Malta Advances Capital Markets Reforms

Capital Markets is one of the key pillars of the Malta Financial Services Advisory Council’s (MFSAC) strategy, launched in 2023, with the jurisdiction delivering meaningful reforms designed to strengthen its position as a competitive and specialised hub.

At the outset of the strategy, the Capital Markets Working Group identified several persistent concerns among industry participants and significant progress has since been made. The approval structure is being streamlined from three tiers to two, with Executive Committee delegation and additional resources allocated to accelerate application processing. Transparency is being actively enhanced by codifying previously unwritten rules, providing greater certainty for market participants. The Malta Financial Services Authority's (MFSA) role in the primary market is also being refined, with oversight narrowing to objective Prospectus Regulation disclosures while investor protection responsibilities are redirected towards the prudential supervision and enforcement of investment firms acting as intermediaries.

Beyond regulatory reform, Malta is pursuing internationalisation of its capital markets. A comprehensive study, by law firm Simmons and Simmons, is examining opportunities to attract a broader global investor base and deepen Malta's market connections. The study is expected to play a pivotal role in shaping the jurisdiction's next phase of development.

Sustainable finance is another area of focus. The Malta Stock Exchange's Green Market, introduced in 2021, facilitates the listing of Green Bonds in line with International Capital Markets Association (ICMA) principles, while the MFSAC is advancing recommendations to enhance issuer reporting standards and introduce incentives for both issuers and buyers. These standards are also intended to be extended to the Institutional Securities Market. Separately, fiscal incentives for Real Estate Investment Trusts are progressing through the MFSAC Tax Working Group, with final recommendations expected shortly.

The reforms represent a coordinated response to industry feedback, with Malta aiming to deliver unparalleled clarity, efficiency, and a competitive fiscal environment for capital market participants - reinforcing the jurisdiction's broader ambition to become a leading, specialised financial services hub in Europe.

This is the second part in our series focused on the MFSAC interim report. Each week, we will be doing a deep dive on a different sector and the progress made since MFSAC introduced the Financial Services Strategy in 2023.