A wide-ranging reform of Malta's financial regulator has been law since April, and most of it is still not in force. On 28 August 2026, the Minister responsible for financial services published Legal Notice 231 of 2026, the first commencement notice for the Malta Financial Services Authority (Amendment) Act, 2026. It brings exactly two articles into force: article 4 and article 20.
The headline parts of the reform, including a new Regulatory Decisions Committee, a Capital Markets Decisions Committee and a rebuilt Financial Services Tribunal, are not among them. What did take effect is narrower and more technical: a stronger legal guarantee of the MFSA's independence, and a new framework for how the Authority hires its staff and manages their conflicts of interest.
For anyone who holds or is applying for an MFSA licence, it is worth knowing precisely which is which.
The Act and How It Comes Into Force
Act No. XV of 2026 received presidential assent on 28 April 2026 and was published in Government Gazette No. 21,632 the same day. It started life as Bill No. 168, which, according to the Parliament of Malta's record, had its first reading on 19 January 2026 and its third reading on 22 April 2026. It amends the Malta Financial Services Authority Act, Chapter 330, in 36 articles.
The Bill's objects and reasons list what the reform is for: structural reform of the Authority, including new functions for the Executive Committee, a Regulatory Decisions Committee and a Capital Markets Decisions Committee, reform of the Enforcement Decisions Committee and the Enforcement Directorate, stronger independence and autonomy for the Authority, additional regulatory powers and new offences, and a more independent and effective Financial Services Tribunal.
Article 1(2) of the Act does not set a single start date. It says the Act comes into force "on such date or dates" as the Minister establishes by notice in the Gazette, and that different dates may be set for different provisions. That is why the Act can be on the statute book for four months with almost nothing in force. L.N. 231 uses that power for the first time and brings articles 4 and 20 into force on the date of its publication, 28 August 2026.
Article 4: A Stronger Independence Clause
Article 4 of the amending Act replaces sub-article (3) of article 3 of Chapter 330, the provision that defines the MFSA's independence.
The previous text said that, save as expressly provided by law, the Authority "shall act independently and shall not seek or take instructions from any other body or person".
The new text, now in the consolidated Act, says that in the exercise of its functions and powers the Authority, "including its decision making bodies, shall be autonomous and shall act objectively and independently", and shall not seek or take instructions from, "nor be subject to any interference by", any other authority, body or person.
Four things are new:
- the clause now expressly covers the Authority's decision-making bodies, not just the Authority as a whole;
- the MFSA is described as autonomous;
- it must act objectively as well as independently;
- the ban now covers interference by others, not only the MFSA seeking or taking instructions.
The wording mirrors European law. Directive (EU) 2024/1619, known as CRD VI, inserted a new Article 4a into the Capital Requirements Directive on the "supervisory independence of competent authorities". It requires member states to ensure that competent authorities, their staff and their governance bodies can exercise their powers "independently and objectively", without seeking or taking instructions from supervised institutions, EU bodies, governments or any other public or private body. Member states had to adopt and publish the national measures by 10 January 2026 and apply them from 11 January 2026.
Article 20: How the MFSA Hires, and What Its Staff May Not Do
Article 20 replaces article 13 of Chapter 330, which governs the Authority's officers and employees.
Appointments. Under the old article 13, the Chief Executive Officer appointed the General Counsel and the Chief Officers in consultation with the Board of Governors, and the Executive Committee appointed all other staff. Under the new text, the CEO selects and appoints the Deputy Chief Executive Officers in consultation with the Board, and selects and appoints all other officers and employees under procedures and terms set by the Board. Every appointment must be made on the basis of "published criteria that are objective and transparent", and staff must at all times be persons of integrity and good conduct.
Conflicts of interest. The new article 13(2) obliges the MFSA to put in place policies, rules, prohibitions and arrangements to prevent conflicts of interest of its staff "in accordance with" the Capital Requirements Directive. At a minimum, they must cover conflicts arising through:
- trading in certain financial instruments; and
- being employed by, or accepting any contract for professional services with, entities identified in the MFSA's policies, "during an established period of time".
