Generated
2350 chars
Malta Financial Services Authority Issues Supervisory Findings on MiFIR Compliance Among Investment Firms
On July 21, 2026, the Malta Financial Services Authority (MFSA) published an outcome-based supervisory assessment addressing compliance with transaction reporting obligations under the Markets in Financial Instruments Regulation (MiFIR) (EU) No 600/2014 and the Markets in Financial Instruments Directive (MiFID II) 2014/65/EU. The assessment followed a targeted supervisory exercise conducted during the fourth quarter of 2025, in which the MFSA issued a questionnaire to 20 selected investment firms and credit institutions to evaluate their compliance posture, operational readiness, and governance arrangements.
The supervisory exercise examined three principal areas: internal methodologies and governance for transaction reporting; technical preparedness for MiFIR review reforms; and broader regulatory requirements including pre- and post-trade transparency obligations, trading obligations, algorithmic trading controls, and data protection arrangements. Key findings reveal mixed compliance levels across the sector. While 95 percent of respondents confirmed they have initiated post-implementation compliance reviews to align with MiFIR review requirements, significant gaps persist in specific areas. Only 75 percent of firms reported implementing steps to comply with Article 23 and Article 28 trading obligations for shares and derivatives. Less than half of respondents indicated they have systems to identify and apply permitted waivers and deferrals. Approximately 45 percent of firms had not provided MiFIR-specific training to front-office and compliance staff within 12 months preceding the questionnaire submission, and 70 percent do not evaluate staff on MiFIR requirements as part of performance reviews. Additionally, a considerable proportion of firms indicated they do not publish transaction data through Approved Publication Arrangements (APAs) where required.
The MFSA expects firms to strengthen controls relating to transaction reporting, transparency obligations, outsourcing oversight, algorithm governance, and staff training. The Authority will continue monitoring developments through supervisory reviews and ongoing engagement with entities. Firms should assess whether further enhancements to their internal frameworks are required and demonstrate ongoing commitment to maintaining robust compliance practices.
Published
5554 chars · nid 94157
Malta Financial Services Authority Issues Supervisory Findings on MiFIR Compliance Among Investment Firms
On July 21, 2026, the Malta Financial Services Authority (MFSA) issued a Dear CEO letter on the outcome-based supervisory assessment addressing compliance with transaction reporting obligations under Regulation (EU) 600/2014 (the Markets in Financial Instruments Regulation - MiFIR) and Directive 2014/65/EU (the Markets in Financial Instruments Directive - MiFID II).
The letter sets out the MFSA’s key observations and expectations from a targeted supervisory exercise conducted during the fourth quarter of 2025, in which the MFSA issued a questionnaire to 20 selected investment firms and credit institutions to evaluate their compliance posture, operational readiness and governance arrangements. The supervisory exercise examined three principal areas:
Internal methodologies and governance for transaction reporting.
Technical preparedness for MiFIR review reforms.
Broader regulatory requirements, including pre- and post-trade transparency obligations, trading obligations, algorithmic trading controls, and data protection arrangements.
The key findings cover areas such as, but not limited to, the following:
Internal policies and procedures Observations - all respondents confirmed that they have internal policies and procedures in place that they consider to be aligned with MiFIR and the requirements of Commission Delegated Regulation (EU) 2017/590 . In addition, 95 percent of the respondents indicated that they have initiated a post-implementation compliance review exercise aimed at assessing and signing their internal policies. MFSA expectations - each entity is expected to maintain documented, board-approved, up-to-date policies that clearly allocate responsibilities for MiFIR reporting and recordkeeping; embed first and second-line controls, including escalation and remediation mechanisms; and review and update on a risk-based and proportional basis.
Observations - all respondents confirmed that they have internal policies and procedures in place that they consider to be aligned with MiFIR and the requirements of Commission Delegated Regulation (EU) 2017/590 . In addition, 95 percent of the respondents indicated that they have initiated a post-implementation compliance review exercise aimed at assessing and signing their internal policies.
MFSA expectations - each entity is expected to maintain documented, board-approved, up-to-date policies that clearly allocate responsibilities for MiFIR reporting and recordkeeping; embed first and second-line controls, including escalation and remediation mechanisms; and review and update on a risk-based and proportional basis.
Recordkeeping and transaction reporting Observations - Respondents generally confirmed that documented procedures governing transaction reporting activities are in place, and that periodic updates on the firm’s transaction reporting compliance status are provided to the management body. Comprehensive records are retained in accordance with Article 25 of MiFIR, and access to historical transactions data and recorded communications is limited to authorised personnel only. MFSA expectations - firms are expected to operate end-to-end control frameworks covering all processes under Articles 25-26 of MiFIR, which should include a comprehensive inventory of reportable instruments, clear front-to-back data lineage, and regular reconciliation between internal records and reports.
Observations - Respondents generally confirmed that documented procedures governing transaction reporting activities are in place, and that periodic updates on the firm’s transaction reporting compliance status are provided to the management body. Comprehensive records are retained in accordance with Article 25 of MiFIR, and access to historical transactions data and recorded communications is limited to authorised personnel only.
MFSA expectations - firms are expected to operate end-to-end control frameworks covering all processes under Articles 25-26 of MiFIR, which should include a comprehensive inventory of reportable instruments, clear front-to-back data lineage, and regular reconciliation between internal records and reports.
Trading obligations Observations - the majority of respondents confirmed compliance with Articles 23 and 28 of MiFIR; however, 25 percent reported that the relevant steps have not yet been implemented. MFSA expectations - firms are expected to retain documented assessments evidencing how compliance with Articles 23 and 28 of MiFIR is achieved, including the evidence of venue eligibility, equivalence determination where applicable, and controls to prevent off-venue execution of in-scope instruments.
Observations - the majority of respondents confirmed compliance with Articles 23 and 28 of MiFIR; however, 25 percent reported that the relevant steps have not yet been implemented.
MFSA expectations - firms are expected to retain documented assessments evidencing how compliance with Articles 23 and 28 of MiFIR is achieved, including the evidence of venue eligibility, equivalence determination where applicable, and controls to prevent off-venue execution of in-scope instruments.
Firms are encouraged to consider the observations set out in the letter and to assess whether further enhancements to their internal frameworks are required. The MFSA expects firms to strengthen controls relating to transaction reporting, transparency obligations, outsourcing oversight, algorithm governance and staff training in order to support continued accuracy, timeliness and resilience of regulatory reporting.