Late Filings and Client Fund Gaps Drive MFSA's 2025 Enforcement Crackdown

The MFSA imposed 91 enforcement actions and €570,673 in administrative penalties in 2025, with late regulatory filings accounting for the bulk of cases.

The regulator handled 943 potential enforcement cases during the year, drawn from supervisory work and other sources.

Reporting breaches dominated the enforcement docket. The MFSA issued 63 administrative penalties for late or non-submission of statutory documentation, representing 69% of all enforcement actions. Of those, 25 cases were settled.

The Authority made clear that timely and accurate reporting is a core obligation that cannot be delegated. It does not issue reminders for deadlines and grants extensions only in exceptional circumstances. Even non-material failures can result in penalties, with aggravating and mitigating factors taken into account.

Beyond reporting, the Enforcement Function investigated unauthorised business, scams, and governance and internal control deficiencies identified through supervision.

Safeguarding of client funds emerged as a distinct enforcement priority. The MFSA found shortcomings among certain financial institutions, including payment and electronic money institutions.

Specific failings included inadequate segregation of client funds, insufficient or irregular reconciliations, and weak governance and internal control frameworks. The regulator stressed that safeguarding obligations are both an authorisation requirement and an ongoing duty.

In 2025, the MFSA cancelled the licence of one financial institution partly due to safeguarding breaches. Further investigations in this area remain ongoing.

The enforcement framework allows for a range of measures: administrative penalties, directives, licence suspension or cancellation, and public reprimands. Licence holders facing potential action can submit representations at the 'Minded Action' stage and may pursue settlement options.

The MFSA reiterated its expectation that all licence holders maintain robust governance, effective internal controls, and full compliance. The Authority said it remains committed to promoting high standards of conduct, deterring non-compliance, and safeguarding the stability and integrity of Malta's financial services sector.

For Malta's financial services community, the 2025 enforcement data signals a regulator that is both active and increasingly focused on operational basics: timely reporting and proper handling of client money. Firms that treat these as low priority do so at their own risk.