On 7 January 2022, the Malta Financial Services Authority issued a circular informing the banking sector that: (a) it has revised Banking Rules BR/01, BR/12, BR/14, BR/15 and BR/21 (hereinafter referred to collectively as the "Rules"); and (b) it has issued a new Banking Rule BR/24.
The Rules, except for BR/14, have principally been revised (and Banking Rule BR/24 has been issued), in order to transpose certain provisions of Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capitals conservation measures (CRD V).
The newly issued Banking Rule BR/24 on Internal Governance of Credit Institutions Authorised Under the Banking Act, which is applicable to credit institutions licensed under the Banking Act (Cap. 371 of the Laws of Malta), specifies, amongst others:
(a) the role and composition of the board of directors and committees of credit institutions;
(b) the governance framework of credit institutions;
(c) the risk culture and business conduct of credit institutions; and
(d) the internal control framework and mechanisms of credit institutions.
Furthermore, Banking Rule BR/24 takes into account the EBA Guidelines on Internal Governance (EBA/GL/2021/05) and the EBA Guidelines on product oversight for retail banking products (EBA/GL/2015/18).
The amendments made to the Rules and the newly introduced Banking Rule BR/24 became applicable as from 7 January 2022.
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