MFSA's "Dear CEO" Letter Highlights Systemic Broker Deficiencies

The Malta Financial Services Authority (MFSA) has intensified its supervisory focus, publishing key findings from its 2025 Outcomes-Based Supervision review. The initiative moved beyond basic compliance checks to assess the practical treatment of retail investors.

The regulator's latest action centers on two primary concerns: a comprehensive review of investment firms' online marketing and a direct "Dear CEO" letter flagging systemic failures in client complaint handling. For fintech and FX/CFD sector executives, the directive underscores that marketing and customer service operations must be integrated.

The review identified critical shortcomings in the sale of high-risk products and the resolution of investor disputes. It revealed that risk warnings for complex instruments like CFDs were frequently obscured by promotional offers, with third-party affiliates often operating without oversight. Furthermore, firms are now mandated to resolve complaints within a strict 15-working-day deadline, shifting away from a model where senior management handled routine grievances.

The findings indicate most brokerages treat complaints as administrative tasks rather than as vital risk management data, failing to identify underlying technical, operational, or educational flaws.

While these enforcement actions originate in Malta, they mirror wider European regulatory priorities on conduct risk. The link between aggressive marketing strategies and subsequent client complaints is now a key supervisory target. Regulators are enforcing localized, prominent risk disclosures and ongoing ad monitoring. This forces firms using EU passporting rights to harmonize marketing compliance across borders. Additionally, firms bear direct liability for non-compliant promotions by affiliates or introducing brokers, compelling them to implement automated monitoring tools and stricter contractual controls over partner networks.