The Malta Financial Services Authority (“MFSA”) has taken another concrete step towards reducing regulatory reporting burdens on the funds industry. Through a circular issued on 2 February 2026, the Authority announced a series of amendments to the Annual Fund Return (“AFR”), together with corresponding updates to the relevant rulebooks governing Collective Investment Schemes (“CISs”).
These changes form part of the MFSA’s ongoing efforts to simplify regulatory processes, eliminate duplicative reporting obligations, and adopt a more proportionate supervisory approach, while continuing to ensure that the Authority receives adequate and reliable regulatory information.
The MFSA has confirmed that a new version of the AFR, Version 1.11, is now available on its website. This revised return applies to Retail Collective Investment Schemes, Alternative Investment Funds (“AIFs”), Professional Investor Funds (“PIFs”), and Notified Alternative Investment Funds (“NAIFs”), and introduces a number of structural and content-related simplifications intended to streamline the annual reporting process.
One of the most significant changes introduced by AFR Version 1.11 is the removal of several sheets that were previously required as part of the return. These include the portfolio statement sheet, the Sustainable Finance Disclosure Regulation (“SFDR”) sheet, the validation checks sheet, the valuation of assets and liabilities sheet, the income statement sheet, and the statement of financial position sheet. In addition, the MFSA has removed a number of data points previously included in the cover sheet, further reducing the volume of information required to be submitted.
In parallel with the removal of these sheets, the revised AFR introduces enhanced functionality by integrating validation checks directly next to the relevant data points within the return. This approach allows users to identify and address validation errors more efficiently, without the need to consult a separate validation worksheet.
The MFSA has also consolidated certain information that was previously dispersed across multiple sheets into the supplementary documentation sheet. This includes information relating to founder share capital, as well as the total expense ratio and other SFDR-related questions. The consolidation of these data points is intended to improve clarity, reduce duplication, and simplify the overall structure of the return.
Alongside the changes to the AFR itself, the MFSA has implemented an important regulatory update by removing the requirement for CISs to obtain an auditor’s confirmation on the AFR. Historically, CISs were required to obtain an auditor’s report in respect of the income statement and statement of financial position included in the return. In light of the removal of these financial statement sheets from AFR Version 1.11, the Authority has discontinued the requirement for the AFR to be audited.
To reflect this change, the MFSA has amended the relevant provisions across a number of rulebooks applicable to the funds sector. These include the rulebooks governing Alternative Investment Funds, Professional Investor Funds targeting Experienced, Qualifying, and Extraordinary Investors, Notified Alternative Investment Funds, and Malta-based Retail Undertakings for Collective Investment in Transferable Securities (“UCITS”) Collective Investment Schemes. The amendments formally remove the obligation for an auditor’s confirmation specifically in relation to the AFR.
From an implementation perspective, CISs are expected to submit AFR Version 1.11 for all submissions relating to the December 2025 reference period, as well as for any AFR submissions due on or after May 2026. The MFSA has clarified that regulatory submission deadlines and file naming conventions remain unchanged. Market participants are reminded that the Authority had previously issued a circular on file naming conventions on 30 June 2023, which continues to apply.
Overall, these developments reflect the MFSA’s continued commitment to proportional and efficient regulation of Malta’s funds industry. By simplifying the AFR and removing the audit confirmation requirement, the Authority has reduced administrative complexity while maintaining its supervisory objectives. Fund managers, administrators, and compliance professionals should ensure that their internal reporting processes are updated in line with AFR Version 1.11 and the revised rulebook provisions ahead of the upcoming reporting cycles.
At Zerafa Advocates, we advise a broad range of Collective Investment Schemes and service providers on MFSA licensing, ongoing regulatory compliance, and periodic reporting obligations. We assist clients in assessing and implementing regulatory developments, including changes to the Annual Fund Return and related rulebook amendments, and provide ongoing support in dealings with the MFSA. We would be pleased to discuss how these changes may impact your fund structure and compliance framework.
