Strengthening governance practices of TCSPs in the EU’s smallest member state

Abstract

In Malta, Trust and Company Service Providers (TCSPs) are subject to sector-specific legislation and regulation, overseen by the Malta Financial Services Authority (MFSA) responsible for their authorisation and prudential supervision. TCSPs act as gatekeepers to Malta’s financial system, playing a pivotal role in ensuring the integrity of financial services. The paper evaluates the outcomes of the MFSA TCSP governance and compliance thematic review within the context of financial supervision in Malta. It aims to: (a) analyse international reports on TCSP risks, informing the rationale for sector regulation; (b) explore the significance of thematic reviews in the MFSA’s supervisory framework; (c) evaluate governance and compliance importance in the MFSA’s supervisory approach and (d) examine principal findings of the review and their sector implications. Contributing to the debate on the nature of financial supervision, the paper argues that the TCSP governance and compliance thematic review underscores a growing recognition among TCSPs of the need for robust compliance culture. However, it highlights persistent deficiencies warranting attention. This academic study sheds light on TCSP regulation and supervision in Malta, emphasising the oversight approach in the EU’s smallest member state.