Applications to the Malta Financial Services Authority (MFSA) for licences to operate are missing targets set by the regulator.
Data released in response to a Parliamentary Question revealed that over a quarter (26%) of applications received in 2015 were still awaiting a decision six months after submission, and 6% of the 205 applications received were still pending after a year.
This means that licence applications taking more than six months to deal with have increased by eight percentage points since 2010 when 18% of applications took longer than six months.
The figure for 2015 is still better than 2013, however, when applications exceeding six months peaked at 43% (see below).
|Licence applications still pending after six months||
|Licence applications still pending after 12 months||
MFSA chairman Joe Bannister told Malta Winds that surges in applications could be difficult to manage, with the team handling applications for the MFSA struggling to fill open job vacancies and process enough applications during the holiday period.
“From time to time we fall behind due to a sudden surge of applications, which shows faith in the jurisdiction by financial services operators,” he said. “We are experiencing this at the moment and staff are working extra hours to catch up, particularly during the holiday period.
“There are also a number of vacancies which are taking their time to fill.”
Bannister said that applications are also sometimes delayed because of incomplete information provided by the applicant.
“Because of our direct interaction by meeting applicants individually we tend to receive applications in bits and pieces, sometimes over a period of six months,” he said. “However, it is an open question as to when the submission date is – when the first sections of an application is received or when we receive the final submissions.
“Sometimes applicants also take a long time to reply to our request for clarifications or do not reply to requests for information, and it is unclear whether they have abandoned the application or not but the file has to be kept open for about six months.
“In a lot cases we are dependent on replies from the promoters themselves and also from other regulatory authorities abroad. We carry out an extensive due diligence, because ultimately we have the reputation of the jurisdiction to protect.”
He continued: “We also have to be careful because where we are heading for a rejection the applicant can seek redress through the financial services tribunal, which is independent of the MFSA.”
The MFSA did confirm that the regulator was undergoing a review of the application process to streamline the handling of applications, something Bannister expects to be completed shortly. The regulator has also launched a new fund structure for alternative investment funds, where applications are currently being processed within 10 days of being received.
Bannister added that the figures revealed through the parliamentary question did not reveal the full picture as, while applications for securities needed to be completed within three months, other operations have a longer time limit, such as banking, for which applications need to be completed within six months.
“Unfortunately the Parliamentary Question only gives numbers and no explanations so it is easy to draw conclusions without knowledge of the facts,” he said. “The MFSA promises to deliver to a three month time scale but please note this only applies to securities and not to other areas of financial services.
“There is no intention of misleading promoters or going to a six month period. In all instances we try to work to the time scales requested by applicants.”