The MFSA's outcomes-based approach to supervision : the importance of outreach

Abstract

This article examines the MFSA’s compliance outcomes based supervisory framework and the use of sector wide “Dear CEO” letters as a supervisory tool. It argues that these letters amplify supervisory impact by extending lessons from inspected firms to an entire sector and that their effectiveness depends on measurable outcomes. Using a three tier assessment framework covering transmission, remediation, and outcomes, the paper shows how regulatory expectations can drive sector wide behavioural change. It concludes that structured outreach provides financial supervisors with a scalable and cost effective way to strengthen supervision, market integrity, and regulatory compliance.