The Malta Stock Exchange became a reality upon the enactment of the Malta Stock Exchange Act in 1990. The main objective was to develop the capital market in Malta by facilitating the mobilization of savings into productive investment through the primary market as well as to facilitate trading of listed securities through the provision of a secondary market.

Trading commenced on 8 January 1992 on a manual, once-weekly basis, initially solely in Government Stocks. From this modest beginning, the Exchange has undergone many positive corporate and operational developments which have enabled it to serve as an effective catalyst to mobilize capital.

In 2002, the Exchange shed its regulatory and Listing Authority roles and in 2007 changed its corporate structure to a group of companies incorporated under the Companies Act. This new structure better reflects the core services and operations provided by the Exchange and moreover provides the best legislative, regulatory and governance platform for the Exchange to continue to expand current operations into new avenues of business.

Legislative, regulatory and the many operational developments that have been undertaken throughout the years have ensured that today, the Exchange is an internationally recognized regulated market which successfully fulfills its role as an effective venue to raise capital finance. The Exchange provides a structure for admission of financial instruments to its recognized lists which may subsequently be traded on a fully electronic order book, regulated, transparent and orderly market place through authorized Members. The Exchange also offers a very comprehensive range of back-office services through its post-trading infrastructure, the Central Securities Depository, including clearing and settlement, maintenance of share and bond registers and custody services. A key strategic initiative undertaken was to unbundle the various services which may be availed of separately or otherwise, depending on the applicant's circumstances and market requirements

As the Exchange continues to develop in order to continue to achieve sustainable growth, it is committed to widening its horizons to attract more international business. One focus of the Exchange's international strategy has been to achieve connectivity with other markets. In this context, the first interoperable link was set up between Clearstream Banking and the Exchange's own depository which has also led to the launch of the Exchange's custody business. Also, the Exchange has launched a number of major technological upgrades designed to bolster and supports its international strategy, chief amongst which are the adoption of the use of the XETRA trading platform, supplied by Deutsche Bourse, AG in July 2012, Other recent key milestones were the launch of the Market Making rules and the designation of the Exchange as a Designated Offshore Securities Centre by the US Securities and Exchange Commission.

OUR SERVICES

The Malta Stock Exchange offers a varied spectrum of services :

Admission to Listing

The Process

The process to admit financial instruments to any of the recognised lists of the Malta Stock Exchange starts with a prospective Issuer seeking "Admissibility to Listing" from Malta Financial Services Authority (the MFSA) which is the Listing Authority. Granting of "admissibility" means that the Listing Authority has approved the Prospectus for issue and the Issuer may seek admission to any of the Exchange's recognised lists, the Main (Official) List or the Alternative Companies List (ACL).

It would be opportune to set up a preliminary meeting between the relevant parties and the Exchange before the formal application is made so as to clarify any operational matters and to ensure the smooth running of the whole process in the shortest possible time.

The role of the Sponsor

The first step in order to apply for Admissibility to Listing from the Listing Authority is to appoint a Sponsor who, as a minimum, must be in possession of a Category II licence in terms of the Investment Services Act.

The role of the Sponsor is to guide the prospective Issuer through the whole listing and admission process, to co-ordinate processes of all the advisors as well as to act as liaison with the Listing Authority and the Exchange, to generally advise the prospective Issuer on all relevant matters including those issues related to the secondary market. The Sponsor also assumes responsibility for signing and lodging the application and supporting documents with the Exchange.

Basic Conditions for Admissibility

As may be expected, there are a number of conditions which would need to be met by prospective Issuers of financial instruments as outlined in the Listing Rules issued by the Listing Authority and may be found on the MFSA website – www.mfsa.com.mt. An abridged version of these requirements is also found on the MSE website, www.borzamalta.com.mt.

The basic conditions to be fulfilled by an Applicant for admission are:

  • Financial instruments for which admission is sought must be freely transferable;
  • The application must relate to, and apply for, the financial instruments for which admission is being sought.

One may seek admission to the Main (Official) List which is designed to cater for issuers which have a proven 3-year track record, amongst other requirements, and the Alternative Companies List (ACL) where no track record is required and the entry requirements are less onerous.

Application for admission must be submitted at the same time as application for admissibility is made to the Listing Authority. The Exchange may require the Applicant to enter into an Admission Agreement.

The current maximum timeframe for approval of a prospectus by the Listing Authority is 20 working days from submission of final documents.

Once the Listing Authority has authorized the financial instruments as admissible to Listing, they would be eligible for admission to one of the recognised lists of the Exchange. The admissibility and admission processes are usually concurrent and do not involve duplication of submissions or vetting of documentation. Requirements for Admission to the Malta Stock Exchange are found in Chapter 6 of the MSE bye-laws – these may be found on the MSE website www.borzamalta.com.mt

Issuers which have been granted Admissibility to Listing under the Maltese jurisdiction can opt to have their instruments traded on the Malta Stock Exchange trading platform, or may seek to have them traded anywhere within the EU. This is possible since both the Main and the Alternative Companies lists are Regulated Markets, and therefore enjoy full passporting rights within the EU.

Disclosure Requirements

Once a financial instrument is granted admission, the Issuer must ensure compliance with the continuing obligations and disclosure standards as laid down in the Listing Rules and other relevant rules. Issuers whose securities are admitted to the Official List must also appoint a Compliance Officer who shall be responsible to ensure compliance with all relevant rules.

Company Announcements

  • May be issued in English in accordance with the Listing Rules and Prevention of Financial Markets Abuse (Disclosure and Notification) Regulations, 2005
  • Are disseminated through the Exchange's Dissemination System and may be issued at any time during the Exchange's Business Hours

Collective Investment Schemes

The Listing Rules issued by the Listing Authority set out the requirements for the admissibility to primary or secondary listing of Units in both open-ended and close-ended Collective Investment Schemes. These may be incorporated in Malta or outside of Malta. There are also continuing obligations applicable to the different types of Schemes.

Conditions to be fulfilled by open ended schemes seeking authorisation for admissibility to primary listing include:

  • Units must be freely transferable
  • There must be at least one director and corporate directors are not eligible unless the corporate director is the manager of the scheme
  • The Scheme must adopt rules governing dealings by directors
  • At the time of the AGM, copies of the Directors' service contracts must be made available for inspection by the public
  • Directors and proposed Director and in the case of a Unit Trust, the Directors of the Manager shall be personally responsible for the information contained in the Prospectus

In the case of close-ended Schemes where the shares in the Scheme may be traded on the Exchange's regulated market, trading, clearing and settlement and registration rules of the Exchange would apply, as outlined in the Bye-laws.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.