Regulated roles

In short. Your approval is personal: it attaches to you, in that role, at that firm. When you leave, the employer must tell the regulator, and the regulator may ask why. Agree the wording of that notification, the timing of your exit against your replacement's approval, and an announcement and reference that match what the regulator is told.

Which roles

The Malta Gaming Authority approves people to perform key functions in a licensed operator, such as the chief executive and the heads of compliance, anti-money laundering, risk or finance. The Malta Financial Services Authority has its own regime for licensed financial firms: people in senior and control roles, usually called approved persons, must pass a fitness and properness assessment before taking up the role. Both are covered by the term key function holder.

The approval sits alongside your other positions. You may also be an employee, a director and an award holder in the same business, and each position ends in its own way. See which roles you hold.

Why the exit is different

• The notification. The employer must tell the regulator that you are leaving, and what it says about you becomes part of the regulator's file.
• Your next approval. When you are proposed for a role elsewhere, the regulator will see that history. A neutral, accurate account of your departure can matter more than almost any other term of the exit.
• Cover for the role. The firm needs someone in the function. Until a replacement is approved, it may need you, which gives you some say over timing.

In practice. Employers sometimes send the notification before the exit terms are agreed, or describe the departure in words that suit an internal dispute. Agreeing the wording first, and the employer's commitment to answer any regulator questions consistently with it, often matters as much as the payment.

What to agree

• the wording of the notification and the reason given for your departure;
• that the employer will answer any questions from the regulator consistently with that wording;
• your leaving date, set against the appointment and approval of your replacement;
• what you will and will not do during any garden leave, since the function still has to be performed by someone;
• a handover that protects you as well as the firm, with a record of what you passed on;
• an internal and external announcement, and a reference, that match what the regulator is told;
• covenants and confidentiality terms that leave you free to answer a regulator truthfully.

In practice. A confidentiality or non-disparagement clause should say that nothing in it prevents disclosures the law protects or requires. An exit agreement cannot take away the protection of the whistleblower law: see protected disclosure.

When the exit is contested

If the employer alleges misconduct or poor performance, or if the exit follows concerns you raised in your role, the regulatory side becomes the most sensitive part of the matter. Take advice before anything is sent to the regulator, and before you send anything yourself. Under Maltese law, disclosing alleged illegal or corrupt activity by the employer to a designated regulator can never be a good and sufficient cause for dismissal.

In practice. A dismissal of a senior person can be costly for the employer when its own procedures are not followed: see Fenech v MFSA. That gives a well-advised executive room to negotiate the terms that matter most, including the regulatory wording.

For employers

Losing a key function holder is a licensing issue as well as an employment one. Plan the replacement and its approval, the interim cover and the notification together, and agree the wording with the departing executive where you can. A departure handled this way is quicker, and less likely to raise questions from the regulator. See services for employers.