                        FINANCIAL MARKETS ġ CAP. 345.        1
CHAPTER 345
FINANCIAL MARKETS ACT
Amended by:
XVII. 2002.111.
To regulate Investment Exchanges and to provide for orderly trading in
securities and to provide for matters ancillary or incidental thereto or
connected thererwith.
24th January, 1991;
12th December, 1991;
8th January, 1992;
21st February, 1992
ACT XXXIII of 1990, as amended by Legal Notice 2 of 1992; Act V of
1992; Legal Notice 76 of 1994; Acts: XIV, XVI and XXI of 1994, XXIV and
XXV of 1995, and IX of 1997; Legal Notices 90 and 91 of 1999 and 124 of
2000; Acts XVII of 2002 and IV of 2003; and Legal Notice 370 of 2003.
PART I
PRELIMINARY
Short title.
Amended by:
XVII. 2002.112.
1. The short title of this Act is the Financial Markets Act.
Interpretation.
Amended by: 
V.1992.2,3;
XIV.1994.32;
XXI.1994.12;
XXV.1995.433;
IX. 1997.5;
XVII. 2002.113.
2. In this Act and in the Schedule thereto unless the context
otherwise requires:
" Borża" means the place where the Exchange is established by
the Council for the purpose of its business;
"bye-laws" means the Bye-laws made in terms of article 28;
"Central Bank" means the Central Bank of Malta;
"central securities depository" means the depository established
by the Exchange in accordance with its bye-laws;
"Chairman" means the chairman of the Exchange;
"company" includes:
ARRANGEMENT OF ACT
Articles 
Part I  Preliminary 1-2 
Part II  Recognised Investment Exchanges  3-10 
Part III  Listing Authority 11-23 
Part IV  The Malta Stock Exchange 24-31 
Part V  Regulatory and Investigatory Powers 32-41 
Part VI  Financial Services Tribunal  42-44 
Part VII  Miscellaneous  45-52
SCHEDULE 
  2      CAP. 345. ħ                 FINANCIAL MARKETS
Cap. 386.
(i) a public company formed and registered in
accordance with the Companies Act; and 
(ii) a company constituted or incorporated or to be
constituted or incorporated outside Malta,
irrespective of whether the company has or has
not established a place of business in Malta;
"competent authority" means the person or body as the Minister
shall by notice in the Gazette appoint to carry out the functions of
the competent authority under this Act and to perform such other
functions as the Minister may consider appropriate in relation to
the operation of this Act;
"corporate body" means a corporation set up by any law in
Malta;
"Council" means the Council of the Exchange established by
article 25;
"Exchange" means the Malta Stock Exchange, established by
article 24;
"financial year" means any period of twelve months ending on
the 31st December, provided that with regard to the first financial
year this shall be a period of not more than twenty four months
ending on the 31st December of the second year following the
setting up of the Exchange;
"individual connected with the company" means an individual
who is either:
(i) a director of that company or a related company,
or 
(ii) who is an officer or employee of that company
or related company, or
(iii) occupies a position involving a business or
professional relationship between himself, his
employer, or a company of which he is a
director, and that company or related company,
or
(iv) a public officer acquiring information in an
official capacity;
Cap. 375.
"insider dealing" means conduct amounting to any offence under
the provisions of the Insider Dealing and Market Abuses Offences
Act;
"inspector" means an inspector appointed under article 33;
Cap. 370.
"licence holder" means a person who holds a licence under the
Investment Services Act ;
"Listing Authority" means such person or body appointed by the
Minister by notice in the Gazette to be the Listing Authority, for
the purposes of article 11, provided that until such time as the
Minister makes such appointment any reference to the Listing
Authority shall be interpreted as a reference to the Council;
"listed company" means a company whose securities have been
                        FINANCIAL MARKETS ġ CAP. 345.        3
admitted to listing on a recognised investment exchange in
accordance with this Act;
"listed securities" or "quoted securities'' means securities which
have been admitted to listing on a recognised investment exchange
in accordance with this Act;
Cap. 375.
"market abuse" means conduct amounting to an offence of
market abuse under the Insider Dealing and Market Abuse Offences
Act;
"members" in relation to a recognised investment exchange
means the members of that recognised investment exchange;
"Minister" means the Minister responsible for finance;
"official list" means the list prepared and published by the
Exchange as its official list in accordance with its bye-laws;
"orderly" means the due execution of transactions in accordance
with the bye-laws and with proper regard to equitable treatment of
users and participants in the market;
"quoted company" means a company whose securities have been
admitted to listing and trading on a recognised exchange in
accordance with the provisions of this Act;
"recognised list" means a list prepared and published by a
recognised investment exchange in accordance with the bye-laws
of such recognised investment exchange;
"related company" in relation to a company, means any body
corporate which is that company’s subsidiary, associated or holding
company, or is the manager of or managed by, or is advisor to or is
advised by or otherwise controls or is controlled by that company,
its holding company or a subsidiary or associate of that company’s
holding company;
"securities" means securities as defined in article 2 of the
Schedule, issued or to be issued by a commercial partnership, a
corporate body established by law, the Government of Malta or
other issuers;
"statute" means the statute of the Exchange made in terms of
article 28;
Cap. 370.
"stockbroker" means any licence holder authorised by the
competent authority under the Investment Services Act to carry out
the functions of broker for the purchase or sale of quoted securities;
provided that any stockbroker's licence issued by the Council of the
Malta Stock Exchange shall continue in force until renewed or
revoked by the competent authority under the Investment Services
Act;
"trading" means the activity of buying and selling of quoted
securities; and
Cap. 330.
"tribunal" means the Financial Services Tribunal established
under article 21 of the Malta Financial Services Authority Act:
Provided that for the purposes of procedures under this Act
the members of the tribunal appointed under article 21 of that Act
  4      CAP. 345. ħ                 FINANCIAL MARKETS
shall be substituted by persons appointed by the Minister under this
article being persons who in the Minister’s opinion possess the
necessary expertise and experience to deal with such cases, and the
other provisions of the said article 21 of the said Act shall apply to
the members appointed under this article in the same manner and
extent as they apply to the members substituted by them.
PART II
RECOGNISED INVESTMENT EXCHANGES
Requirements for 
recognition.
Substituted by:
XVII. 2002.114.
3. The Minister, acting on the advice of the Competent
Authority, may make regulations setting out - 
( a ) the requirements and conditions which must be
satisfied by an investment exchange if it is to qualify
as a recognised investment exchange and in respect of
which the competent authority may make an order
hereinafter in this Act referred to a ''recognition order''
under this part of the Act; 
( b ) the requirements including reporting requirements and
conditions which a recognised investment exchange
must continue to satisfy if it is to remain a recognised
investment exchange;
( c ) the circumstances and the manner in which a
recognition order or the requirements and conditions
to which it is subject may be varied, suspended or
revoked;
( d ) rules for the regulation and supervision of recognised
investment exchanges;
( e ) arrangements for the investigation of complaints about
recognised investment exchanges;
( f ) the functions of the Tribunal with respect to
proceedings under the rules of a recognised investment
exchange by persons subject to such rules;
Cap. 379.
( g ) arrangements for the scrutiny of rules and practices of
recognised investment exchanges and for preventing
restrictive practices in terms of the Competition Act
and any rules, regulations or directives made
thereunder;
( h ) categories of transactions that are to be carried out
exclusively on a recognised investment exchange and
the circumstances in which investors may be exempted
therefrom;
( i ) prescribing anything that is incidental to or connected
with any of the above matters.
Application for 
recognition.
Substituted by:
XVII. 2002.114.
4. (1) ( a )  No person shall provide, or hold itself out to
provide the services of an investment exchange in or from within
Malta unless such person is in possession of a recognition order. 
                        FINANCIAL MARKETS ġ CAP. 345.        5
( b )  Any body corporate or unincorporate may apply to the
competent authority for a recognition order under this Part of the
Act declaring it to be a recognised investment exchange for the
purposes of this Act.
(2) An application under subarticle (1) shall be made in such
manner as the competent authority may direct and shall be
accompanied by a copy of the applicant's rules or bye-laws.
(3) The competent authority may issue directives setting out -
( a ) the manner and form in which an application is to be
made;
( b ) the particulars and such other matters which are to be
set out by an applicant;
( c ) such further information as the competent authority
may reasonably require for the purpose of determining
the application;
( d ) any other matter incidental to or connected with any of
the above.
(4) Information which the competent authority may require in
connection with an application shall be provided in such form, and
shall be verified in such manner, as the competent authority may
direct.
(5) Different directives may be issued by the competent
authority under subarticle (3) with respect to different classes or
categories of applications.
