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 02/2026/01
Malta has enacted Act I of 2026 – The Various Laws (Corporate Sustainability Reporting) (Amendment) Act, 2026, introducing amendments to various pieces of Maltese legislation in order to implement the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) (CSRD).
The Act forms part of the EU’s broader initiative to enhance corporate transparency and accountability on environmental, social and governance (ESG) matters. It establishes the legislative basis for the introduction of sustainability reporting obligations applicable to certain undertakings operating in Malta.
In particular, the Act amends existing legislative frameworks governing corporate reporting to ensure alignment with the CSRD. Under the new regime, in-scope undertakings will be required to include sustainability-related disclosures within their management reports, covering matters such as environmental impacts, social and human rights considerations, and governance issues affecting their operations and financial position.
The Act is complemented by Legal Notice 39 of 2026 – the Corporate Sustainability Reporting Regulations, 2026, which sets out the detailed rules governing sustainability reporting in Malta and further transposes the requirements of the CSRD into domestic law.
Together, these measures introduce a new sustainability reporting framework in Malta, reflecting the EU’s shift towards integrating sustainability considerations into corporate disclosure and financial reporting practices.
European Union Update
UPDATE NUMBER 02/2026/02
The European Commission has launched a public consultation and call for evidence on the evaluation and possible review of the Shareholder Rights Directive (Directive 2007/36/EC), as amended by SRD II.
The consultation forms part of the EU’s broader strategy to strengthen capital markets integration and facilitate cross-border investment and remains open until 6 May 2026.
Purpose of the Evaluation
The Shareholder Rights Directive aims to enhance shareholder engagement and strengthen corporate governance in EU listed companies. It establishes rules enabling shareholders to:
- Participate effectively in general meetings;
- Exercise their voting rights;
- Receive relevant company information in a timely manner; and
- Engage with companies on governance and remuneration matters.
The Commission is now assessing whether the Directive continues to meet its objectives, particularly in light of evolving market structures and the increasing importance of cross-border investment within the EU.
Key Areas Under Review
The consultation seeks to evaluate the Directive against several criteria, including relevance, effectiveness, efficiency, coherence and EU added value.
A central focus is the identification of barriers affecting the exercise of shareholder rights across Member States, particularly where shares are held through cross-border intermediaries.
Common issues being examined include:
- Difficulties in shareholder identification;
- Inefficiencies in information flows between companies, intermediaries and shareholders;
- Practical challenges in cross-border voting and participation in general meetings; and
- The role of financial intermediaries and market infrastructures in facilitating shareholder engagement.
Stakeholder Participation
The Commission is seeking feedback from a broad range of market participants, including:
- Listed companies and issuers
- Institutional and retail investors
- Asset managers and shareholders
- Market infrastructures and intermediaries
Stakeholders are invited to share views on:
- Obstacles encountered when exercising shareholder rights across borders;
- Fragmentation resulting from divergent national implementation of SRD rules;
- Possible improvements to shareholder engagement mechanisms; and
- Opportunities to modernise processes, including through digitalisation of disclosure and participation.
Potential Areas of Reform
Depending on the outcome of the evaluation and a subsequent impact assessment, a future legislative proposal could focus on:
- Improved shareholder identification systems and communication channels;
- Simplified cross-border voting procedures and participation in general meetings;
- Greater clarity regarding the roles and responsibilities of intermediaries; and
- Measures to reduce administrative costs and delays associated with cross-border investment.
Next Steps
The consultation will remain open until 6 May 2026, after which the Commission will analyse stakeholder feedback and carry out a broader evaluation and impact assessment.
Any legislative proposal to revise the Directive could follow later in 2026 or in 2027.
Given the Directive’s central role in corporate governance, shareholder engagement and cross-border investment, the outcome of this review may lead to significant developments in the EU’s capital markets framework.
UPDATE NUMBER 02/2026/03
The European Securities and Markets Authority (“ESMA”) published a consultation paper proposing amendments to the Guidelines on delay in the disclosure of inside information under the Market Abuse Regulation (“MAR”).
This consultation follows legislative amendments introduced through the EU Listing Act, which will apply from 5 June 2026.
The Malta Financial Services Authority (“MFSA”) subsequently issued a circular notifying market participants of the consultation and encouraging stakeholders to submit feedback directly to ESMA.
Background: Changes Introduced by the Listing Act
The Listing Act has amended the MAR disclosure framework with the aim of simplifying the regime for issuers.
Key changes include:
- Protracted processes – intermediate steps in extended processes (such as negotiations or transactions) will no longer require disclosure. Only the final event or circumstance giving rise to inside information must be disclosed.
- Revised delay condition – the requirement that delayed disclosure “must not mislead the public” has been replaced. Under the new rule, delayed information must not contradict the issuer’s most recent public announcement or communication on the same matter.
- Reduced record-keeping for SME Growth Market issuers – such issuers will benefit from simplified obligations when documenting explanations for delayed disclosure.
