The Malta Financial Services Authority (“MFSA”) has issued its latest Investment Services Supervision Regulatory Briefing covering the period between 29th July 2025 to 28th February 2026. The publication highlights important regulatory and supervisory developments affecting investment firms, Alternative Investment Fund Managers (“AIFMs”), Undertakings for the Collective Investment in Transferable Securities (“UCITS”) managers, depositaries and other financial market participants operating in Malta and across the EU.
The overall direction is clear: regulators continue to prioritise stronger governance, enhanced transparency and more granular supervisory reporting. Firms should therefore assess the operational impact of the changes at an early stage.
Rulebook Updates and Alignment with EU Standards
The MFSA has continued refining its Investment Services Rulebooks to reflect EU requirements. Key updates include:
- Amendments to Money Market Funds in line with European Securities and Markets Authority’s (“ESMA”) stress testing guidelines;
- Benchmarks Regulation updates requiring licence holders to report benchmark usage;
- Completion of the Investment Firms Directive transposition into Maltese law; and
- Rulebook revisions improving clarity, compliance and passporting notifications.
These measures reinforce the MFSA’s focus on supervisory convergence and data accuracy across the sector.
AIFMD II and Depositary Reform
The MFSA is consulting on significant asset management reforms:
- The Alternative Investment Fund Managers Directive II (“AIFMD II”) introduces stricter governance, requiring at least two EU based senior individuals directing the business, stronger conflict of interest safeguards, expanded reporting and a harmonised framework for loan-originating funds. Firms should begin gap analyses ahead of the April 2026 deadline; and
- Depositary Rulebook review aims to modernise oversight, risk management and reporting, raising governance standards for depositaries and fund managers.
Expanded Reporting Requirements
The MFSA has also increased its supervisory data requirements through updates to MiFID firms’ quarterly reporting and the Investment Firms Regulation (“IFR”) European Banking Authority (“EBA”) taxonomy (v4.2). Among the notable changes are:
- Metrics on retail client trends, ESG complaints, and digital platform usage;
- Financial reporting fields such as net cash flow and EBITDA; and
- Mandatory XBRL-CSV submissions from December 2025.
These developments highlight the continued regulatory emphasis on high quality, detailed data and may require firms to enhance their reporting infrastructure.
EU Regulatory Developments
At the EU level, several initiatives are shaping the market:
- ESMA draft standards on loan-originating AIFs (adoption expected by October 2027) and heightened focus on investor outcomes;
- Updated liquidity risk guidance requiring at least two liquidity management tools for UCITS and open-ended Alternative Investment Funds (“AIFs”);
- EBA and ESMA confirmation that the IFR/IFD prudential regime is largely fit for purpose, with targeted refinements planned;
- Upcoming Sustainable Finance Disclosure Regulation (“SFDR”) 2.0 reforms to clarify sustainable finance disclosures and mitigate greenwashing risks; and
- The Market Integration Package under the Savings and Investments Union, aiming to simplify cross-border fund distribution and introduce EU-wide depositary passports.
UCITS and Crypto-Linked Instruments
The MFSA has also reiterated that UCITS may invest up to 10% of NAV in eligible transferable securities linked to crypto-assets, provided that risk management processes are robust, disclosures are clear and redemption obligations remain protected. This confirmation provides useful clarity for managers considering limited digital asset exposure.
The 2026 briefing underscores an accelerating shift toward EU harmonisation, stronger governance and more intensive supervisory reporting. Investment firms, AIFMs, UCITS managers, and depositaries should prepare early, particularly regarding AIFMD II, depositary reforms and enhanced reporting, to remain competitive in Malta’s evolving regulatory environment.
The full MFSA briefing can be accessed here.
