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Amidst the constant unfolding of the situation surrounding the COVID-19 outbreak, the Malta Financial Services Authority (“MFSA”) has recently issued a number of circulars targeted at the local financial services sector in general and also sector specific. 

The following is an overview of the COVID-19 related circulars issued by the MFSA between the 10th March and the 13th March 2020:

 A.MFSA General Circulars

a)MFSA expects licensed firms to have in place COVID-19 Contingency and Business Continuity Plans

On the 10th March 2020, MFSA issued a general circular applicable to all local financial services reguslated entities highlighting the MFSA expectations that regulated firms take all reasonable measures in order to have appropriate contingency plans in place to be able to deal with any eventuality and to get in touch through the usual channels should they have any queries relating to the COVID-19 outbreak. The circular also made reference to MFSA’s engagement with the Central Bank of Malta, European Supervisory Authorities, as well with the European Central Bank, to take appropriate actions, in line with identified risks. The circular can be accessed using the following link:

b)Notification about Interim Supervisory Measures

On the 12th March 2020, MFSA issued a general circular advising all local finacial services regulated entities that, until further notice, supervision will be increasing its use of remote data gathering supervisory tools for an interim period, to strengthen its inspection procedures, including increasing and widening the scope of pre-visit documentation requests, issuing questionnaires and conducting Board and Officer interviews via teleconferencing or video link.Notwithstanding, the MFSA will be continuing with its planned schedule of inspections adopting these new procedures, and there will not be postponements unless the specific circumstances require it.The circular can be accessed using the following link:

c)MFSA Warning – Fraudulent Behaviour Linked to COVID-19 Situation

A warning was issued by MFSA on the 12th March 2020 to raise the attention of its licence holders and the general public to possible fraudulent schemes or financial scams which may try to take advantage of COVID-19 outbreak to target entities and individuals with the aim of misappropriating funds and/or obtaining sensitive personal information. Such fraudulent schemes or financial scams may include advice in relation to investments in developing cures, requests for donations, medical and health insurance policies in relation to COVID-19, offers for sale of supplies, use of fake/phishing websites and/or emails with malicious content. The MFSA highlighted the importance that consumers of financial services do not to enter into any financial services transaction unless they have ascertained that the entity with whom the transaction is being made is authorised to provide such services by the MFSA or another reputable financial services regulator. The circular can be accessed using the following link:

B.MFSA Sector-Specific Circulars


Circular for Insurance and Reinsurance Undertakings – Measures in the light of COVID-19 Outbreak

On the 11th March 2020, MFSA issued a circular addressed specifically to all insurance and reinsurance undertakings (“undertakings”) to highlight the Authority’s expectations in this regard and to request such undertakings to provide the Authority with the relevant information identified in the circular by not later than the 18th March 2020.In particular, the circular focused on the following two main aspects:

  • Contingency plans

In light of the COVID-19 outbreak, MFSA expects that undertakings immediately test their contingency plans unless they have not already done so, to ensure:

i.continuity and regularity in the performance of their activities, including outsourced critical or important functions or activities;

ii.that all reasonable steps have been taken to meet regulatory obligations; and

iii.the continued servicing of policyholders (if any) with the least possible interruptions.

The circular further states that, should an undertaking have either not implemented an appropriate contingency plan or should its contingency plan fail to meet at least the expectations of the MFSA, it is required to notify the MFSA and to provide a plan as to how it will be ensuring service continuity, meet its regulatory obligations as well as timelines by when appropriate contingency plans will be in place.

Where the undertaking is servicing retail clients, the MFSA also expects such undertakings to ensure that their continuity of service procedures also address the need of vulnerable customers, in particular those suffering from a relevant underlying medical condition or are of a certain age.

MFSA further advised of its intentions to launch a thematic review to assses the undertakings’ contingency plans.