(6) In determining an application the Competent Authority may
have regard to any information which it considers relevant to the
application.
(7) The competent authority may on an application duly made
in accordance with subarticles (1) and (2) and subject to any
directives issued under article 4(3) make or refuse to make a
recognition order.
(8) A recognition order shall state the date on which it shall
take effect.
(9) Where the competent authority refuses an application for a
recognition order it shall give the applicant a notice to that effect
stating the reasons for the refusal.
(10) If the competent authority refuses an application for a
recognition order the applicant shall have a right of appeal to the
Tribunal in accordance with article 43.
(11) A recognition order may, in accordance with such
regulations as may be prescribed, be varied, suspended or revoked
by the competent authority.
Directives.
Substituted by:
XVII. 2002.114.
5. (1) The competent authority may issue directives requiring
a recognised investment exchange to give it - 
( a ) notice of such events relating to that recognised
investment exchange as may be specified by the
  6      CAP. 345. ħ                 FINANCIAL MARKETS
competent authority; and
( b ) such information in respect of those events as may be
specified by the competent authority;
( c ) such other information relating to that recognised
investment exchange, at such times or in respect of
such period as may be specified by the competent
authority.
(2) Any directives issued by the competent authority may
require information to be given in a specified form and to be
verified in a specified manner.
(3) The competent authority may issue directives for the better
regulation of recognised investment exchanges.
Non-application or 
modification of 
directives.
Substituted by:
XVII. 2002.114.
6. (1) The competent authority may direct that any of the
directives issued under article 5 are not to apply in respect of any
recognised investment exchange or are to apply to such recognised
investment exchange with such modification as may be specified in
the directive, if it is satisfied that - 
( a ) compliance by the recognised investment exchange
with the directives, or with the directives as
unmodified, would be unduly burdensome or would
not achieve the purpose for which the directives were
made; and 
( b ) the non-application or modification of the directive as
aforesaid would not result in undue risk to persons
whose interests such directives are intended to protect.
(2) A directive issued by the competent authority under
subarticle (1) may be made subject to such conditions as the
competent authority may deem fit.
Supervision.
Substituted by:
XVII. 2002.114.
7. (1) The competent authority may, whenever it appears that
a recognised investment exchange - 
( a ) has failed, or is likely to fail, to satisfy the
requirements for recognition in or under this Act; or 
( b ) has failed to comply with any other obligation imposed
on it by or under this Act,
issue such directives as it may deem appropriate in the
circumstances - 
(i) for the purpose of securing the body's
compliance with such requirements or any
obligation imposed by or under this Act;
(ii) requiring anything to be done or to be omitted to
be done, or impose any prohibition, restriction
or limitation, or any other requirement
whatsoever.
(2) The power to issue directives under this section includes
the power to make such directives subject to such conditions as the
competent authority may deem fit as well as the power to amend,
revoke or substitute any such directive.
                        FINANCIAL MARKETS ġ CAP. 345.        7
Revocation of 
recognition order.
Substituted by:
XVII. 2002.114.
8. (1) A recognition order may be revoked by an order made
by the competent authority at the request, or with the consent of the
recognised investment exchange concerned or otherwise as
provided in this Act.
(2) If it appears to the competent authority that a recognised
investment exchange -
( a ) is failing, or has failed, to satisfy the requirements for
recognition under this Act, or
( b ) is failing or has failed, to comply with any other
obligation imposed on it by or under this Act,
it may make an order revoking the recognition order for that body
even though the body does not wish or does not consent to the
revocation of the recognition order.
(3) An order under subarticles (1) and (2) revoking a
recognition order hereinafter referred to as a ''revocation order''
shall specify the date on which it is to take effect.
(4) In the case of a revocation order made under subarticle (2)
the specified date must not be earlier than the end of the period of
three months beginning with the day on which the order is made.
(5) A revocation order may contain such transitional provisions
as the competent authority deems necessary or expedient.
Notice of directive 
or revocation.
Substituted by:
XVII. 2002.114.
9. (1) Before issuing a directive under article 7, or before
making a revocation order under article 8(2), the competent
authority shall - 
( a ) give written notice of its intention so to do to the
recognised investment exchange concerned; and
( b ) take such steps as it considers reasonably practicable
to bring the notice to the attention of any other persons
who are, in its opinion, likely to be affected.
(2) A notice under subarticle (1) shall -
( a ) state the reasons why the competent authority intends
to issue the directive or make the revocation order; and 
( b ) draw attention to the right to make representations
conferred by subarticle (3).
