Source: Katarina Krempova¸ PKF Malta¸ 27th February 2012

 

The stock exchanges of Ireland and Malta have agreed on a joint venture to create a specialist new market for wholesale fixed-income debt securities¸ the so-called European Wholesale Securities Market (EWSM). The aim of this market is to offer a new venue for trading products which are normally exchanged in one-to-one¸ over-the-counter transaction.

Under this venue¸ the Irish Stock Exchange (ISE) will own a stake in the newly formed company of 80 per cent and the Malta Stock Exchange (MSE) will have the remaining 20 per cent shareholding.

Apart from acting as the market promoter¸ ISE will provide primary market infrastructure¸ as well as other corporate services to the EWSM. On the other hand¸ MSE will act as the market operator and provider of secondary market services to EWSM.

The EWSM¸ which is established and authorized by the Malta Financial Services Authority¸ will offer issuers as well as arrangers of wholesale fixed-income debt securities access to an EU regulated marketland. In addition¸ the EWSM should serve as a complement of the existing market offerings from each exchange.

The Board of Directors of EWSM consists of three non-executive directors:

• Paidrac O’Connor¸ the Chairman of the ISE
• Michael Bonello¸ the former Governor of the Central Bank of Malta
• Fabrice Demarigny¸ who previously was Secretary General of the Committee of European Securities Regulators

Moreover¸ the ISE has to launch a new entity¸ which will leverage the ISE’s established expertise in structured debt. The “ISE Listing Services” (ISELS) will provide listing agency services on a commercial basis to issuers and arrangers interested in gaining admission to the new market.

Irish Stock Exchange Chief Executive Deirdre Somers commented that the new market reflects an opportunity for the ISE to further expand its business internationally in one of its key product lines. According to her¸ the EWSM creates an additional market choice for debt issuers and allows the ISE to extend its geographic reach¸ as well as to build established reputation in market. She tried also to explain that the domestic market represented “a relatively small part of our income stream.”

In Addition¸ Ms Somers sees the Malta Stock Exchange as an ideal partner for the joint venture: “We’ve had a close working relationship with the Malta Stock Exchange for many years. It is an established and experienced market operator and we’re delighted to have the opportunity to work with it to deliver an attractive new market proposition¸” said she.

Artur Galea Salomone¸ Chairman of the Malta Stock Exchange¸ gave also his statement: “The European Wholesale Securities Market is an important addition to Malta as an international financial services centre. Having the expertise of the Irish Stock Exchange on board was essential to its successful delivery. We are pleased that this joint venture enabled us to build upon our strong relationship with the Irish Stock Exchange.”

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