That second point is the Maltese version of what CRD VI calls a cooling-off period. Article 4a of the directive requires member states to prohibit supervisory staff, for a period, from being hired by institutions they were directly involved in supervising, by entities providing services to those institutions, and by lobbying firms targeting the supervisor. The directive sets minimum lengths: at least six months for staff directly involved in supervising the institution, at least 12 months for members of the governance body, and at least three months for lobbying roles. Member states may allow a shorter minimum of three months for supervisory staff where a longer period would, among other things, unduly restrict the authority's ability to hire, "in particular taking into account the small size of the national labour market".
Limits on the limits. The new article 13(3) requires the MFSA's rules to be proportionate to each employee's role, to apply only as long as reasonably necessary, and to cover former employees as well as current ones. Staff must declare financial holdings that could raise conflict concerns and dispose of them "or otherwise, as may be prescribed". The rules may provide exceptions and compensation as the directive allows, must not breach workers' rights or fundamental rights, and must not unduly restrict the Authority's ability to supervise. That last group of safeguards reflects the derogation language of the directive almost word for word.
The Act does not itself set the length of any cooling-off period for MFSA staff. That is left to the policies the MFSA must now put in place.
What This Changes for Licence Holders
For a licensed firm, articles 4 and 20 change no reporting duty, no capital requirement and no fee. Their effect is indirect, but it is real.
Hiring from the regulator gets more complicated. Malta's financial services sector is small, and people move between the regulator and the firms it supervises. Once the MFSA's conflict policies are in place, a supervisor who was directly involved with your firm may be barred for a period from joining it, or from taking a consultancy contract with it. If you plan to recruit from the MFSA, ask about cooling-off obligations before you make an offer.
The same applies to advisers. The prohibition in the directive also reaches entities providing services to supervised institutions. A law firm, audit firm or consultancy that serves licence holders and wants to hire MFSA staff will face the same question.
The independence clause is a legal standard. A clause that expressly bans interference and extends to the MFSA's decision-making bodies gives licence holders, and the Authority itself, a clearer basis to point to if a regulatory decision appears to have been shaped by outside pressure.
For a broader picture of what the MFSA regulates and how licensing works, the explainer on the MFSA covers the structure as it stood before the reform.
What Is Not Yet in Force
Everything else in Act XV still waits for a commencement notice. The main pieces are these.
A Regulatory Decisions Committee. Article 15 of the Act inserts a new article 10A into Chapter 330. The committee would take over licensing and supervisory decisions: considering applications, issuing licences and other authorisations, monitoring compliance, reviewing supervisory findings and taking regulatory measures, including urgent ones. The text expressly denies it the power to modify, restrict, suspend or cancel a licence or to impose an administrative penalty.
A Capital Markets Decisions Committee. A new article 10B would give a separate committee responsibility for implementing capital markets and listing policies set by the Board of Governors.
A restructured enforcement and tribunal system. Article 16 replaces the article on the Enforcement Decisions Committee, which would act "impartially and independently" from the Authority's other organs. Article 29 rewrites the article on the Financial Services Tribunal, with panels chaired by an advocate of at least twelve years' standing and members with financial services expertise, and a list of people who may not serve, including licence holders and their directors, officers and employees.
A wider definition of financial services. Article 3 would redefine "financial services" to include, among other things, services related to crypto-assets and the business of trustees, trusts and company service providers.
None of these has a start date yet. Until the Minister publishes further commencement notices, the existing structure of Chapter 330 continues to govern who decides licence applications, supervisory measures and penalties, and how appeals are heard.
What to Watch
For licence holders and applicants, three things are worth tracking over the coming months.
- The MFSA's conflict-of-interest policy. Article 13 as now in force requires it. The length of cooling-off periods and the list of restricted entities will determine how much the rules affect hiring.
- The next commencement notice. The decision committees change who takes decisions on licences and supervisory measures. If you have an application in the pipeline, for example for an EMI licence, the date on which the Regulatory Decisions Committee takes over will matter.
- The tribunal reform. Anyone considering an appeal against an MFSA decision should check which version of article 21 applies on the date of the decision.
For the financial and fintech sector, and for anyone who has dealt with the practical side of banking on the island, the regulator's standing matters as much as its rulebook. Articles 4 and 20 are the first parts of the reform to become law in practice, and both concern that standing: who the MFSA answers to, and who works for it. The structural changes that licence holders will feel most directly are still to come.
Work with Sebastian
If you want to work out how these rules apply to your own company, trust or personal position in Malta before the next deadline, book a consultation.
