Risk Management, Own Funds and Own Funds Requirements

Own Funds

The Company is required to disclose the following information regarding its own funds, in accordance with the IFR:

(a) A full reconciliation of Common Equity Tier 1 items, Additional Tier 1 items, Tier 2 items and applicable filters and deductions applied to own funds of the investment firm and the balance sheet in the audited financial statements of the investment firm.

As at 31 December 2023, the Company’s own funds amounted to € 1,362,677 and consisted of Share Capital €279,553, Reserves €41,354, Retained earnings €1,179,641 less deductible Intangible assets €137,871.

The difference between the Company’s own funds of €1,362,677 and Total Equity of €1,500,548 as per published audited financial statements, is €137,871 intangible assets which is a deduction to Common Equity Tier 1.

The disclosure of own funds is being presented in the following prescribed regulatory templates:


Template EU IF CC1.01 – Composition of regulatory own funds
 (a)   (b)
Amounts Source based on reference numbers/letters of the balance sheet in the audited financial statements
Common Equity Tier 1 (CET1) capital:  instruments and reserves                                            
1 OWN FUNDS                 1,362,677
2 TIER 1 CAPITAL                 1,362,677
3 COMMON EQUITY TIER 1 CAPITAL                 1,362,677
4 Fully paid up capital instruments                    279,553
5 Share premium
6 Retained earnings                 1,179,641
7 Accumulated other comprehensive income
8 Other reserves                       41,354
9 Minority interest given recognition in CET1 capital
10 Adjustments to CET1 due to prudential filters
11 Other funds
12 (-)TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1 –                  137,871
13 (-) Own CET1 instruments
14 (-) Direct holdings of CET1 instruments
15 (-) Indirect holdings of CET1 instruments
16 (-) Synthetic holdings of CET1 instruments
17 (-) Losses for the current financial year
18 (-) Goodwill
19 (-) Other intangible assets –                  137,871
20 (-) Deferred tax assets that rely on future profitability and do not arise from temporary differences net of associated tax liabilities
21 (-) Qualifying holding outside the financial sector which exceeds 15% of own funds
22 (-) Total qualifying holdings in undertaking other than financial sector entities which exceeds 60% of its own funds
23 (-) CET1 instruments of financial sector entities where the institution does not have a significant investment
24 (-) CET1 instruments of financial sector entities where the institution has a significant investment
25 (-)Defined benefit pension fund assets
26 (-) Other deductions
27 CET1: Other capital elements, deductions and adjustments
29 Fully paid up, directly issued capital instruments
30 Share premium
32 (-) Own AT1 instruments
33 (-) Direct holdings of AT1 instruments
34 (-) Indirect holdings of AT1 instruments
35 (-) Synthetic holdings of AT1 instruments
36 (-) AT1 instruments of financial sector entities where the institution does not have a significant investment
37 (-) AT1 instruments of financial sector entities where the institution has a significant investment
38 (-) Other deductions
39 Additional Tier 1: Other capital elements, deductions and adjustments
41 Fully paid up, directly issued capital instruments
42 Share premium
44 (-) Own T2 instruments
45 (-) Direct holdings of T2 instruments
46 (-) Indirect holdings of T2 instruments
47 (-) Synthetic holdings of T2 instruments
48 (-) T2 instruments of financial sector entities where the institution does not have a significant investment
49 (-) T2 instruments of financial sector entities where the institution has a significant investment
50 Tier 2: Other capital elements, deductions and adjustments
Template EU IFCC2: Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements
(a) and (b) (c)
(a) Balance sheet as in published/audited financial statements
(b) Under regulatory scope of consolidation
Cross reference to EU IF CC1
As at period end  
AssetsBreakdown by asset classes according to the balance sheet in the published/audited financial statements
1 Non-current assets                                                                        1,013,357
2 Current assets                                                                           984,708
3 Total Assets                                                                        1,998,065
Liabilities – Breakdown by liability classes according to the balance sheet in the published/audited financial statements
1 Non-current liabilities                                                                              16,646
2 Current liabilities                                                                           480,871
3 Total Liabilities                                                                           497,517
Shareholders’ Equity
1 Share Capital                                                                           279,553 4
2 Reserves                                                                              41,354 8
3 Retained earnings                                                                        1,179,641 6
Total Shareholders’ equity                                                                        1,500,548


(b) A description of the main features of the Common Equity Tier 1 and Additional Tier 1 instruments and Tier 2 instruments issued by the investment firm.

