Regulatory Compliance Quarterly Update | Q1 2026

Introduction

Our Mamo TCV Regulatory Compliance Quarterly Update is intended to keep Maltese regulated entities informed of regulatory changes and developments taking place mainly in the local financial services space.

In this issue, we focus on the sector specific and cross-sectoral regulatory updates relating to Investment Services, Asset Management¹, Insurance, Credit Institutions and Company Service Providers.

Mamo TCV’s team of regulatory and compliance advisors supports authorised persons and their compliance functions to remain compliant with their obligations in the ever-evolving regulatory landscape.

SECTOR SPECIFIC REGULATORY UPDATES

1.0 INVESTMENT SERVICES

1.1 Discontinuation of MFSA LH Portal Submissions for the CBM Investment Funds Statistical Return

On the 15th of January 2026, the MFSA in conjunction with the Central Bank of Malta (CBM), issued a circular informing collective investment schemes of changes to the submission process for the CBM Investment Funds Statistical Return.

These changes follow a joint review aimed at streamline data collection, reducing duplicative reporting, and aligning with the “report once” and “single point of entry” principles. Under the revised framework, the CBM Investment Funds Statistical Return will no longer be submitted to the MFSA through the Licence Holder Portal (LH Portal). Instead, investment funds are required to submit the return exclusively to the CBM via the INFOSTAT portal, after which the CBM will transmit the data to the MFSA through a secure direct data connection.

The revised requirements apply to December 2025 reference data, which are to be submitted by 21 January 2026. For funds with a monthly reporting frequency, the final submission via the MFSA LH Portal is the reference period ending 30 November 2025, whereas all reporting periods ending 31 December 2025 onwards must be submitted solely through the CBM’s INFOSTAT portal. The MFSA has also confirmed that the LH Portal project “CBM Investment Funds Statistical Return” will be disabled, and that any revisions relating to reference periods prior to 30 November 2025 will likewise no longer be accepted through the LH Portal and must instead be filed via the INFOSTAT portal.

1.2 Legal Notice 6 of 2026 titled Malta Financial Services Authority Act (indices used as benchmarks in financial instruments and financial contracts

On the 16th of January 2026, Legal Notice 6 of 2026 was published in the Government Gazette. This Legal Notice amends the Malta Financial Services Authority Act (Indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds) Regulations to align Maltese law with recent amendments to the EU Benchmarks Regulation (EU) 2016/1011, as introduced by Regulation (EU) 2025/914. The amendments primarily implement changes relating to the scope of benchmark rules, the use of third country benchmarks, and enhanced supervisory and reporting provisions.

The Regulations clarify that a “supervised entity” expressly includes an administrator authorised or registered under Article 34 of the Benchmarks Regulation, reinforcing the MFSA’s supervisory remit over benchmark administrators operating under the EU framework. The Regulations also expand the MFSA’s regulatory powers by expressly recognising Article 24a of the Benchmarks Regulation, alongside Articles 24 and 25, in provisions dealing with benchmark oversight; empowering the MFSA to designate benchmarks as “significant” in accordance with Article 24(3) and granting the MFSA authority, where there are reasonable grounds to suspect breaches of Chapter 3A of Title III of the Benchmarks Regulation, to require an administrator to cease, for a maximum period of twelve (12) months, the provision of EU Climate Transition Benchmarks or EU Paris-aligned Benchmarks, including restrictions on the use of those terms in benchmark names and related legal or marketing documentation.

1.3 Amendments to the Annual Fund Return

On the 2nd of February 2026, the MFSA issued a circular announcing amendments to the Annual Fund Return (AFR) as part of its ongoing efforts to reduce the reporting burden on the funds industry. The changes involve both structural simplifications to the AFR and related amendments to the MFSA rulebooks including the removal of the requirement for CISs to obtain an auditor’s confirmation on the AFR.

A new version of the AFR, Version 1.11, is now available on the MFSA website and applies to Schemes Collective (CISs), Investment including Collective Investment Retail Schemes, Alternative Investment Funds (AIFs), Professional Investment Funds (PIFs), and Notified AIFs. The updated version introduces several simplification measures, notably through the removal and consolidation of reporting elements, while improving validation functionality within the return itself.

Key amendments to the AFR include:

• The removal of the portfolio statement sheet; the SFDR sheet; the validation checks sheet; the valuation of assets and liabilities sheet; the income statement sheet; and the statement of financial position sheet.
• The removal of several data points from the cover sheet
• The addition of validation checks next to individual data points to facilitate easier identification of validation errors.
• The integration of data points previously included in other sheets into the supplementary documentation sheet, namely information on founder share capital and the total expense ratio and other SFDR-related questions

In parallel, the MFSA has updated its rulebooks to reflect the removal of the income statement and statement of financial position sheets from the AFR. As a result, the requirement for the AFR to be audited and for an auditor’s confirmation to be obtained has been discontinued. This change applies across multiple regulatory frameworks, including the AIF Rulebook, the various PIF Rulebooks, the NAIF Rulebook, and the UCITS rulebook applicable to Malta based retail schemes.

CISs are required to submit AFR Version 1.11 to the MFSA for all submissions relating to the reference period ending December 2025, or any AFR submissions due on or after May 2026. The MFSA has clarified that existing regulatory submission deadlines and file naming conventions remain unchanged.

