Twelve (12) guiding principles were announced by the European Securities and Markets Authority (“ESMA”) on the 15th of October 2025, when it released its Final Report detailing supervisory expectations for the management bodies. These principles seek to improve transparency, establish oversight, and harmonise governance norms among regulated companies.
The principles include:
- The responsibilities of the management body;
- Accountability and delegation;
- Effective challenge;
- Tone from the top;
- The operation of the management body;
- Effective reporting;
- Control function;
- Record keeping
- Effective leadership;
- Composition;
- Reviewing of effectiveness; and
- Training & recruitment.
The aim of these principles is for common guidance on assessing management bodies during supervisory engagements. ESMA is taking an outcome based approach to supervision, whereby rather than being prescriptive in what it deems management bodies should adhere to.
Malta has by far and large been adopting such principles for a very long time, where the Malta Financial Services Authority, always placed an emphasis on licence holders to have a balanced and effective board, with the role of independent non-executive directors being that of challenging the executive. Training as well record keeping are also pillars which the MFSA places great emphasis on. All in all, this means that Maltese licence holders are by far and large already aligned with such principles.
Nicholas Warren
Head of Risk & Regulatory Compliance (Advisory)
Nicholas began his career at the Malta Financial Services Authority and has over 20 years’ experience in financial services and regulatory affairs. He leads the financial services arm at ARQ Group, supporting clients with the licensing of entities and ongoing regulatory and operational compliance.
His focus areas include investment services, funds, banking and EMIs. Over his career, he has built strong expertise in strategic management and operations. Nicholas is qualified in Banking & Finance, holds the ACCA qualification, and a master’s degree in Business Administration specialising in strategic planning. He also holds certificates in Islamic Finance.
