The MFSA has, on 21 May 2024, issued a consultation on the revised Chapter 3 of the Financial Institutions Rulebook (‘FIR/03’) which will be applicable to both payment institutions and electronic money institutions once finalised.  This document aims to be more prescriptive than its predecessors, with rules being included which, inter alia, relate to:

1. requirements for MFSA notification;
2. requirements for the MFSA’s prior approval;
3. prudential requirements;
4. outsourcing requirements; and
5. safeguarding requirements.

It should be noted that, once the consultation is concluded and the new FIR/03 is published, the MFSA is considering the imposition of a 3-month transitory period to enable in scope regulated entities to duly comply with the required rules.

This time-frame is being considered in view of the fact that (i) the rules were mostly clarified to avoid ambiguity or multiple interpretations; (ii) many of the rules were already being applied in practice and discussed during supervisory meetings with the relevant stakeholders for some time, prior to the revision of FIR/03; and (iii) the rules are not implementing any new EBA Guidelines or EU legislation that has not already been in force for some time.

The MFSA has also outlined its commitment to revise other existing financial institution rules as well as issuing new rules applicable to entities registered as account information service providers.

The deadline for such consultation has been set to Monday 17 June 2024 and all relevant stakeholders have been invited to participate.

Author: Paul Falzon