  • Policy Terms and Conditions

Due to the potential increased number of claims, undertakings servicing retail clients are being required by MFSA to provide the Authority with the following information:

i.Description of the approach which undertakings will be taking with respect to the interpretation of current insurance policies in the context of claims arising due to the COVID-19position on this matter;

ii.Whether they have assessed the impact the aforementioned position would have on current policyholdersi.e. policyholders who have bought their insurance policy before the outbreak of COVID-19 and also regarding the position that will be adopted by the undertaking going forward with regards to new policies;

iii.Whether the distributors of the undertakings’ products have also been made aware of their decisions referred to above. Where any communications have been issued to distributors, undertakings are to provide the MFSA with copies thereof.

Where undertakings are imposing product restrictions in relation to issues and risks arising from COVID-19, these should be communicated to the Conduct Supervision Unit 24 hours in advance of their implementation.

The circular can be accessed using the following link:

2.0Securities and Markets Supervision

Circular on Contingency Planning in light of COVID-19 (Coronavirus)

On the 13th March 2020, MFSA issued a circular addressed specifically to Investment Firms, Custodians, Fund Managers and Collective Investment Schemes (“licence holders”) to highlight the Authority’s expectations in the ambit of the COVID-19 outbreak.In particular, the circular focused on the following main aspects:

  • Business Continuity Plan (“BCP”)

Licence Holders are expected to have in place all the necessary processes and procedures to allow for continuity of their business.MFSA is strongly recommending that:

i.licence holders review and properly test their BCP for its preparedness on any possible actions required to be taken to minimise any potential adverse effects of the spread of COVID-19;

ii.licence holders review their BCPs regarding communicating with customers and investors to ensure that communication disruptions are avoided, in particular in the case of significant market disruptions;

iii.BCPs are updated and communicated to stakeholders and employees. As a minimum disclosure on contingencies shall be provided in writing at account opening stage and posted on the Licence Holder’s website.Any Licence Holder which does not have adequate contingency plans in place or discovers issues during testing of such plans is being requested to inform the Authority immediately.

  • Requirement to hold physical Board Meetings

Licence Holders obliged to hold physical Board Meetings in terms of applicable rules and regulations will be expected to convene meetings with the same prescriptive frequency and to conduct such meetings by way of tele or video conferencing, minuting the discussions held during the Board Meeting as well as the rationale for holding the meeting via conference calls.

  • Communicating with Clients and Investors

In the case where services to clients become temporarily unavailable, Licence Holders are encouraged to upload a notice on their website providing alternative contact points and ongoing updates on how clients can access their accounts. Furthermore, the Licence Holder should consider risks that may arise in the case of an inability to communicate with clients in order to mitigate the risk of lack of communication.

Through this circular, MFSA is drawing to the attention of Investment Firms that they are still under the obligation to comply with the relevant conduct of business requirements in particular to provide investors with comprehensive and factual information on the current scenario in providing investment advice. At all times, Licence Holders are obliged to disclose all possible risks pertaining to investments in such a scenario. Due consideration should also be paid prior to offering, recommending, arranging or providing a product. A regulated person must provide a client with information on the potential effects of volatility in price and fluctuation in interest rates, and/or movement in exchange rates on the value of the investment.

  • Use of Algorithmic Trading

Any Licence Holders making use of computer-driven algorithmic trading systems and preset orders are expected to have measures and procedures in place to ensure that the computerized automatically executed trades based on pre-programmed instructions are switched-off to prevent unnecessary disruptions to ensure that the market integrity is maintained and to avoid adverse implications on investors.

  • Cyber Security

Licence Holders should consider a potential increase in the risk of cyber-attacks due to use of remote working systems and back-up sites. All necessary steps and measures should be taken in order to protect the Licence H by such cyberattacks.

  • Unlawful Disclosure of Inside Information and Insider Dealing

Investment Firms are reminded to take the necessary measures to prevent unlawful disclosure of inside information and/ or insider dealing. Any inside information should be made public in a manner that enables fast access, is complete and can be properly and timely accessed by the public.

The circular can be accessed using the following link:


This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact