Welcome to the monthly capital markets update, a briefing from our capital markets practice area rounding up the month’s regulatory developments within the equity and debt capital markets and looking ahead to future developments.
Malta Update
UPDATE NUMBER 11/2025/01
The MFSA issued a Feedback Statement outlining the outcome of its consultation on the minimum free float percentage required for companies seeking admission to trading on a regulated market in Malta. The review was triggered by the EU Listing Act, which lowered the EU-wide minimum free float from 25% to 10% in order to make EU markets more attractive and accessible. Given the smaller size and liquidity of the Maltese market, the MFSA initially proposed a tiered system of free float percentage “bands,” tied to minimum numbers of investors and market capitalisation thresholds. This aimed to balance the EU’s objective of reducing listing barriers with the need to safeguard liquidity and market integrity in Malta.
Consultation feedback highlighted a range of concerns, including liquidity risks, the appropriateness of the two hundred investor threshold, the suitability of the market capitalisation thresholds, and the complexity of the proposed bands. Stakeholders also suggested linking free float requirements more closely to offer size, encouraging broader distribution through multiple distributors, and avoiding rules that inadvertently exclude smaller but high-potential issuers.
In response to the feedback, the MFSA introduced a significantly revised “Way Forward”. Instead of fixed percentage bands, the final proposal adopts a flexible, calculation-based approach, centred on a minimum €10 million offer size. Under this model, the required free float equals the €10 million minimum offer size expressed as a percentage of the issuer’s market capitalisation, subject to two boundaries: the free float cannot fall below 10% (to comply with the EU Listing Act) and need not exceed 25% (the traditional upper limit). Issuers falling below 10% must increase their offer size, while those exceeding 25% may reduce it. This approach is designed to incentivise listings, reduce barriers for larger issuers, and maintain market integrity.
The MFSA confirms that the two hundred investor threshold and the requirement to engage five distributors (with exceptions possible) will be included in the revised admissibility criteria. The new framework will take effect following amendments to the Financial Markets Act and the Capital Markets Rules, after which it will form the updated regulatory basis for free float requirements in Malta’s regulated markets.
UPDATE NUMBER 11/2025/02
The rules introduce refined definitions for Sukuk and their underlying structures, formalise the role of the originator, and allow the use of trust vehicles. The MFSA opted for a decentralised Shariah oversight model in which issuers appoint qualified Shariah advisers responsible for annual recertification and ongoing compliance tasks. It retained essential safeguards such as disclosure of Shariah rulings, mechanisms for dealing with non-compliance, clear disclosure of profit-distribution terms, and requirements relating to governing law and risk factors.
Further amendments address listing conditions, structural requirements, and continuing obligations. The MFSA confirmed that special purpose vehicles cannot act simultaneously as issuer and trustee, requiring the appointment of an independent trustee. It strengthened rules on the identification and linkage of underlying assets and retained the requirement for Sukuk holder approval, supported by a Shariah opinion, before any amendments to terms can occur.
Issuers must also provide ongoing reporting on asset performance, disclose changes in Shariah advisers, and obtain professional valuations following significant events.
Overall, the revised framework seeks to balance market development with robust transparency and investor protection, laying the groundwork for Malta’s entry into Islamic capital markets while ensuring consistency with international standards.
European Union Update
There were no updates from an EU regulatory perspective for the month of November 2025.