(3) Before the end of the period for making representations 
( a ) the recognised investment exchange; and
( b ) any other person who is likely to be affected by the
proposed revocation order and notified in terms of
subarticle (1)( b ),
may make representations to the competent authority.
(4) The period for making representations is - 
( a ) two (2) months beginning -
(i) with the date on which the notice is served on
the recognised investment exchange in the case
of the recognised investment exchange, or 
  8      CAP. 345. ħ                 FINANCIAL MARKETS
(ii) with the date on which the notice is brought to
the attention of any other persons notified in
terms of subarticle (1)( b ) in the case of such
other persons.
( b ) such longer period stated in the notice as the
competent authority may deem fit to allow in the
particular case.
(5) In deciding whether to issue a directive or make a
revocation order, the competent authority shall have regard to any
representations made in accordance with subarticle (3).
(6) If the competent authority decides to issue the proposed
directive or to make the proposed revocation order it shall:
( a ) give the recognised investment exchange written
notice of its decision; and
( b ) where it decides to issue the directive or to make the
order, take such steps as it considers reasonably
practicable for bringing its decision to the attention of
any other persons who are, in the competent
authority’s opinion, likely to be affected thereby.
Notification of 
intended action.
Substituted by:
XVII. 2002.114.
10. A recognised investment exchange intending to take any of
the following actions shall notify the competent authority in
writing and the consent of the competent authority shall be required
before a recognised investment exchange may lawfully:
( a ) alter or revoke any of its rules or bye-laws; or
( b ) make or issue new rules or bye-laws; or
( c ) make a change in the arrangements it makes for the
provision of clearing services in respect of
transactions effected on the exchange concerned or in
the criteria which it applies when determining to
whom it will provide clearing services.
PART III
LISTING AUTHORITY
Constitution and 
functions of the 
Listing Authority.
Substituted by:
XVII. 2002.114.
11. There shall be a Listing Authority having the following
functions:
( a ) to authorise the admissibility of such securities as it
considers appropriate to the official list and to any
other recognised list;
( b ) to make rules ("listing rules") for the purposes of this
Part of the Act;
( c ) to ensure compliance with any requirements or
conditions set out in listing rules for listed securities to
remain listed;
( d ) to make any other rules that it is empowered to make
                        FINANCIAL MARKETS ġ CAP. 345.        9
under this Part of the Act.
Admissibility to 
listing.
Substituted by:
XVII. 2002.114.
12. (1) ( a )  Without prejudice to paragraph ( b ), no securities
may be admitted to listing and trading on the Official List or on any
other recognised list unless the Listing Authority shall have first
authorised the admissibility of such securities to listing in
accordance with any rules made under article 13.of this Act.
( b )  The Minister may by regulations provide that any
securities which fall within a description or category specified in
such regulation shall not be admissible to listing on the official list
or on any other recognised list.
(2) The Exchange and every recognised investment exchange
may admit to listing and trading to the official list or, as the case
may be, to the recognised list concerned such securities as may be
considered appropriate and - 
( a ) which have been authorised as admissible to listing by
the Listing Authority; and
( b ) which do not fall within a description or category
specified in any regulation made by the Minister under
subarticle (1)( b ) as not being admissible to the official
list or to any other recognised list:
Provided that with the consent of the Listing Authority the
Exchange and every recognised investment exchange may admit to
listing securities which are not traded.
Listing rules.
Substituted by:
XVII. 2002.114.
13. The Listing Authority may make listing rules:
( a ) setting out the requirements and conditions which
must be satisfied by a person making an application
for its securities to be authorised as admissible to the
official list or to any other recognised list;
( b ) setting out the requirements and conditions the
applicant must continue to satisfy if its listed securities
are to remain listed on any of such lists;
( c ) setting out the manner and form in which an
application for admissibility to listing must be made to
the Listing Authority and any fees payable in
connection therewith;
( d ) setting out the form of and information required to be
set out in any listing particulars, prospectus or other
document to be submitted to the Listing Authority in
accordance with any listing rules made hereunder;
( e ) setting out the registration requirements in respect of
any listing particulars, prospectus or other documents
to be published in accordance with any listing rules
made hereunder;
( f ) requiring in such circumstances as may be set out in
the rules the publication of advertisements or other
information in connection with applications for the
admissibility to listing or admission to listing and
  10      CAP. 345. ħ                 FINANCIAL MARKETS
trading of securities on the official or on any
recognised list;
( g ) setting out regulatory, investigatory, disciplinary and
enforcement powers of the Listing Authority, the
Exchange and other recognised investment exchanges
in relation to issuers of listed securities;
( h ) setting out, without prejudice to the provisions of
articles 17 and 18, the penalties for the breach of
listing rules that may be imposed by the Listing
Authority under article 19;
( i ) anything that is incidental to or connected with any of
the matters above as the Listing Authority may
consider appropriate.
