Malta's financial regulator, the Malta Financial Services Authority (MFSA), has issued a "Dear CEO" letter to CEOs and compliance officers of investment companies, calling for greater transparency in the costs and charges of services and products.。

The letter is based on the results of a mysterious shopping campaign to assess the quality and compliance of investment companies in the market.。

The regulator said it is important that licensed entities have controls, processes and procedures in place to ensure that they receive important documentation on services and products that need to be provided to customers in a timely manner before the transaction is completed.。Information on costs and charges should be provided on a voluntary basis and not at the explicit request of the customer。Entities that have an online presence or provide mobile applications must ensure that such information is easily accessible。

Dr Sarah Pulis, Head of Conduct Regulation at the Financial Services Authority, commented:

"As a regulator, we want to know how investors feel and how well investment companies are following the rules.。We have learned a lot from this experience, which helps us to improve the way we market regulation。We also found out what works and what needs to be improved in the industry. "。

The letter also makes several other recommendations。The Authority encourages licensed entities to place continuing education requirements on consultants to equip them with the latest industry knowledge and maintain high standards of professionalism。Consultants should also make it clear to clients whether they are providing consulting services or other services to avoid any misunderstanding。

The Financial Services Authority launched a mystery shopping campaign in 2022 to assess the process by which investment services licensees open accounts for retail customers.。The activity is part of a joint regulatory action coordinated by the European Securities and Monetary Authority at EU level.。It includes face-to-face and online interactions with eight selected companies and uses simulated profiles of retail prospects。

The FSA also issued a circular on the key findings of the 2022 Common Regulatory Action (CSA) and the mysterious shopping activity of the cost and charge information required by MIFID II.。

The FSA encourages investment services firms to conduct gap analyses based on the observations and findings in the report and will continue to monitor the compliance of investment firms with relevant rules and regulations and may engage with specific firms on such matters.。

Dear CEO "Letters are a way for the FSA to communicate directly with the management of its regulated entities, including the board and CEO。Typically, these letters are sent after various regulatory interactions such as thematic reviews and mystery shopping events。The letters are posted on the Financial Services Authority's website。