27 July - 2 August 2000

Stockbroker's licence issued to individuals: MSE replies

by a staff reporter

There has been no amendment to Legal Notice 124, the Malta Stock Exchange has told The Malta Business Weekly.

Replying to an article carried last week "Stock brokerage liberalisation postponed to a later date", the Malta Stock Exchange has rebutted the statement that "... the necessary legal amendments allowing a 'person' to obtain a stockbroking licence rather than an 'individual' have already been carried out and were issued in a legal notice last week". The MSE said that this statement is incorrect and misleading.

The amendment, The Malta Business Weekly, reported, also prevents a person from keeping his licence if his nomination as a stockbroker is withdrawn by the Financial Services Organisation.

However, the MSE said that Legal Notice 124 introduces no such amendment. "None of the other relevant sections referred to as follows has ever been amended, substituted or revoked," the MSE said.

"A stockbroker is defined in terms of Section 2 of the Malta Stock Exchange Act 'as an individual who is carrying out the functions of a broker for the purchase or sale of quoted securities in terms of Section 9 of the Act'. Furthermore Bye Law 3.02 states that 'a member must be an individual who must conduct his business through a stockbroking firm'," the Malta Stock Exchange said.

It added: "A cursory reading of the Stock Exchange Act and also of the Statute attached thereto indicates that, the term 'person' and not 'individual' is used throughout the Stock Exchange Act and the Statute. This is the case in terms of Section 9 of the Stock Exchange Act and also in terms of Section 3 of the Statute. Clearly these are without prejudice to the definition section of the Act which requires a broker to be an individual. Legal Notice 124 does not depart from this style of drafting and proceeds to refer to a 'person' in Section 3 of the Statute as was hitherto the case.

"The suggested interpretation that this has amended the definition or that it enables the stock exchange to issue licences in the name of persons other than individuals is a legal absurdity."