On Nov. 7, MLT FSA issued circular on board structure, composition.
MLT FSA issued circular on structure and composition of a Board of Directors notifying license holders of MLT FSA’s expectation and approach on Corporate Governance Code.
The Corporate Governance Code (Code) issued by MLT FSA on Aug. 5, 2022, which addressed expectations regarding the structure and composition of Board of Directors.
This specified the Board should be composed of a combination of Executive Directors, Non-Executive Directors, including at least one Independent Non-Executive Director (INED) taking account of nature, size and complexity of the license holder's business.
License-holders who do not have at least one appointed Independent Non-Executive Director on the Board of Directors are all required to identify an individual to MLT FSA.
This is to satisfy independence requirements within Section 3 Definitions of the Code.
MLT FSA will be adopting a risk-based approach to ensure spirit of the Code is applied in such a way that primarily addresses those areas which require immediate attention whilst allowing an adequate time-frame for all of the other areas which pose less risk.
The overarching objectives are to ensure license holders are governed by a Board of Directors which includes members that exercise independent and impartial judgment.
That collectively and individually be of appropriate caliber, with the skills, diversity of knowledge, judgment, and experience to contribute to the decision-making process.
MLT FSA Requirements
Within six months from date of circular, license-holders that are Retirement Scheme Administrators or Insurance Agents and Insurance Brokers, must identify an individual and submit an online Personal Questionnaire for Authority’s assessment and approval.
It applies to Insurance Agents and Insurance Brokers with premium income of €5m+.
Within maximum of eighteen months from date of circular, remaining Insurance Agents and Insurance Brokers are also required to identify an individual and submit an online Personal Questionnaire for MLT FSA’s assessment and approval, to meet requirements.
MLT FSA's objective is to work toward a mindset and culture embracing and nurturing good governance principles and practices which allow for better alignment to the Code.
MLT FSA recommends all license holders carry out assessment of current composition of their board to ensure that it has all the necessary skills, diversity of knowledge and competencies to contribute to prudent management, and the decision-making process.
Dec. 2023 Reminder
On Dec. 6, 2023, MLT FIN reminded of MLT FSA cir of Nov. 7, 2023, and the obligation to appoint INED for insurance agents, brokers and retirement scheme administrators.
Also reminded of MLT FSA compliance requirements with different relevant deadlines.
