Publications

MFSA extends Regulatory Reporting deadlines for Regulated Firms due to COVID-19 outbreak

Authors: Caroline Gauci
Published on March 24, 2020
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In light of the COVID-19 outbreak and its effects on the financial services sector, the MFSA has taken a decision to extend some of the regulatory reporting deadlines for the submissions that fall due this month or next month. In this regard, the MFSA has published a Circular, addressed to all regulated entities, explaining its approach and listing the applicable extensions for each sector. The latter have been tabulated below for ease of reference.

COVID-19: The effects on the insurance industry and how to flatten the curve

Authors: Julian Boffa
Published on March 24, 2020
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Practices: Insurance & Reinsurance Corporate
The world is certainly going through turbulent times. This article is being penned whilst the author is under mandatory quarantine and self-imposed isolation, giving him the time and space to reflect on how our world is changing from one day to the next and trying to answer the perennial questions of how this situation came about, why we were not prepared for it and whether we should we have foreseen it. Naturally, these are accompanied by the issue of the solutions to be applied. We should also be asking ourselves what lessons should be learnt, how we can improve things and what the new world will be like. The same questions could, clearly, also be asked of the insurance industry, being that the latter is one of the best risk-sharing mechanisms out there. Finally, we should consider the manner in which this mechanism could help the world’s recovery.

COVID-19: European Central Bank (ECB) announces €750 billion Pandemic Emergency Purchase Programme (“PEPP”)

Authors: Julienne Bencini, Luke Hili
Published on March 23, 2020
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Given the market volatility of the past week or so, the US Federal Reserve recently announced that it would be slashing interest rates to near zero levels - which is as low as it can be without going negative. In addition, it also announced a $700 billion quantitative easing programme to help the economy absorb the negative effects of the coronavirus outbreak. Quantitative easing is a way for the Federal Reserve to inject money into the economy by purchasing assets: in this case $500bn in Treasury Securities and $200bn in mortgage-backed securities. This is the Federal Reserve’s response to the financial crisis; which aims to significantly help mitigate the effects of its aftermath. The European Central Bank (ECB) has also intensified its efforts against the economic onslaught brought about by COVID-19 by launching a €750bn asset-purchase programme of its own – aptly dubbed the "Pandemic Emergency Purchase Programme" (PEPP). After digesting the complexities of the PEPP, many economists in the Eurozone were quick to react by stating that the ECB disappointed expectations, as it has not cut interest rates despite the Eurozone diving towards a possible recession.

Could COVID-19 trigger a ‘force majeure’ event under a Maltese law governed contract?

Authors: Ria Micallef
Published on March 23, 2020
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Practices: Investment Services Regulation
On 11 March 2020, the outbreak of the novel Coronavirus, COVID-19 has been declared by the Director-General of the World Health Organisation to be a pandemic in view of its global spread and severity. There is no doubt that this ongoing pandemic is posing significant issues and challenges for businesses. As the restrictions on movement and international travel in Malta tighten, it may be the case that certain businesses may start struggling to perform obligations under certain contracts and may consider invoking a ‘force majeure’ event.

COVID-19 and EU State aid: Malta’s Aid Measures

Authors: Sylvann Aquilina Zahra, Clement Mifsud-Bonnici
Published on March 22, 2020
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Note to readers: This paper focuses only on the application of the State aid rules to the COVID-19 pandemic and how these rules can ease the resulting economic impact on undertakings. The situation is constantly evolving with measures being pronounced in a span of a few days. To the extent possible, we will do our utmost to update this paper in line with developments.

ESMA Public Statement: Postponement of the reporting obligations under the Securities Financing Transactions Regulation (“SFTR”)

Authors: Ria Micallef
Published on March 20, 2020
In a Public Statement issued by the European Securities and Markets Authority (“ESMA”) on 18 March 2020, ESMA acknowledges that it was made aware of the pressure being made on the financial industry to comply with the new regulatory obligations under Regulation 2015/2365 (“SFTR”) amidst the current challenging times due to the COVID-19 virus.

COVID-19: Taxing Times for the Economy

Authors: Luisa Cassar Pullicino
Published on March 20, 2020
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Practices: Corporate
Over the last week, many countries have announced a variety of economic measures aimed at relieving the distress many businesses are facing due to the coronavirus pandemic. Germany has arguable gone the furthest, by promising unlimited liquidity assistance to small and large businesses alike, along with a massive expansion of loans offered by the state development bank (KfW), with shorter application times and rock-bottom interest rates. France has established a solidarity fund and financial assistance for SMEs cutting-back working hours without terminating employment contracts, and the EU has allocated some 37 billion Euros to fight the health and economic consequences of the coronavirus.