The following table describes the terms and conditions of the called up ordinary share capital as at 31 December 2023, this being the only instrument included within the Company’s total own funds.


Template EU IF CCA: Own funds: main features of own instruments issued by the firm
Free text
1 Issuer Jesmond Mizzi Financial Advisors Limited
2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) N/A
3 Public or private placement Private
4 Governing law(s) of the instrument Maltese Law
5 Instrument type (types to be specified by each jurisdiction) Ordinary Shares
6 Amount recognised in regulatory capital (Currency in million, as of most recent reporting date) € 279,553
7 Nominal amount of instrument € 279,553
8 Issue price € 2.33
9 Redemption price N/A
10 Accounting classification Shareholders’ Equity
11 Original date of issuance 9 September 2002
12 Perpetual or dated Perpetual
13 Original maturity date N/A
14 Issuer call subject to prior supervisory approval Yes
15 Optional call date, contingent call dates and redemption amount N/A
16 Subsequent call dates, if applicable N/A
Coupons / dividends  
17 Fixed or floating dividend/coupon Floating
18 Coupon rate and any related index N/A
19 Existence of a dividend stopper No
20      Fully discretionary, partially discretionary or mandatory (in terms of timing) Fully discretionary
21      Fully discretionary, partially discretionary or mandatory (in terms of amount) Fully discretionary
22      Existence of step up or other incentive to redeem No
23      Noncumulative or cumulative Non-cumulative
24 Convertible or non-convertible Non-convertible
25      If convertible, conversion trigger(s) N/A
26      If convertible, fully or partially N/A
27      If convertible, conversion rate N/A
28      If convertible, mandatory or optional conversion N/A
29      If convertible, specify instrument type convertible into N/A
30      If convertible, specify issuer of instrument it converts into N/A
31 Write-down features No
32      If write-down, write-down trigger(s) N/A
33      If write-down, full or partial N/A
34      If write-down, permanent or temporary N/A
35         If temporary write-down, description of write-up mechanism N/A
36 Non-compliant transitioned features No
37 If yes, specify non-compliant features N/A
38 Link to the full term and conditions of the instrument (signposting) N/A


(c) A description of all restrictions applied to the calculation of own funds in accordance with the IFR and the instruments and deductions to which those restrictions apply.

No restrictions were applied to the calculation of the Company’s own funds as at 31 December 2023.

Own Funds and Own Funds Requirement

As at 31 December 2023, the Company’s own funds requirement was determined by the fixed overhead requirement at €727,576, being 25% of the annual fixed overheads of the previous year after distribution of profits. The fixed overhead requirement is the highest of the permanent minimum capital requirement and the total K-factor requirement as indicated in the table below:



Own Funds Requirement being the maximum of 1,2 and 3 below 727,576
1. Permanent minimum capital requirement           150,000
2. Fixed overhead requirement          727,576
3. Total K-Factor Requirement          264,116
               i. Risk to Market – N/A
               ii. Risk to Firm – N/A
               iii. Risk to Client – €264,116

The ratio of own funds of the Company to the Own funds requirement stands at 187%, honouring the minimum conditions as per Article 9 of the Regulation.  The Company measures and assesses that the minimum requirement is met on a regular basis, and as a minimum at the frequency of the regulatory reporting.  The adequacy of the Company’s internal capital is also considered as part of the budgeting process and in the event of a significant activity.

Liquidity Risk

The Liquidity requirement for the Company is €245,525 being one third of the Fixed Overhead Requirement. As at 31 December 2023, the Company held total liquid assets for the value of €921,501. The value of which has been calculated using the applicable haircuts as required by the Investment Firms Regulation. In view that the Company has access liquidity of more than 3 times over the minimum requirement, it is considered that the Company’s exposure to Liquidity Risk is insignificant.


