Public Consultation on the Revised Free Float Requirements for Regulated Markets

On the 16^th of June 2025, the Malta Financial Services Authority (“MFSA”) published a consultation document proposing significant changes to the minimum free float requirement (also referred to as the “Public Float”) for admission to trading on a regulated market in Malta (hereinafter referred to as the “Consultation Document”). The proposals follow the recent adoption of the EU Listing Act Package (Listing Act) published in the Official Journal of the European Union on the 14^th of November 2024, which includes the Listing Regulation (Regulation (EU) 2024/2809), the Listing Directive (Directive (EU) 2024/2811) and a new Directive on multiple vote share structures in companies that seek the admission to trading of their shares on a small and medium-sized enterprises (“SMEs”) growth market (Directive (EU) 2024/2810).

The MFSA’s proposals are driven by the transposition of the Listing Directive amending MiFID II (Directive 2014/65/EU), which is to introduce a new provision in the form of Article 51a  providing for specific conditions for the admission of shares to trading, requiring Member States to ensure that at least 10% of the subscribed share capital represented by the class of shares concerned by the application for admission to trading is held by the public at the time of admission to trading. The raison d’être behind the amendment to the minimum free float requirement is to allow for more flexibility for issuers and to make EU capital markets more competitive. The revised framework replaces the previous 25% minimum threshold set by Directive 2001/34/EC as prescribed in Malta by Rule 3.26 of the MFSA’s Capital Market Rules.

In light of this development, the MFSA has expressed its proposal to revise the local 25% threshold, taking into consideration the size and liquidity of the local market and the distribution of shares amongst the number of investors with the total value of the market capitalisation when considering the extent of the distribution of shares in the public hands.

The MFSA has proposed a tiered approach to the free float requirement, such that as opposed to amending (or reducing) the public float threshold from the current 25% to the 10% as permitted by Article 51a(4), the MFSA is proposing that issuers should have the option to apply a lower threshold than the original 25%, provided certain conditions are fulfilled.  Issuers would instead be eligible for admission with a reduced public float under the following bands:

• 10%–14% public float, provided that:
  • the issuer has a minimum of 200 investors (either directly or through intermediaries or custodians) at the date of admission; and
  • a total market capitalisation of €100 million at the time of admission is achieved.
• 15%–24% public float, provided that:
  • the issuer has a minimum of 200 investors; and
  • a minimum market capitalisation of €50 million is met.

Should an issuer not satisfy these specific conditions, the default 25% public float requirement would continue to apply. The proposed tiered system is intended to support SMEs by offering greater flexibility while still safeguarding market liquidity and investor protection.

The MFSA further noted that the proposed amendments to the rules would include, inter alia, the deletion of Rule 3.26 of the MFSA Capital Market Rules, the introduction of new rules within the Financial Market Rules and the amendment of existing Capital Markets Rules 3.29 and 10.23 in order to transpose Article 51a.

Stakeholders were invited to submit feedback to the Consultation Document on the minimum free float requirement for admission to trading on a regulated market as well as to the proposed criteria for the different levels of the Public Float by email to capitalmarkets@mfsa.mt by no later than the 16^th of July 2025.

For a copy of the full Consultation Document, click here.