ESMA’s Proposed Amendments to the Guidelines
To align the Guidelines with the revised legal framework, ESMA is proposing several targeted changes.
Removal of legitimate interests relating to protracted processes
Because intermediate steps will no longer require disclosure, ESMA proposes removing most existing examples of “legitimate interests” that previously justified delaying disclosure.
These currently include scenarios such as:
- M&A negotiations
- Corporate restructurings
- Intellectual property developments
- Supervisory approvals
Possible retention of financial distress scenario
ESMA is consulting on whether to retain the legitimate interest allowing delay where an issuer’s financial viability is in grave and imminent danger, and immediate disclosure could jeopardise recovery negotiations.
New examples of legitimate interests for delay
The consultation proposes introducing clearer examples consistent with the revised framework, including situations where delay may be justified:
- Where an issuer must comply with a confidentiality order issued by a public authority (e.g. procurement processes, national security or public health matters);
- Where additional information must be gathered before disclosure, for example following a major operational incident or cyber-attack;
- Where disclosure could cause an issuer to lose a business opportunity in a competitive procurement process by revealing sensitive commercial terms.
Deletion of guidance on misleading the public
In light of the legislative amendment, ESMA proposes removing the current Guideline addressing situations where delayed disclosure may mislead the public.
Consultation Timeline
- Consultation closes: 29 April 2026
- New MAR disclosure regime applicable: 5 June 2026
- Final ESMA Guidelines expected: Q4 2026
Practical Implications for Issuers
The revised framework is likely to have several practical effects:
- Issuers may rely less frequently on delayed disclosure in protracted processes.
- Greater emphasis will be placed on assessing whether delayed information contradicts prior market communications.
- Boards, compliance teams and company secretarial functions should review internal policies and procedures relating to inside information and delayed disclosure ahead of the June 2026 implementation date.
UPDATE NUMBER 02/2026/04
ESMA issued a Public Statement regarding the implementation of IFRS 18 – Presentation and Disclosure in Financial Statements, followed by an MFSA circular on 24 February 2026 highlighting key considerations for issuers.
IFRS 18 will apply from 1 January 2027 (with early adoption permitted) and must be applied retrospectively, meaning 2026 comparatives will need to be restated. Ahead of adoption, issuers are expected to include IAS 8 disclosures on the expected impact of IFRS 18 where material, with the MFSA indicating that such disclosures will be a supervisory focus during the 2026 reporting cycle.
The standard introduces a new structure for the statement of profit or loss, categorising income and expenses into Operating, Investing and Financing, and requiring two new subtotals: Operating profit and Profit before financing and income tax. This may result in the reclassification of certain items and could affect existing KPIs, financial covenants and remuneration metrics.
IFRS 18 also formalises disclosure requirements for management-defined performance measures, which must be presented in a single note with reconciliations to IFRS subtotals and explanations of their usefulness. ESMA emphasises consistency with ESMA’s APM Guidelines, particularly regarding prominence and reconciliation.
Additional changes relate to stricter rules on aggregation, clearer labelling of line items, and ESEF taxonomy updates, which may require issuers to remap existing tagging structures.
While the MFSA circular does not introduce additional requirements, it signals likely regulatory scrutiny in the run-up to IFRS 18’s application, particularly regarding IAS 8 impact disclosures, consistency of performance measures and ESEF preparedness.
UPDATE NUMBER 02/2026/05
ESMA issued a Public Statement providing guidance on the implementation of amendments to the Prospectus Regulation introduced by the EU Listing Act. The statement aims to ensure a smooth transition for issuers and national competent authorities (“NCAs”), particularly in light of certain transitional provisions and delays in related secondary legislation.
Transitional Provisions
The Listing Act introduced transitional rules under Article 48a of the Prospectus Regulation, which provide that prospectuses approved before 4 June 2026 will continue to be governed by the regulatory framework in force at the time of approval until the end of their validity.
ESMA clarified that this transitional regime should also apply to registration documents and universal registration documents, despite these not being explicitly referenced in Article 48a. NCAs are therefore expected to allow such documents approved or filed on or before 4 June 2026 to continue to be used in tripartite prospectuses until the end of their validity period, provided they remain appropriately updated through supplements or amendments.
Changes to Prospectus Regimes
The simplified disclosure regimes for secondary issuances and EU Growth prospectuses expire as of 5 March 2026. Prospectuses approved under these regimes before that date will remain valid until the end of their validity period, but new prospectuses cannot be approved under these frameworks after that date.
From 5 March 2026, issuers may instead use the newly introduced EU Follow-on prospectus and EU Growth issuance prospectus to access public capital markets.
Delay in Delegated Act
ESMA also noted that a Delegated Act amending the prospectus disclosure framework is expected but will not apply immediately due to the EU legislative scrutiny period.
During this interim period, NCAs are expected to review EU Follow-on and EU Growth issuance prospectuses based on the existing Annexes of the Prospectus Regulation, while ESMA recommends that issuers voluntarily include the disclosures envisaged in the forthcoming Delegated Act where relevant.
