The Malta Independent 20 November 2018, Tuesday

MFSA liaising with institutions to rectify Satabank ineligibility

Jeremy Micallef Wednesday, 31 October 2018, 09:27 Last update: about 20 days ago

The Malta Financial Services Authority (MFSA) is liaising with the main domestic credit institutions to rectify the situation at the earliest, a spokesperson for the MFSA informed this newsroom yesterday.

Sources close to the MFSA recently told this newsroom that the companies are insisting with the MFSA that since other local banks do not accept iGaming companies as clients, a replacement for Satabank's services was essential in order for them to continue operating.

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But the MFSA had told Satabank customers that, "If they not have an alternative account (with a credit or payment institution) in an EU/EEA jurisdiction, they are encouraged to set one up as soon as possible".

In light of the situations The Malta Independent asked the MFSA what they are doing to safeguard foreign investments in Malta; and who clients are to contact with their issues, as this newsroom is being informed that clients queries are being directed from entity to entity without receiving any answers.

The MFSA also stated that it has recently carried out a mystery shopping at a number of branches of the main domestic credit institutions. This, amongst other things, was done to "bring clarity on the right of access to a payment account with basic features for consumers who are legally resident in Malta or another Member State of the European Economic Area.

"The MFSA is currently following up to verify the remedial action being taken by the respective credit institutions to address the shortcomings identified by the MFSA during the mystery shopping exercise."

With regards to clients communicating with the appropriate persons, the MFSA reiterated that as detailed in a Public Notice issued on Thursday 25th October, "the Authority has directed the Competent Person, EY to initiate a controlled process for the return of customer deposits over a period of time".

They also wished to inform the public that if they want to keep updated by the Competent Person, they can do so through the Bank's website and via any other means as the Competent Person may deem appropriate.

"All queries are being answered at source between the MFSA or EY on behalf of Satabank."

iGaming companies losing clients is of concern considering the importance of the sector to the Maltese economy. According to recent figures, the iGaming sector contributes €1.2 billion to the Maltese economy, equivalent to 12 per cent of the country's gross domestic product.

The Ernest & Young (EY) auditing firm earlier this month was appointed by the MFSA as the competent body to advise and monitor Satabank in the proper conduct of business. This measure was taken after a joint inspection by MFSA and the Financial Intelligence Analysis Unit found a number of shortcomings in the bank's anti-money laundering procedures.

iGaming clients who spoke to this newsroom said that after this incident they fear their businesses are on the verge of closing down since they can't access or move their funds, or manage their own assets.

In a previous statement, Satabank said that the MFSA had "initiated a controlled process for the return of Satabank customer deposits over a period of time", and that "there remains no access for customers to submit transactions, make withdrawals or close accounts.

"Further details of the process will be made available as they are finalised by the authorities. Where customers have an account with a credit or payment institution in an EU/EEA jurisdiction Satabank would advise that they transfer their banking arrangements to this institution.  Where customers do not have an account with such a jurisdiction the bank encourages them to open one in the same name as their existing account at Satabank.

"Satabank customers now have read only access to view their online account balances."


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