22 - 28 June 2000

Stockbrokers and Stock Exchange in liberalisation talks

by Anthony Manduca

The Malta Stock Exchange and local stockbrokers are having talks on the possibility of liberalising stockbroking in Malta, official sources have told The Malta Business Weekly. If liberalisation had to come about this means that the banks would also be allowed to act as stockbrokers. A meeting between the two sides was held last week in which the stockbrokers were told that the possibility existed that the sector could be liberalised as early as 1 July.

The stockbrokers are believed to have objected to such an early date because it would mean that they would have no time to restructure, merge and prepare for competition from the banks, which is bound to be quite significant. Should liberalisation come about the Maltese banks would be in a position to open "share shops" throughout Malta either as part of their branch network or as separate offices and this would no doubt be a major threat to the large number of stockbrokers that operate in the country.

Financial observers have told The Malta Business Weekly that when financial services were completely liberalised in Britain some years back, in what was known as "the big bang", all those involved in the sector had a couple of years' warning before liberalisation come about. In that way there was time for whatever restructuring or mergers that needed to take place. The same applied to when liberalisation came about in Japan in the mid 1990s.

A government source told The Malta Business Weekly that the talks between the two sides would continue and that nothing had officially been decided yet. Attempts to get a comment from Finance Minister John Dalli and Malta Stock Exchange chairman Alfred Mallia failed yesterday as both gentlemen were abroad.