MALTA STOCK EXCHANGE Plc

MALTA STOCK EXCHANGE Plc PowerPoint PPT Presentation


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26 February 2010. Malta Stock Exchange plc. 2. Outline of Presentation. Legal

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MALTA STOCK EXCHANGE Plc

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1. Malta Stock Exchange plc 1 26 February 2010 MALTA STOCK EXCHANGE Plc OVERVIEW

2. 26 February 2010 Malta Stock Exchange plc 2 Outline of Presentation Legal & Regulatory Framework International Affiliations Milestones Operations & Functions Tax

3. 26 February 2010 Malta Stock Exchange plc 3 Legal & Regulatory Framework Malta Stock Exchange Act : Enacted on 13 November 1990 First Council wef 24 January 1991 Manual Trading commenced 8 January 1992

4. 26 February 2010 Malta Stock Exchange plc 4 Legal & Regulatory Framework Malta Stock Exchange Act : Both regulator & operator of the market Exclusivity of trading in listed securities Listing Authority Start up subvention of Lm500,000 Charge fees to generate operating costs

5. 26 February 2010 Malta Stock Exchange plc 5 Legal & Regulatory Framework Financial Markets Act - 2002 Replaced the MSE Act Divested MSE of regulatory authority – including LA - transfer to MFSA Removal of exclusivity of trading Status of an RIE –solely operator of the market

6. 26 February 2010 Malta Stock Exchange plc 6 Legal & Regulatory Framework Financial Markets Act - 2007: Transposition of MiFID and TD Corporate restructuring of the Exchange into Group of Companies set up under the Companies Act Licensed as both a regulated market and a central securities depository

7. 26 February 2010 Malta Stock Exchange plc 7 Legal & Regulatory Framework Financial Markets Act : Transfer of listed Securities Regulations Membership and Access Regulations Off Market Deals Regulations Authorisation Requirements – RM European Rights for Regulated Markets Regulations

8. 26 February 2010 Malta Stock Exchange plc 8 Legal & Regulatory Framework Financial Markets Act : Regulated markets Fees Regulations Transparency Regulations CSD – Control of Assets CSD – Designated Financial Instruments/Public Access CSD – Authorisation Requirements

9. 26 February 2010 Malta Stock Exchange plc 9 Legal & Regulatory Framework Financial Markets Act : Financial Market Rules/Financial Reporting : Notification requirements including pre- and post trading transparency reporting requirements Issuer information reporting Financial reporting iro capital adequacy requirements - Euro 1.5 million

10. 26 February 2010 Malta Stock Exchange plc 10 Legal & Regulatory Framework Bye-laws: Interpretation Administration Membership Trading Central Securities Depository Clearing and Settlement Admission Off-Market Trade Reporting Exchange Notices

11. 26 February 2010 Malta Stock Exchange plc 11 Legal & Regulatory Framework Related Legislation : Investments Services Act MFSA Act Prevention of Money Laundering Prevention of Financial Markets Abuse Companies Act Central Bank of Malta Act

12. 26 February 2010 Malta Stock Exchange plc 12 International Affiliations FESE – Federation of European Securities Exchanges WFE - World Federation of Exchanges IOSCO – International Organisation of Securities Commission ECSDA – European Central Securities Depositories Association ANNA - Association of National Numbering Agencies

13. 26 February 2010 Malta Stock Exchange plc 13 Milestones 1990 – MSE Act 1991 – First Council 1991 – Bye-laws 1992 – Manual trading on weekly basis 1992 – First equity listed 1994 – Integration of CSS and CSD 1994 – First Corporate Bond listed

14. 26 February 2010 Malta Stock Exchange plc 14 Milestones 1994 – First private equity listed (Lomb) 1995 – First local CIS listed 1996 – Screen based trading – CSS/CSD interfaced with trading system 1997 – First overseas fund listed 1998 – Daily trading commenced 1999 – Full member of FIBV (WFE)

15. 26 February 2010 Malta Stock Exchange plc 15 Milestones 2000 – ACL rules 2001- First Listing on ACL 2001 – Code of Corporate Governance 2001 – Remote Trading 2001 – Premises 2002 – FMA, MSE becomes RIE 2006 – Off-exchange Trading

16. 26 February 2010 Malta Stock Exchange plc 16 Milestones 2007 – Listing of Treasury Bills 2007 – New clearing & settlement system 2007 - Corporate Restructuring 2008 – Changeover to Euro 2008 – Direct Member of Target-2 2007 – Signatory to EU Code of Conduct 2009 – Signatory to MoU re Target2-Securities

17. 26 February 2010 Malta Stock Exchange plc 17 Operations & Functions Governance : Board – Sets strategy & policy Executive Committee – Implementation of strategy & policy Audit Committee SSS Committee

18. 26 February 2010 Malta Stock Exchange plc 18 Operations & Functions Offices : Compliance & Trading Operations Internal Compliance Central Securities Depository & Legal Human Resources Corporate Services Finance Office Data Operations & IT

19. 26 February 2010 Malta Stock Exchange plc 19 Operations & Functions Core Functions : Compliance & Market Operations (Trading & Membership) Central Securities Depository including clearing and settlement and National Numbering Agency Admission

20. 26 February 2010 Malta Stock Exchange plc 20 Operations & Functions Core functions : Straight through process from trading to clearing and settlement to registration through electronic links and messaging system (SWIFT) between trading and registration (CSD) system Data in respect of regulatory reporting arises from trading/registration systems