In line with Article 48 of the Investment Firms Regulation, the Company shall disclose information about its internal governance arrangements.  The board of directors of the Company is composed of 8 directors. The following are the number of directorships for each respective board member, as at 31 December 2023:

Board Member Number of Directorships
Mr Michael Gatt 11
Mr Jesmond Mizzi 4
Dr Mark Azzopardi 8
Mr John Catania 2
Mr Mark Camilleri 14
Mr Matthew Von Brockdorff 7
Ms Catherine Calleja 7
Mr Ian Edward Stafrace 1

The Company has in place a diversity policy with regard to the selection of members of the board of directors. The board of directors consists of both executive and non-executive directors who have a background with experience in other regulated bodies as well as professional and business background which all assist in enhancing the composition of the board. The Company believes that diversity of gender goes beyond gender and extends to business and industry skills and experience, professional and industry backgrounds, geographical experience, diversity of thoughts, as well as ethnicity. Additionally, the Company set a target of no less than 12.5% female representation on the Board.

The Company has in place two key committees, the JMFA Risk and Compliance Committee (RCC), as well as the Audit Committee (AC).

The Risk Management Function (second line) is vested in the Risk and Compliance Committee. The RCC carries out an annual internal capital adequacy risk assessment process. Furthermore, the RCC oversees regularly the company’s risk register with a view to ensure that the Company’s risk profile is consistent with the risk appetite set by the Board. The RCC meets at least on a quarterly basis and during 2023, the Committee met 5 times.

The Internal Audit Function (third line), through the audit committee (including the internal auditor) provides objective and independent assurance and advice to the Board, over the governance, processes and systems of internal control and risk management operating in the Company. The AC meets at least on a quarterly basis and during 2023, the Committee met 7 times.

Remuneration Disclosures

The Company is required to disclose to the public, information regarding the remuneration policy and practices, including aspects related to gender neutrality and the gender pay gap, adopted by management for those categories of staff whose professional activities have a material impact on the firm’s risk profile.

The remuneration of the executive directors, senior management or staff who have a material impact on the firm’s risk profile is predominantly a fixed salary but bonuses are paid on an individual basis depending on their personal overall performance and on the overall performance of the Company. In aggregate during the financial year 2023, the fixed remuneration of such individuals amounted to a significantly high proportion of total remuneration. The fixed and variable ratio amounted to approximately 97:3.

The fixed remuneration is established on the role/responsibilities, work experience, and qualifications of the individual concerned. In terms of the variable remuneration (payable at the Company’s discretion), Key Performance Indicators (KPIs) are allocated to individual employees at outset, and at the end of each year assessed through a scoring system based on such KPIs. The employee can also be awarded an additional Company performance bonus, which is solely dependent on Company performance rather than Individual performance.

The Company recognises the importance of avoiding as much as possible conflicts of interest in the remuneration structure and as a policy ensures that the variable element is based on both quantitative and qualitative factors.

The Company has determined that senior management constitutes members of the Executive committee, whilst other management constitute staff who hold managerial positions (such as departmental managers) and/or who have a material impact on the firm’s risk profile.

The firm benefits from a derogation laid down in Article 32 (4) of Directive (EU) 2019/2034 on the basis of both point (a) and (b) of such Directive.

The quantitative information disclosed below pertains to the full financial year ended 31 December 2023 and is a total aggregate remuneration paid by the Company to senior management, risk takers and staff engaged in control functions.

Staff Category Number of Beneficiaries Fixed Variable
Senior Management 7 737,749 13,250
Other Management 7 350,766 16,047

The Company ensures that when remunerating staff it applies gender neutrality and it does not differentiate between staff of “male, female or diverse” genders. This in fact reflected in the remuneration provided to management who have similar or equal seniority roles. Moreover, there is no material gender pay gap between members in a management position.

The Company does not award variable remuneration in the form of shares, share-linked instruments or any other similar types. During the financial year 2023 there were no amounts of deferred remuneration paid, nor severance payments.

The Company has not established a remuneration committee based on the basis of the principle of proportionality. The Board of Directors in its supervisory function adopts and periodically reviews the general principal of the remuneration policy and is responsible for overseeing its implementation.

Version: April 2024