The Malta Financial Services Authority (MFSA) has launched a public consultation on proposed changes to its Capital Markets Rules to introduce sukuk—Islamic, Sharia-compliant financial instruments—into Malta’s capital markets. This initiative represents a major step in diversifying Malta’s financial landscape and signals a strong commitment to innovation and inclusivity. Sukuk, often described as Islamic bonds, are structured to comply with Sharia law by avoiding interest and speculative activities, making them attractive to a growing base of ethical investors globally.

The proposed framework focuses on facilitating sukuk issuance on the Institutional Financial Securities Market (IFSM), positioning Malta to attract new types of investment and broaden its appeal as an international financial hub. By inviting feedback from stakeholders, the MFSA aims to create a clear and supportive regulatory environment that encourages both issuers and investors to explore these alternative instruments. The consultation is open until 8 August 2025, reflecting the authority’s commitment to transparency and collaboration.

MFSA Chief Executive Officer Kenneth Farrugia emphasized that as global interest in Islamic finance accelerates, Malta is keen to ensure its markets remain open, inclusive, and aligned with international trends. He highlighted that the initiative would provide much-needed clarity and confidence for those interested in structuring, issuing, or investing in sukuk, thereby strengthening Malta’s competitiveness on the global stage.

This move marks Malta’s first formal effort to tap into the rapidly expanding Islamic finance sector, which is valued at trillions globally and continues to gain traction among investors seeking ethical and value-based opportunities. By establishing a dedicated sukuk framework, Malta is not only diversifying its financial services offering but also reinforcing its ambition to become a forward-looking, adaptable financial center capable of meeting diverse investment needs.