Funds & Investment Services: Fund Listing and Depositary

Investment funds in Malta may obtain a primary or secondary listing and gain admittance to the Official List of the Malta Stock Exchange (MSE).

There are a number of advantages to listing a collective investment scheme, such as increasing the investor clientele base and raising a fund’s profile and therefore its marketability, since certain investors (for example, institutional investors such as pension funds) may be unable to invest in unlisted funds.

Having a listing on a well-regarded and regulated market makes an investment fund appear more reputable and attractive to clients. It also allows for further publicity and acessibility. If a fund is listed on the Malta Stock Exchange that automatically means that certain announcements are made available to the public.

The Malta Stock Exchange, despite being relatively recent when compared with other international stock markets (it only began operating in 1992, following enactment of the Malta Stock Exchange Act in 1990), has built a solid reputation upon its regulatory structure, cost-effectiveness and expedience.

The MSE is also a member of a number of international organisations including the Federation of European Stock Exchanges, the World Federation of Stock Exchanges and the International Organisation of Securities Commissions, among others.

Its rules are also updated regularly in order to address changes in the market and the requirements of the funds sector. The fact that the MSE is a smaller operation can also work in its favour, as it means that the staff can deal with clientele on a more personalised basis. The listing process is transparent and fairly swift, with no unnecessary administrative burdens.

The Malta Financial Services Authority (MFSA) is the authority responsible for listing of funds, so a fund simply needs to apply to the MFSA along with the necessary admission requirements.

The MSE Central Securities Depositary (CSD) is an excellent choice of depositary to maintain the fund registry, as it relies on a good regulatory framework and is of good repute throughout the investment sector.

Any client who wishes to purchase listed financial instruments, or to otherwise hold securities in the custody of the Exchange, receives a unique MSE Account Number within the CSD. Such Account Number is completely secure and is unique to the investor/member acting on behalf of an investor who holds it. All actions taken with regard to the investment are logged through this number, and upon client request, or annually, the client holding said number will receive a statement showing the balance held within the Account.

The MSE CSD has enjoyed success and grown in capacity over time. Another advantage is that the CSD enjoys a link with CLearstream, which is a leading European supplier of post-trading services. This allows securities to enjoy international accessibility, as well as to obtain easy access to a wide range of eligible foreign assets under the security of the MSE CSD link to the international markets.