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nid 94389
Aug 03, 2026
tojuri@vixio.com
Malta
Malta Financial Services Authority
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2193 charsMalta Financial Services Authority Publishes Supervisory Expectations on MiFID II Sustainability Requirements
On August 3, 2026, the Malta Financial Services Authority (MFSA) issued a circular communicating findings from the European Securities and Markets Authority's (ESMA) Common Supervisory Action (CSA) on the integration of sustainability requirements within investment firms' suitability assessments and product governance arrangements under the Markets in Financial Instruments Directive (MiFID II). The CSA, conducted during 2024-2025, assessed how investment firms implemented sustainability-related requirements introduced through amendments to the MiFID II Delegated Acts and related ESMA Guidelines on suitability and product governance.
ESMA's findings identified several areas requiring further enhancement across investment firms' sustainability practices. Key deficiencies include inadequate collection and assessment of clients' sustainability preferences, particularly regarding the granularity, neutrality and consistency of questionnaires and processes; insufficient provision of clear information on sustainability concepts enabling informed decision-making; inconsistent categorisation and governance of financial instruments with sustainability characteristics; incomplete integration of sustainability preferences within suitability assessments, including portfolio-based approaches and handling of preference adaptations when suitable products are unavailable; and inadequate record-keeping, controls and governance arrangements relating to sustainability preferences and product matching.
The MFSA's circular aligns with its May 21, 2025 Dear CEO Letter outlining expectations for MiFID II sustainability compliance. The Authority expects all investment firms and credit institutions providing investment advice and portfolio management services to conduct thorough gap analyses against ESMA's observations and supervisory expectations. Investment firms must implement necessary remedial actions to address identified shortcomings and ensure compliance with applicable regulatory obligations. The MFSA encourages firms to remain informed of ongoing regulatory developments and proactively adapt their frameworks to reflect evolving requirements and supervisory expectations.
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2198 charsMalta Financial Services Authority Publishes Supervisory Expectations on MiFID II Sustainability Requirements
On August 3, 2026, the Malta Financial Services Authority (MFSA) issued a circular communicating findings from the European Securities and Markets Authority's (ESMA) Common Supervisory Action (CSA) on the integration of sustainability requirements within investment firms' suitability assessments and product governance arrangements under the Markets in Financial Instruments Directive (MiFID II).
The CSA, conducted during 2024-2025, assessed how investment firms implemented sustainability-related requirements introduced through amendments to the MiFID II Delegated Acts and related ESMA Guidelines on suitability and product governance. ESMA's findings identified several areas requiring further enhancement across investment firms' sustainability practices.
Key deficiencies include:
Inadequate collection and assessment of clients' sustainability preferences, particularly regarding the granularity, neutrality and consistency of questionnaires and processes.
Insufficient provision of clear information on sustainability concepts enabling informed decision-making.
Inconsistent categorisation and governance of financial instruments with sustainability characteristics.
Incomplete integration of sustainability preferences within suitability assessments, including portfolio-based approaches and handling of preference adaptations when suitable products are unavailable.
Inadequate record-keeping, controls and governance arrangements relating to sustainability preferences and product matching.
The MFSA's circular aligns with its May 21, 2025 Dear CEO Letter outlining expectations for MiFID II sustainability compliance.
The Authority expects all investment firms and credit institutions providing investment advice and portfolio management services to conduct thorough gap analyses against ESMA's observations and supervisory expectations. Investment firms must implement necessary remedial actions to address identified shortcomings and ensure compliance with applicable regulatory obligations.
The MFSA encourages firms to remain informed of ongoing regulatory developments and proactively adapt their frameworks to reflect evolving requirements and supervisory expectations.