As of yesterday, the Malta Financial Services Authority (MFSA) has issued a circular about the measures for the processing of physical documentation, addressed to all authorised persons and entities, applicants and prospective applicants.

Incoming documentation including Personal Questionnaires (PQs), Regulatory submissions and other documentation is requested to be submitted electronically through the different mediums, whilst all payments for application, authorisation and ongoing licence fees are to be submitted by means of bank transfer.

Outgoing Documentation by MFSA shall be in pdf format or through the relevant MFSA portals where applicable and documentation sent by email should be treated as official MFSA communications.
For further details kindly refer to circular here.

Accountancy Europe has provided a summary of the European country responses to the implications on company reporting as a result of the coronavirus outbreak, focusing on:

• extension of the filing deadlines

• International Accounting Standard 10 Events After the Reporting Period (IAS 10)

• going concern

• International Accounting Standard 36 Impairment of Assets (IAS 36)

• International Financial Reporting Standard 9 Financial Instruments (IFRS 9)

• other governance matters

For more information visit Accountancy Europe.

On 8th April, 2020 the Malta Financial Services Authority (MFSA), through a circular, has referred to the European Insurance and Occupational Pensions Authority (EIOPA)’s statement on dividends distribution and variable remuneration policies in the context of COVID-19 which can be accessed on the MFSA’s website.

Further to the Circular noted below, issued by the Malta Financial Services Authority (MFSA) on 20^th March, 2020 - MFSA is granting Financial Institutions authorised under the Financial Institutions Act one additional month for the submission of the statutory obligations listed here.

Extensions of regulatory reporting deadlines for firms due to outbreak of COVID-19

Taking into account the significant effects of the COVID-19 situation on the financial services sector, the MFSA considers it necessary and proportionate to apply flexibility in the applicable deadlines for the submission of regulatory reporting due over the next months; for which the MFSA has published a Circular on their website, explaining its approach and listing the applicable extensions for the reporting requirements of the sectors below;

• Capital Markets

• Credit Institutions

• Financial Institutions

• Insurance and Reinsurance Undertakings

• Insurance Intermediaries

• Retirement Pensions

• Investment Firms

• Investment Funds and Fund Managers

• Trustees and CSPs

In general, the MFSA will be accepting a delay from the reporting deadline for some of the submissions/publications falling due by March or April 2020.

As at today, reporting deadlines which are due in May or June will remain in place, unless the situation warrants for alternative dates to be communicated, based on the ongoing assessment of events through a close dialogue with the Central Bank of Malta, European Supervisory Authorities, and with the European Central Bank.

The MFSA continues to monitor the situation and in case of developments at local or EU level having an impact on this approach, the MFSA will inform the public of the adjusted approach as soon as possible.

Additional note from MFSA with reference to the attached circular dated 20 March, 2020:

Kindly note that reference to granting extensions is specific to home grown requirements (requirements which have been implemented at jurisdictional level as opposed to requirements which arise from EU Directives), reason being why reference has only been made to the Financial Statements of Guarantors and the publication of the Financial Analysis Summary in case of bond issuers.

Kindly note that with specific reference to EU requirements resulting from EU Directives, in this case the Transparency Directive (TD), with specific reference to the publication of annual and interim financial reports which issuers are required to publish within a specific period of time, the Authority has reached out to the relevant EU competent authority, in order to obtain direction. As at the date of writing of this email, we are still in discussions to obtain such a direction. The intention of the Authority remains of communicating any updates on the current requirements, as soon as we are in receipt of.

Until such time, all the requirements including the timing of publication of the financial information, resulting under the TD, shall continue to apply.   

For any future queries on ongoing obligations, please do not hesitate to contact us on transparency@mfsa.com.mt

The Commissioner for Revenue (CFR) issued the following notices in light of the COVID-19 disruptions:

1. The implications of payroll following the COVID-19 wage supplement measure communicated by the government. Click here for relevant information.

2. Guideline in relation to the deadline of reporting of Financial Account information. Click here for relevant information.

3. Postponement of Payment of Certain Taxes. Click here for relevant information.

Impact of COVID-19 on the Maltese Securities Market

The Malta Financial Services Authority (MFSA) is continuously engaging with the Malta Stock Exchange and is closely monitoring the impact of the recent outbreak of COVID-19 on the local Regulated Market.