21. 26 February 2010 Malta Stock Exchange plc 21 Operations & Functions Membership: Member Firms are licensed under the ISA (Category 2 licence) MSE grants access to the trading system and to the clearing and settlement system Member firms are represented by traders in the market All trading – on or off-market must be routed through a Member Members may also act as Sponsors in a listing process

22. 26 February 2010 Malta Stock Exchange plc 22 Operations & Functions Trading : Daily trading – pre-open/continuous trading cycles Screen based, remote Order driven Electronic Order book only6 Trading at client level Best execution – price/time trading algorithm Interfaced to clearing and settlement system and registration system Market monitoring and regulatory reporting

23. 26 February 2010 Malta Stock Exchange plc 23 Operations & Functions Central Securities Depository (CSD) : Maintenance of dematerialised registers of listed companies Investor services – transaction histories, statements, notifications Corporate actions – dividends, bonus, rights issues, etc Causa mortis processing Pledging Reporting Other services – custodian services, services to non-listed companies

24. 26 February 2010 Malta Stock Exchange plc 24 Operations & Functions Clearing & Settlement : Approved Payment System – MaltaClear Participation in MaltaClear – authorised financial intermediaries, credit institutions Member of Target-2 Delivery versus payment basis Settlement cycle of T+ 3 for all financial instruments except TBs which is T + 0 Cash settlement on netting basis except TBs which is gross Security settlement on a gross basis Off-market trades may be settled through MaltaClear

25. 26 February 2010 Malta Stock Exchange plc 25 Operations & Functions National Numbering Agency : Designated NNA in 2003 however had been carrying out this function since 1992 NNA provides unique identification number (ISIN Code – International Securities Identification Numbers) for each financial instrument registered in Malta whether listed or not

26. 26 February 2010 Malta Stock Exchange plc 26 Operations & Functions National Numbering Agency : An ISIN Code is allocated according to a set of rules known as the ISO Standard 6166 – MT0000XXXXXX (Eg. BOV – MT0000020116) Regulatory reporting under MiFID and TD requires the use of ISIN Nos. as financial instruments’ reference nos.

27. 26 February 2010 Malta Stock Exchange plc 27

28. 26 February 2010 Malta Stock Exchange plc 28

29. 26 February 2010 Malta Stock Exchange plc 29 Admission Requirements & Disclosure Standards Chapter 6 of the Bye-laws Must be read in conjunction with the Listing Rules issued by the LA “Admissibility” authorised by LA or equivalent by recognised jurisdiction is first step to admission

30. 26 February 2010 Malta Stock Exchange plc 30 Admission Requirements & Disclosure Standards Equities Corporate Bonds Malta Government Bonds Treasury Bills CISs – Close ended/open ended

31. 26 February 2010 Malta Stock Exchange plc 31 Admission Requirements & Disclosure Standards Benefits of Listing : Access to the primary market Fiscal advantages Marketability Valuation of business Enhanced company profile Incentives to employees & recruitment advantages Governance

32. 26 February 2010 Malta Stock Exchange plc 32 Admission Requirements & Disclosure Standards Considerations before going public: Potential loss of exclusive control Vulnerability to market conditions Public interest Trading restrictions Time frame for going public/listing

33. 26 February 2010 Malta Stock Exchange plc 33 Admission Requirements & Disclosure Standards Considerations before going public: Do the right conditions exist for the company to go public? Is it the right time to go public? Does the company have a competitive advantage and will going public enhance this or indeed create it if it does not exist?

34. 26 February 2010 Malta Stock Exchange plc 34 Admission Requirements & Disclosure Standards Considerations before going public: Does the right management structure exist that will put shareholder issues as a priority? What will attract investors to the company? Does the company have efficient management information and internal reporting systems and is it ready for transparent and efficient communication? Cost of listing – professional fees, marketing, etc.

35. 26 February 2010 Malta Stock Exchange plc 35 Admission Requirements & Disclosure Standards Basic conditions for listing: (Chapter 3 of LRs) Duly incorporated or established Track record of 3 years in major sections of its business Consolidated, audited financial accounts conforming with CA and IFRS No qualifications in audit report

36. 26 February 2010 Malta Stock Exchange plc 36 Admission Requirements & Disclosure Standards Basic conditions for listing: Securities are freely transferable Market cap. of securities to be listed at least Euro 1.3 million for equities 25% of class of shares in public hands Debt securities – at least Euro 2.5 million on offer Disclosure requirements

37. 26 February 2010 Malta Stock Exchange plc 37 Admission Requirements & Disclosure Standards Second Tier Market : Fully paid up share capital of Euro 200,000 Does not need trading record Flotation limit of not less than Euro 200,00 Freely transferable 25% in hands of the public if paid up share capital of less than Euro 2.5 million

38. 26 February 2010 Malta Stock Exchange plc 38 Admission Requirements & Disclosure Standards Second Tier Market: Debt securities: No trading record required At least Euro 2.5 million on offer

39. 26 February 2010 Malta Stock Exchange plc 39 TAX Gains on transactions in listed financial instruments are exempt from capital gains No stamp duty applicable on transactions in listed financial instruments Resident investors – elective withholding tax option Non-resident investors – exempt from Withholding tax under relevant income is repatriated to Malta Dividends – net of tax – usually 35%. This varies according to whether the dividends due are paid out from taxable profit or not. If dividends are paid out of non-taxable profits, then no tax would be applicable on such payments.

40. 26 February 2010 Malta Stock Exchange plc 40 CONTACTS Malta Stock Exchange plc Garrison Chapel Castille Place Valletta VLT 1063 Tel : + 356 21 244 051 Fax: + 356 25 696 316 E-mail: [email protected] www. borzamalta.com.mt

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