MFSA launches consultation on regulatory framework for Shariah-compliant sukuk

The Malta Financial Services Authority (MFSA) has launched a public consultation on proposed changes to the Capital Markets Rules aimed at introducing sukuk—Islamic, Shariah-compliant financial instruments—to Malta’s capital markets.

Sukuk, often referred to as Islamic bonds, are structured to comply with Islamic law, which prohibits interest payments and speculative activity.

The move is part of the MFSA’s broader strategy to diversify Malta’s financial offerings and position the country as an inclusive and competitive hub for international finance.

The proposed amendments would create a specific regulatory framework for issuing sukuk on the Institutional Financial Securities Market (IFSM). The MFSA is inviting stakeholders to provide feedback on the draft rules by 8 August 2025.

“As interest in Islamic finance continues to grow globally, the authority wants to ensure that Malta’s capital markets are open, inclusive and aligned with international developments,” MFSA CEO Kenneth Farrugia said. “Through this initiative, we aim to provide clarity and confidence to issuers and investors interested in structuring, issuing or investing in sukuk.

The consultation document is available on the MFSA website. Comments can be sent to [email protected].

Islamic finance has been gaining momentum worldwide, and the MFSA's initiative marks Malta’s first formal step toward opening its markets to this growing sector.