firms must update their procedures to match their specific
trading risks, including those with large retail client volumes or algorithmic
trading.
“Firms are expected to assess the adequacy of their current
frameworks, update their procedures, and provide targeted staff training to
close any identified gaps,” Vella added.
MFSA carries out over 470 investigations in 2023, a quarter of which relate to scams and unauthorised business https://t.co/kZeonNHnyi via @businessmalta pic.twitter.com/QEzFn3MUBk
— Malta Business Weekly (@BusinessMalta) June 11, 2024
MFSA Investigations Target Scams, Unlicensed Firms
The MFSA
conducted 474 investigations in 2023, with over 25% involving suspected
unauthorized financial activity or scams. These cases included unlicensed
platforms, clone companies, and other potentially harmful schemes. Most
enforcement actions related to late submissions of statutory documentation,
while others involved governance, market abuse, and financial crime.
The MFSA
imposed 60 administrative penalties totaling €444,800. It also introduced new
internal policies to improve transparency and proportionality in enforcement.
In a separate update, the regulator warned of risks tied to finance-related
content on social media platforms.
The Malta Financial Services Authority (MFSA) has published
findings from inspections conducted between 2020 and 2024. These inspections
targeted investment services providers licensed under Malta’s Investment
Services Act. The main goal was to assess compliance with the EU’s Market Abuse
Regulation (MAR).
The review covered a range of firms but is particularly
relevant to CFD brokers and other providers of leveraged trading to retail
clients licensed under the Act.
Insufficient Training Raises Market Abuse Risks
“These inspections form part of the Authority’s broader
supervisory strategy aimed at raising industry standards and fostering a
culture of compliance ,” said Lorraine Vella, Head of Capital Markets
Supervision.
The MFSA identified several gaps in how firms monitor and
report suspicious trading activity. Some lacked adequate systems to detect
suspicious orders. Others failed to submit any Suspicious Transaction and Order
Reports (STORs), despite operating in active trading environments.
Concerns were also raised over staff training. In several
cases, training was infrequent or insufficient, increasing the risk that
employees might overlook signs of market abuse. This issue is particularly
relevant for fast-moving platforms such as CFDs.
You may find it interesting at FinanceMagnates.com: Fake
MFSA Letters Demand Fines From Bitcoin and Ethereum Traders, Regulator Warns.
MFSA Calls for Updated Procedures
Firms must update their procedures to match their specific
trading risks, including those with large retail client volumes or algorithmic
trading.
“Firms are expected to assess the adequacy of their current
frameworks, update their procedures, and provide targeted staff training to
close any identified gaps,” Vella added.
MFSA carries out over 470 investigations in 2023, a quarter of which relate to scams and unauthorised business https://t.co/kZeonNHnyi via @businessmalta pic.twitter.com/QEzFn3MUBk
— Malta Business Weekly (@BusinessMalta) June 11, 2024
MFSA Investigations Target Scams, Unlicensed Firms
The MFSA
conducted 474 investigations in 2023, with over 25% involving suspected
unauthorized financial activity or scams. These cases included unlicensed
platforms, clone companies, and other potentially harmful schemes. Most
enforcement actions related to late submissions of statutory documentation,
while others involved governance, market abuse, and financial crime.
The MFSA
imposed 60 administrative penalties totaling €444,800. It also introduced new
internal policies to improve transparency and proportionality in enforcement.
In a separate update, the regulator warned of risks tied to finance-related
content on social media platforms.
This post is originally published on FINANCEMAGNATES.