Listing committee.
Substituted by:
XVII. 2002.114.
14. (1) The Listing Authority may establish a committee,
hereinafter referred to as the ''Listing Committee'', to which it may
delegate any of its functions and powers under this Part:
Provided that the Listing Authority may not delegate its
power:
( a ) to grant or refuse authorisation for admissibility to
listing under this Part of the Act;
( b ) to discontinue the listing of any securities under this
Part of the Act.
(2) The Listing Committee shall be composed of such persons
and have such powers and observe such rules of procedure as set
out in the instrument setting it up.
(3) The Listing Authority may vary, amend or substitute any
instrument setting up the Listing Committee.
Listing.
Substituted by:
XVII. 2002.114.
15. (1) An application for admissibility to listing shall be
made to the Listing Authority in such manner as may be required
by the listing rules.
(2) No application for admissibility to listing may be
entertained by the Listing Authority unless it is made by, or with
the consent of, the issuer of the securities concerned.
(3) The Listing Authority shall not authorise admissibility to
listing unless it is satisfied that - 
( a ) the requirements of any applicable listing rule, and
( b ) any other requirements imposed by the Listing
Authority in relation to the application,
are complied with.
(4) An application for admissibility to listing shall be refused if
the Listing Authority considers that granting it would be
detrimental to the interests of investors.
Notification of 
decision.
Substituted by:
XVII. 2002.114.
16. (1) The Listing Authority shall notify the applicant of its
decision to accept an application for admissibility to listing -
( a ) before the end of the period of forty days beginning
                        FINANCIAL MARKETS ġ CAP. 345.        11
with the date on which the application is received; or
( b ) if within that period the Listing Authority has required
the applicant to provide further information in
connection with the application, before the end of the
period of forty days beginning with the date on which
that information is provided.
(2) If the Listing Authority fails to notify the applicant in
accordance with subarticle (1), it shall be deemed to have sent an
advance notice in writing as provided in subarticle (4).
(3) If the Listing Authority decides to authorise admissibility
to listing it shall give the applicant written notice accordingly.
(4) If the Listing Authority proposes to refuse authorisation for
admissibility to listing, it shall give the applicant advance notice in
writing of its intention to refuse the application stating the reasons
for its proposed refusal and drawing the applicant's attention to its
rights to make representations in accordance with subarticle (5).
(5) An applicant who has received advance notice in writing of
the Listing Authority's intention to refuse authorisation for
admissibility to listing may make representations to the Listing
Authority - 
( a ) within one month from the date on which the advance
notice is served on the applicant; or 
( b ) within such longer period to be stated in the advance
notice in writing as the Listing Authority may deem fit
to allow in the particular case.
(6) If the Listing Authority decides to refuse an application for
admissibility to listing it must give the applicant notice of its
decision in writing stating the reasons for its refusal and drawing
the applicant’s attention to its right to refer the matter to the
Tribunal. 
(7) If the Listing Authority decides to refuse an application for
admissibility to listing the applicant shall have a right of appeal to
the Tribunal in accordance with article 43.
Discontinuation or 
suspension.
Substituted by:
XVII. 2002.114.
17. (1) ( a )  The Listing Authority may, in accordance with the
listing rules, and whether of its own motion or at the request of the
Exchange or another recognised investment exchange on which any
securities have been admitted to listing and trading, discontinue or
suspend the listing of such securities if it is satisfied that there are
circumstances which warrant such suspension or discontinuance.
