The Malta Financial Services Authority (“MFSA”) has issued a circular on 24th March 2026, introducing significant changes to the regulatory framework governing depositaries, marking a notable step towards simplification, proportionality, and improved data quality within Malta’s investment services sector.
The updates follow a consultation process launched in November 2025 and culminate in a revised Depositary Rulebook alongside a consolidated Depositary Financial Return, both now finalised after industry feedback.
Streamlined Reporting Through Consolidation
A key development is the introduction of a new, harmonised reporting format Appendix 2, which replaces reporting structure under Appendices 2A, 2D, and 2E. The MFSA has significantly reduced the reporting burden by eliminating a substantial number of data sheets:
- 7 out of 13 sheets from Appendix 2A ;
- 1 out of 3 sheets from Appendix 2D; and
- 25 out of 32 sheets from Appendix 2E.
The new format applies to reporting periods starting from 1st January 2026.
Revised Reporting Timelines
The circular also introduces updated reporting frequencies:
- Interim Financial Returns: Now required semi-annually, with submission due within 42 days of the reporting period. The second return must cover a full 12-month period; and
- Custody Sheet: To be submitted quarterly, also within 42 days, with a reduced scope focusing only on essential sheets.
Focus on Data Quality and Digital Submission
The MFSA has emphasised improved data integrity, requiring submissions through the Finhub platform under a dedicated project titled “Appendix 2 – Depositaries.”
Additional clarifications include:
- Use of the official MFSA-issued 4-digit Licence Holder Code in submissions;
- Standardised file naming conventions for reporting periods; and
- Automated prompts within templates to prevent duplicate reporting for entities holding multiple licences.
Removal of Audit Requirement
In a notable shift, the MFSA has removed the obligation for Depositary Financial Returns to be audited by an independent auditor.
Rulebook Amendments Reflect Industry Feedback
The revised Depositary Rulebook incorporates several targeted changes:
- Multiple Licence Clarification: Depositaries that are also licensed as investment firms or credit institutions may be exempt from overlapping requirements where equivalent or stricter rules already apply;
- Call Back Procedure: Enhanced guidance clarifies when this control mechanism must be implemented; and
- Audit Requirement Removed: Reflecting the change in reporting obligations.
Implementation Timeline
The updated rulebook is effective from 24th March 2026, while the new reporting format must be used for future submissions. However, licence holders are instructed not to submit the new Appendix 2 return before 15th April 2026.
Market Impact
These reforms are likely to be welcomed by market participants, particularly depositary institutions managing complex reporting obligations. By reducing duplication, simplifying templates, and removing audit requirements, the MFSA appears to be reinforcing its commitment to a more efficient and risk-based regulatory environment.