1.4 Updates on the IFR EBA Reporting Framework Testing Portal

On the 6th of February 2026, the MFSA published a circular to inform MiFID firms about a testing phase linked to changes in the EBA Reporting Framework, specifically the transition to EBA Taxonomy and ITS version 4.2. This information should be read alongside the Investment Firms Regulation (EU) 2019/2033, Regulation (EU) 2021/2284 and related including regulatory guidance, the Investment Services Supervision Regulatory Briefing on “EBA Reporting Framework 4.2”.

The MFSA announces a dedicated testing window running from 9 to 20 February 2026, during which MiFID Firms are strongly encouraged to participate. Firms may submit test XBRL-CSV files through the LH Portal testing environment, which mirrors the live reporting portal used for regulatory submissions. Existing users of the live LH Portal can access the testing environment using their current credentials.

The exercise is limited to validation of the upload and submission process via the LH Portal. Firms may use dummy or test data, as no binding checks will be performed on the completeness or accuracy of reported data points, and any automated feedback relating to data content should be disregarded. Firms should focus solely on whether files are successfully uploaded and processed. Notwithstanding the above, submitted files are expected to comply with the applicable technical requirements, including correct file structure, naming conventions, and other relevant specifications.

For the purposes of the exercise, firms are required to use the ITS version 4.2 framework, including all applicable templates and naming conventions as published on the EBA website. The circular also reminds firms that the changes to the module in the file naming convention, together with the mandatory use of the XBRL-CSV format will apply to regulatory returns for reference periods on or after March 2026.

1.5 Thematic Review on Compliance and Internal Audit Functions of Management Companies of AIFs and UCITS funds

On the 23rd of February 2026, the MFSA published a Dear CEO Letter addressed to the boards and compliance function holders of AIFMs and UCITS management companies, including self-managed AIFs/UCITS, setting out the main findings, observations and supervisory expectations arising from a thematic review on the adequacy of compliance and internal audit functions.

The review assessed compliance with requirements under the UCITS Directive and AIFMD frameworks as implemented through applicable MFSA rules and licence conditions. The MFSA used a self assessment questionnaire (covering a sample representing around 16% of the total population), thematic meetings with selected firms, and follow-up supervisory engagement to clarify responses.

For the compliance function, the MFSA emphasised the requirement to maintain an appropriate degree of independence taking into account the principle of proportionality, as well as the ability to escalate material compliance matters to the Board and, where necessary, to the Authority. Key weaknesses included insufficiently documented escalation and follow-up of breaches and unresolved issues, over-reliance on informal communication, and policies and procedures not being reviewed at least annually.

Conflicts of interest frameworks were often outdated and the conflicts of interests registers lacked adequate detail and did not clearly evidence mitigation measures, including the nature of the conflict, the parties involved and the measures implemented, prompting expectations for timely updates.

The MFSA also identified gaps in training programmes. Staff training on regulatory developments and compliance responsibilities was inconsistent, and certain compliance reports were found to be incomplete, including instances of incomplete reporting of matters such as breaches of investment and borrowing restrictions and material valuation errors exceeding 0.5% of NAV.

On compliance monitoring, firms’ monitoring plans were not always risk based or supported by a documented and sufficiently granular compliance risk assessment, with unclear testing methodologies and incomplete coverage of key areas including cross-border passporting, websites and marketing materials, delegates, cyber-security, and sustainability risks and disclosures. Weaknesses also arose in documenting remediation, tracking actions and ensuring timely closure, including the absence of formal remediation plans and root cause analysis in certain cases. Board oversight was sometimes poorly evidenced in minutes, with key discussions not constantly documented and delays in follow-up on identified deficiencies, alongside concerns about the absence of adequate security measures (such as encryption) in the circulation of board documentation.

For delegated compliance and internal audit, the MFSA found limited documented oversight of delegates and weak contingency planning for termination or resignation.

Internal audit planning and tracking were often insufficient, and where firms relied on derogations from a separate internal audit function, very limited detail was provided on the alternative assurance arrangements in place, which were not always clearly substantiated.

As a result of the review, the Authority expects firms to perform a documented gap analysis.

1.6 The European Commission’s Targeted Consultation on the Reform of EU Venture and Growth Capital Funds

On the 25th of February 2026, the MFSA issued a circular to inform the relevant industry stakeholders, in particular venture and growth fund managers and the public that the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (“DG FISMA”) of the European Commission (“EC”) has issued a public call for a targeted consultation on the EU venture and growth capital funds reform.

In view of the results of the external study delegated by DG FISMA, the EC has observed that small and mid-sized fund managers encounter issues that impede their growth, scalability and cross-border operations due to fragmented markets and regulatory burdens.

The EC aims to obtain feedback from the relevant stakeholders and utilise the collected data to identify and address any obstacles that may arise from the application of European Venture Capital Funds Regulation (“EuVECA”), the Alternative Investment Fund Managers Directive (AIFMD) and/or jurisdiction specific legal frameworks, policies or other measures regulating investment funds. The purpose of the consultation is to facilitate competitiveness and growth across the EU single market.

Stakeholder responses to the public call for the Targeted Consultation should be submitted directly to the EC by registering via submission link. the The designated Authority encourages all interested stakeholders to participate in this consultation. Kindly note that the EC’s submission deadline is 12 March 2026.

Footnotes

1. Asset Management shall refer to Funds, Fund Managers and their service providers.

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