( b )  The provisions of this subsection shall be without
prejudice to the power of the Exchange or any recognised
investment exchange on which any securities are listed to suspend
the listing of any such securities in accordance with its rules if
there is reason to believe that this is the interest of the Exchange or
the other recognised investment exchange as the case may be or the
public or investors generally:
Provided that a suspension ordered by the Exchange or
another recognised investment exchange on which the securities
  12      CAP. 345. ħ                 FINANCIAL MARKETS
concerned are listed may not without the approval of the Listing
Authority be for more than ten working days in any period of three
months:
Provided further that the provisions of article 18(2) and (3)
shall apply  mutatis mutandis  to any suspension ordered by the
Exchange or another recognised investment exchange on which the
securities concerned are listed and the rules of every recognised
investment exchange shall state that the provisions of article 18(2)
and (3) shall apply  mutatis mutandis  to any suspension ordered by
that recognised investment exchange.
(2) If the listing of any securities is suspended under subarticle
(1) such securities may still be treated as being listed for such
purposes as may be set out in listing rules.
(3) If the Listing Authority discontinues or suspends the listing
of any securities, the issuer shall have a right of appeal to the
Tribunal in accordance with article 43.
Notice of 
discontinuation or 
suspension.
Substituted by:
XVII. 2002.114.
18. (1) If the Listing Authority - 
( a ) proposes to discontinue or suspend the listing of
securities, or
( b ) decides to suspend the listing of securities with
immediate effect,
it must give the issuer of such securities written notice.
(2) The discontinuance or suspension of the listing of securities
takes effect immediately or on such date as may be specified in the
notice under subarticle (1),
(3) A notice given under subarticle (1) shall - 
( a ) give details of the discontinuance or suspension;
( b ) state the Listing Authority’s reason for the
discontinuance or suspension, provided that the
interest of the Exchange or of any recognised
investment exchange or the interest of the public or the
investors shall constitute sufficient reason; 
( c ) inform the issuer of securities that he may make
representations to the Listing Authority within such
period as may be specified in the notice; and
( d ) inform the issuer of the date on which the
discontinuance or suspension will take effect or of the
date on which the suspension took effect if the notice
under subarticle (1) states that suspension is to take
place with immediate effect:
Provided that the obligation to give notice of a decision to
suspend the listing of securities and the right of the issuer to make
representations in relation thereto shall be without prejudice to the
power of the Listing Authority to suspend the listing of any
securities with immediate effect.
(4) The Listing Authority may extend the period within which
representations may be made to it.
                        FINANCIAL MARKETS ġ CAP. 345.        13
(5) If having considered any representations made by the issuer
of the securities the Listing Authority decides - 
( a ) to discontinue or suspend the listing of the securities,
or 
( b ) if the suspension has taken effect, not to cancel it,
the Listing Authority shall give the issuer of the securities written
notice of its decision.
(6) If the Listing Authority decides to discontinue or suspend
the listing of securities, or if the suspension has taken effect, not to
cancel it, the issuer of the securities concerned shall have a right of
appeal to the Tribunal in accordance with article 43 and a notice
given under subarticle (5) shall inform the issuer of his right to
refer the matter to the Tribunal.
(7) The effect of cancelling a discontinuance is that the
securities concerned are to be re-admitted to the official list or such
other recognised list on which the securities concerned have been
admitted to listing.
Penalty or censure 
in respect of 
contraventions.
Substituted by:
XVII. 2002.114.
19. (1) If the Listing Authority considers that - 
( a ) an issuer of listed securities, or 
( b ) an applicant for admissibility to listing;
has contravened any provision of listing rules, it may, without
recourse to a court hearing, impose on such issuer or applicant as
the case may be, an administrative penalty not exceeding twenty
thousand liri.
(2) Whenever the Listing Authority is entitled to impose a
penalty on a person under this article in respect of a particular
matter, it may, in addition to, or instead of, imposing a penalty on
him in respect of that matter, publish a statement censuring such
person.
(3) Nothing in this article shall prevent the Listing Authority
from taking any other steps which it has power to take under this
Part of the Act.
(4) A penalty under this article is payable to the Listing
Authority as a civil debt. 
(5) The Listing Authority may not take action against any
issuer, applicant or person under this article after the end of the
period of two years beginning with the first day on which it knew
of the contravention unless proceedings against that issuer,
applicant or person, in respect of the contravention were begun
before the end of that period.
(6) For the purposes of subarticle (5) - 
( a ) the Listing Authority is to be treated as knowing of a
contravention if it has information from which the
contravention can reasonably be inferred; and 
( b ) proceedings against a person in respect of a
contravention are to be deemed to have begun when a
  14      CAP. 345. ħ                 FINANCIAL MARKETS
notice is given to him under article 20.
