MFSA's 2025 Enforcement Drive Reinforces Malta's Regulatory Standards

The Malta Financial Services Authority (MFSA) has published an overview of its Enforcement Function's work in 2025, offering a detailed picture of how the Authority is upholding compliance standards across Malta's financial services sector. Over the year, the MFSA handled 943 potential enforcement cases, issuing 91 enforcement actions and administrative penalties totalling €570,673.

The bulk of enforcement activity centred on regulatory reporting, with 63 penalties, around 69% of all actions, relating to late or non-submission of statutory documentation, 25 of which were resolved through settlement. The MFSA was clear that timely, accurate reporting is a core, non-delegable obligation for all Licence Holders, noting it does not issue reminders and grants extensions only in exceptional circumstances.

Beyond reporting breaches, the Enforcement Function also investigated a range of other matters, including potential unauthorised business, scams, and governance or internal control deficiencies flagged through supervisory work. Safeguarding of client funds emerged as a particular area of focus, with investigations uncovering issues such as inadequate segregation of client funds and irregular reconciliations at certain financial institutions, including payment and e-money institutions. One institution had its licence cancelled during the year, partly due to safeguarding breaches, with further investigations ongoing.

The MFSA outlined its enforcement process as proportionate and transparent, with Licence Holders given the opportunity to make representations at the "Minded Action" stage before any final decision, and settlement options available throughout. Measures available to the Authority range from administrative penalties and directives to licence suspension, cancellation or public reprimand.

Looking ahead, the MFSA reiterated its expectation that Licence Holders maintain strong governance, robust internal controls and full regulatory compliance, underlining its ongoing commitment to protecting consumers and reinforcing confidence in Malta's financial services sector.