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 02/2025/01
On 13 February 2025, the MFSA made amendments to Chapter 1 of the Capital Markets Rules specifically Rule 1.2 and Appendix 1.3 therein which lay down issuers’ obligation to pay the MFSA as they fall due the fees in relation to an application for Admissibility to Listing.
Capital Markets Rule 1.2 has been amended as follows:
1.2 Issuers must pay to the MFSA as they fall due the fees set out in the Financial Markets (Fees) Regulations, Subsidiary Legislation 345.28, as amended from time to time, in relation to an application for the approval of a prospectus and, or the Admissibility and in the latter case in relation to their continued Admissibility to Listing status.
Capital Markets Rule 1.2 is in italics, whereas the amendments made thereto are in italics and bold.
The updated Capital Market Rules can be accessed here.
UPDATE NUMBER 02/2025/02
As part of our ongoing commitment to stay at the forefront of regulatory changes impacting capital markets, members of our firm attended an insightful workshop organised by the MFSA, in collaboration with the Forum of Companies Secretaries, and held on 25 February 2025 at the MFSA’s premises.
The session, dedicated to “Listed Entities’ Continuing Obligations,” focused on enhancing transparency and compliance among company secretaries and issuers.
During the workshop, the MFSA emphasized the importance of regular market updates and the maintenance of detailed financial calendars. Issuers were urged to anticipate financial events by issuing corporate announcements ahead of board approvals and to embed interim and final audited financial statements directly within these announcements to foster transparency and increase accessibility. This approach helps avoid the issues of broken links and ensures that all regulatory information is readily available to the market.
The discussion also covered best practices around the European Single Electronic Format (ESEF), highlighting the prohibition of bitmap or image formats in financial reporting. The authority expects issuers to adhere strictly to these guidelines by 2024, underscoring the shift towards more digital and standardized reporting practices across Europe.
A significant portion of the workshop was dedicated to upcoming regulatory changes, including the transposition of the Gender Balance Directive, which impacts large equity issuers. This directive requires compliance with specific gender representation on corporate boards by June 2026, urging companies to start preparing early to align with these requirements.
Moreover, the MFSA discussed the challenges and expectations surrounding the Corporate Sustainability Reporting Directive (CSRD). This directive extends the sustainability reporting requirements beyond large public-interest entities to a wider range of companies, emphasizing the need for thorough data collection and management.
The MFSA also provided guidance on the role and operations of audit committees, advocating for enhanced practices that go beyond minimum requirements. Topics included the frequency of meetings, the competence of members in audit and accounting, and the integration of new areas such as cybersecurity and ESG reporting.
In an effort to support audit committees, the MFSA recommended the introduction by issuers of tailored induction programs and continuous professional development to ensure that committee members remain competent and effective in their roles. Additionally, discussions touched on the practical interpretations of ‘competence’ and the availability of appropriate expertise for companies engaged in specialized financial activities.
In conclusion, the workshop provided our team with valuable insights into the evolving regulatory landscape and the MFSA’s expectations for listed entities.
European Union Update
UPDATE NUMBER 02/2025/01
The Omnibus Package, adopted by the European Commission on 26 February 2025, aims to simplify EU regulations, boost competitiveness, and ease reporting burdens, particularly for SMEs. The key changes focus on sustainability reporting, due diligence, the EU Taxonomy, and the Carbon Border Adjustment Mechanism (CBAM), shifting obligations primarily to larger companies.
The Corporate Sustainability Reporting Directive (CSRD) would be amended to raise reporting thresholds to companies with over 1,000 employees and €50 million turnover, significantly reducing the number of firms required to comply. Sector-specific standards would be removed, value chain reporting would be reduced, and reporting deadlines for some companies would be delayed by two years. Audit requirements would remain limited assurance only, and third-country firms would only need to report if their EU revenue exceeds €450 million.
Under the Corporate Sustainability Due Diligence Directive (CSDDD), in-scope companies would be required to conduct due diligence only on their direct business partners, with monitoring required every five years instead of annually. Compliance deadlines would be extended to July 2028, and firms would no longer be civilly liable or required to terminate non-compliant business relationships. National governments would not be able to impose stricter rules, and minimum penalties would be removed.
The EU Taxonomy Regulation would render reporting voluntary for companies below €450 million revenue, introduce a 10% materiality threshold, and simplify reporting templates. A public consultation is open for further refinements.
The amended CBAM would introduce exemptions for small importers (under 50 tonnes per year), eliminating obligations for 90% of importers, while keeping 99% of emissions covered. Reporting and compliance rules for larger importers would be simplified.
