29 June - 5 July 2000

Stockbrokers want liberalisation after EU referendum

by Anthony Manduca

Stockbrokers have asked the Malta Stock Exchange not to go ahead with plans for the immediate liberalisation of their profession and instead to delay this until after the country's referendum on European Union membership has been held, official sources have told The Malta Business Weekly.

Last week this newspaper had reported that the Malta Stock Exchange and local stockbrokers were having talks on the possibility of liberalising stockbroking and that the stockbrokers had objected to liberalisation being introduced soon as this would mean no time to restructure, merge and prepare for new competition.

The Malta Business Weekly has now learnt that after the meeting between the two sides on 14 June, local stockbrokers jointly sent a letter to the chairman of the Malta Stock Exchange, Alfred Mallia, and asked him not to consider liberalisation until after Malta votes on EU membership. The referendum should be held in about two years. Observers feel that the Stock Exchange's earlier suggestion that liberalisation could come about by 1 July was made "to test the waters" in order to find out what the stockbrokers' initial reaction would be to such a move.

One financial observer told The Malta Business Weekly: "Eight years ago not a single equity was listed on the Malta Stock Exchange and there is the possibility of immediate liberalisation. When the 'big bang' came about in Britain a few years ago, the financial sector had two year's warning before liberalisation came about and the London Stock Exchange has a far longer history than ours."

If liberalisation had to come about this would open the sector to competition not only from banks, which could set up "share shops", but also from foreign stockbrokers.