Notice of penalty 
or censure.
Substituted by:
XVII. 2002.114.
20. (1) If the Listing Authority proposes to take action against
any issuer, applicant or person under article 19 it shall give such
issuer, applicant or person a notice to this effect, stating the reason
for such action, and the person receiving such notice shall have the
right to make representations in writing to the Listing Authority
within fifteen days from receipt of such notice.
(2) A notice about a proposal to impose a penalty must state the
amount of the penalty proposed.
(3) A notice about a proposal to publish a statement must set
out the terms of the proposed statement.
(4) A notice about the imposition of a penalty must state the
amount of the penalty.
(5) A notice about the publication of a statement must set out
the terms of the statement.
(6) If after hearing such representations the Listing Authority
decides to take action against any issuer, applicant or person under
article 19, such issuer, applicant or person shall have a right of
appeal to the Tribunal under article 43.
Regulatory and 
investigatory 
powers of the 
Listing Authority.
Substituted by:
XVII. 2002.114.
21. In the fulfilment of its functions to ensure compliance with
any requirements or conditions for listed securities to remain listed,
the Listing Authority shall have,  mutatis mutandis , the regulatory
and investigatory powers of the competent authority in terms of
articles 32, 33 and 34.
Delegation of 
powers.
Substituted by:
XVII. 2002.114.
22. The Listing Authority may delegate any of its powers
under article 19 and under listing rules made pursuant to article
13( b ) and ( c ) to the Exchange or to such other recognised
investment exchange in relation to any securities listed on the
Exchange or on the other recognised investment exchange
concerned:
Provided that:
( a ) if the Listing Authority delegates any of its powers to
impose an administrative penalty or, to publish a
statement of censure under article 19(1), (2) and (3)  to
the Exchange or the other recognised investment
exchange concerned article 19(4) and article 20 shall
apply  mutatis mutandis  to the Exchange or to the other
recognised investment exchange concerned;
( b ) any penalty imposed under article 19 shall, in all
cases, be payable to the Listing Authority unless the
Listing Authority otherwise consents in writing:
Provided further that if the Listing Authority delegates any
of its powers under article 19(1), (2) and (3) as aforesaid neither the
Listing Authority nor the Exchange or other recognised investment
exchange concerned to which such powers have been delegated
may take action against any issuer, applicant or person after the end
of the period of two years beginning with the first day on which
either the Listing Authority or the Exchange or recognised
                        FINANCIAL MARKETS ġ CAP. 345.        15
investment exchange concerned as the case may be, knew of the
contravention unless proceedings against that issuer, applicant or
person, in respect of the contravention were begun before the end
of that period.
Non-liability for 
acts done in good 
faith.
Substituted by:
XVII. 2002.114.
23. Neither the Listing Authority nor any committee, officer or
employee thereof, nor any person appointed to perform any
functions thereby shall be liable in damages for anything done or
omitted to be done in the discharge or purported discharge of any
functions of the Listing Authority under this Act, unless the act or
omission is shown to have been done in bad faith.
PART IV
THE MALTA STOCK EXCHANGE
Establishment of 
the Exchange. 
Amended by: 
V.1992.2; 
XIV.1994.32; 
XXV.1995.433;
XVIII. 2002.110, 
115.
24. (1) There shall be a corporation to be called the Malta
Stock Exchange for the purposes, and having the powers and
functions as set out in this Act.
(2) The Exchange shall, for all intents and purposes of this Act
and of any other law, be deemed to be a body in respect of which
the competent authority has issued a recognition order in terms of
Part II of this Act, and any reference in this Act to a recognised
investment exchange shall unless the context otherwise requires, be
deemed to be a reference also to the Exchange:
Provided that nothing in this subarticle shall be deemed to
exempt the Exchange from the provisions of this Act, and provided
further that the Exchange shall at all times be in possession of the
requirements for recognition under this Act.
(3) The Exchange shall be a body corporate having a distinct
legal personality and shall be capable, subject to the provisions of
this Act and of the statute, of entering into contracts, acquiring,
holding and disposing of any property for the purpose of its
functions, of suing and being sued, and of doing all such things and
entering into all such transactions as are incidental or conducive to
the exercise or performance of its functions under this Act.