Overall the Malta Stock Exchange, as the local Regulated Market, continues to operate in an orderly fashion, and although securities trading on the Maltese Stock Exchange has not been immune to the global trend of a drop in prices, this has not been to the extent of that registered in foreign markets.
In fact, although, during last month, there has been an increase in trading activity, where a number of investors are actively trying to exit the market, to a certain extent, this was counter-balanced by a number of investors who are viewing the current market as an opportunity to invest in the securities at discounted prices.

Information flow in the market is key for investors to make an informed decision especially in time of uncertainty where markets can be extremely sensitive to any piece of information, swaying market sentiment in both directions.

The Authority understands that the current situation has created new challenges to Issuers and their auditors in preparing and auditing financial information. Issuers, especially those in the hospitality, tourism related and retail businesses, are finding it difficult to predict their financial performance given the unknown extent of duration of the present situation, during which measures taken by governments and health authorities to contain this pandemic, will remain in force. On the other hand, government is introducing measures to support businesses and households to alleviate any interruptions in business. These measures, which have been announced in the past weeks, are evolving rapidly and could evolve further.

In response to these challenges, the Authority has taken the following actions to ensure that information continues to flow to investors without adding extra pressure on Issuers during these difficult times:

a. Publication of Circulars The Authority has published a number of Circulars covering the following areas:

1. Publication of relevant significant information concerning the impacts of COVID-19 on the Issuers fundamentals, prospects or financial situation in accordance with the transparency obligations under the Market Abuse Regulation;
2. Regulatory relief regarding reporting requirements applicable in the area of capital markets, specifically the publication of annual audited financial statements of guarantors and the Financial Analysis Summary;
3. Accounting implications of COVID-19 on the calculation of expected credit losses in accordance with IFRS 9; iv. Actions to mitigate the impact of COVID-19 on the EU financial markets regarding the publication deadlines under the Transparency Directive.
   
   

b. Engaging with different stakeholders

The Authority is in regular contact with the Malta Stock Exchange and stockbrokers, Issuers and financial auditors to ensure that information is flowing between different stakeholders who are fundamental to the smooth operations of the Maltese Capital Markets. Issuers are encouraged to maintain an open line of communication with their investors. The Authority is engaging with Issuers, urging them to assess their financial position and publish company announcements in a timely manner to update the market with such an assessment. It is to be noted that a good number of Issuers are releasing company announcements covering the implications of COVID-19 on their business. Company announcements published during March 2020 amounted to around 95 when compared to 46 company announcements published in March 2019. Although some of the company announcements may be considered vague, one has to appreciate that, in certain cases, the full implication of the COVID-19 pandemic on the relevant business may not be straightforward to predict. Some Issuers who are in a position to do so, have confirmed their ability to meet their financial obligations, including the payment of Bond Interest.

In this unprecedented time, it is expected that the content of financial information and the audit work that is done will not be the same as previous years. Auditors are expected to be more attentive to the uncertainty surrounding events or conditions which may cast significant doubt upon a company’ ability to continue as a going concern. Changes may also impact schedules for publication of financial information that had been set before the full implications of COVID-19 were clear. Furthermore, one may expect modified audit opinions where auditors have been unable to gather the necessary audit evidence to complete the audit in full. The Authority is engaging with auditors and the Malta Institute of Accountants to discuss the difficulties being encountered and to discuss feasible solutions.

The Authority continues to monitor developments in the local Regulated Market as a result of the COVID-19 situation and is prepared to use its powers to ensure the orderly functioning of markets, financial stability and investor protection.

The Malta Financial Services Authority (MFSA) has issued circulars in relation to:

• Covid-19 Cybersecurity – Communication for the industry here.

• Covid-19 Cybersecurity – Communication for consumers here.

• Communication on customer protection in the event of disruption, suspension or termination of a product or service here.

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Further to the below, the Malta Financial Services Authority (MFSA) has issued a circular dated 17th April, 2020 on the latest European Securities Markets Authority (ESMA) statement. Circular can be found here.

On 27th March, 2020 the  Malta Financial Services Authority (MFSA) has issued a Circular referring to a statement by the European Securities Markets Authority (ESMA)  on the actions to mitigate the impact of COVID-19 in EU financial markets regarding publication deadlines under the Transparency Directive.

Following the recommendation by ECB noted below, on 27^th July 2020 ECB extended its previous recommendation to credit institutions on dividend distributions and share buy-backs until 1 January 2021. Refer to recommendation and further details in link.

European Central Bank (ECB) asks banks not to pay dividends until at least October 2020. For more information click here.

On 1st April, 2020 the Malta Financial Services Authority (MFSA) has issued a clarification of issues  related to the publication of reports by execution venues and firms here.