The Malta Financial Services Authority (MFSA) has outlined its Supervisory Priorities for 2025, reinforcing its commitment to financial stability, consumer protection, and market integrity. These priorities align with regulatory developments, EU strategic objectives, and global financial trends to ensure the resilience and compliance of Malta's financial services sector.
Key Supervisory Priorities for 2025
The MFSA has reaffirmed its seven core priorities from 2024 while enhancing its Compliance Outcomes-Based Supervision approach. The key focus areas include:
- Resilience of Supervised Entities – Ensuring financial institutions can withstand economic shocks.
- Sustainable Finance – Strengthening ESG practices and compliance with the Corporate Sustainability Reporting Directive (CSRD).
- Digital Finance – Enhancing cybersecurity and preparedness for the Digital Operational Resilience Act (DORA).
- Governance, Risk & Compliance (GRC) – Strengthening governance and risk management frameworks.
- Financial Crime Compliance (FCC) – Addressing money laundering, terrorist financing (TF), proliferation financing (PF), and sanctions compliance.
- Consumer Protection & Education – Ensuring transparency in financial products, fair complaint handling, and robust marketing practices.
- Cross-Border Supervision – Enhancing international collaboration to oversee entities operating across multiple jurisdictions.
A Stronger Focus on Compliance Outcomes
The Compliance Outcomes-Based Supervision approach, launched as a pilot in 2024, will now expand across all financial sectors. This initiative shifts regulatory efforts towards measurable compliance results in areas such as:
- Banking Sector: Strengthening stress testing, credit risk management, and liquidity adequacy assessments.
- Investment Services: Enhancing governance, outsourcing oversight, and client asset protection.
- Insurance & Pensions: Evaluating risk management, reinsurance governance, and board oversight.
- Capital Markets: Ensuring ESG disclosures align with CSRD and EU Taxonomy Regulation.
- Company Service Providers (CSPs): Improving risk management and director oversight.
Emphasizing Financial Crime Compliance
To combat financial crime, the MFSA is intensifying its scrutiny of Money Laundering Reporting Officers (MLROs) and supervised entities' ability to detect and mitigate sanctions evasion, terrorist financing, and proliferation financing risks.
The Road Ahead: Strengthening Supervision in 2025
With these priorities, the MFSA aims to enhance financial market integrity, safeguard consumers, and promote ESG standards. Supervised entities are urged to review their governance, risk management, and compliance frameworks to align with these expectations.
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