(4) Subject to the provisions of this Act the Exchange shall
have authority:
( a ) to provide facilities for the purchase and sale of quoted
securities;
( b ) to provide the place to be known as ''the Bor ża'' for the
trading of quoted securities;
( c ) to provide facilities for the maintenance of a central
securities depository;
( d ) to perform all other functions as are customarily
performed by a recognised investment exchange;
( e ) to do all such things as may be necessary or incidental
for the proper functioning of the Exchange.
  16      CAP. 345. ħ                 FINANCIAL MARKETS
(5) The legal and judicial representation of the Exchange shall
be vested in the chairman of the Council.
Council.
Amended by:
XVII. 2002.110.
25. (1) There shall be a Council of the Exchange for the
management and conduct of its business.
(2) The Council shall consist of a chairman and such other
members of the Council who may be appointed, elected or co-opted
as may be prescribed in the statute.
Functions of the 
Council.
Amended by:
XVII. 2002.110, 
116.
26. (1) Without prejudice to any other power or function
conferred on it by this Part of this Act or by any other law, the
Council shall be responsible for and have the powers and function
to - 
( a ) maintain the highest ethical standards in the conduct of
business in the Exchange or in connection therewith; 
( b ) promote and sustain an orderly, equitable and visible
securities market on the Exchange;
( c ) monitor trading and ascertain that it is conducted in an
orderly fashion;
( d ) to perform all other functions as are necessary to
establish a market in quoted securities on the
Exchange; and
( e ) do all such other things as may be necessary or
incidental for the proper performance and functioning
of the Exchange.
(2) The Council may delegate all or any of its functions under
this Part of the Act to the Executive Committee established in
accordance with the Statute or to any Committee established by the
Council in accordance with the Statute.
(3) The Council may at any time resume all or any of the
functions transferred to the Executive Committee or to any other
Committee under the provisions of subarticle (2).
Enforcement.
Added by:
XVII. 2002.117.
27. The Council shall, without prejudice to any of the
provisions of this Act, or of any regulations or directives made
thereunder, have such disciplinary and enforcement powers as are
set out in the Statute.
Statute and bye-
laws. 
Amended by: 
V.1992.2;
XVII. 2002.110, 
118.
28. (1) Subject to the provisions of this Act and of any
regulations or directives made thereunder, the Exchange shall be
governed by the statute as set out in the Schedule to this Act. 
(2) Subject to the provisions of this Act, and any regulations or
directives made thereunder and of the Statute, the Council shall,
with the approval of the competent authority, have the power to
make such bye-laws not inconsistent with this Act, or any
regulation or directive made thereunder or with the Statute as it
may deem necessary for the proper functioning of the Exchange.
(3) Without prejudice to the provisions of Part V of this Act, to
the provisions of articles 17 and 19 and to any sanctions as may be
                        FINANCIAL MARKETS ġ CAP. 345.        17
set out in listing rules in accordance with article 13(i), the bye-laws
may set out such rules as the Council may deem fit for the
investigation and sanction of breaches of the bye-laws.
(4) A copy of such bye-laws shall be kept by the Exchange, and
shall be available to the public for inspection. Maintenance of the
bye-laws on line shall constitute sufficient publication for the
purposes of this Act.
(5) Any reference in this Act to any rules or bye-laws of a
recognised investment exchange shall be deemed to include a
reference to the Statute and the bye-laws of the Exchange.
Amendments to the 
statute and bye-
laws.
Amended by: 
V.1992.2;
XVII. 2002.110, 
119.
29. (1) The Minister may, acting on the recommendation of
the competent authority make such regulations as he may deem fit
to give effect to the provisions of this Part of the Act, and without
prejudice to the generality of the foregoing may, by such
regulations amend, substitute or revoke the Schedule.
(2) The Minister may refer to the competent authority such
matters concerning the Exchange for its consideration as he may
deem fit and may refer back to the competent authority any
recommendation received from it for further consideration.
(3) The bye-laws may be amended, substituted or revoked by
the Council with the approval of the competent authority. A copy of
such amendment, substitution or revocation shall be kept in the
manner as is provided in article 28(4). Such amendments,
substitutions or revocations may not be retrospective.
Capital and 
financial provision.
Amended by:
XVII. 2002.110, 
120.
30. (1) A sum not exceeding five hundred thousand liri, which
amount shall constitute the initial capital of the Exchange, shall be
paid by the Government to the Exchange out of the Consolidated
Fund, and this without further appropriation other than this Act, by
warrant under the hand of the Minister authorising the Accountant
General to make such payment:
Provided that only an amount of two hundred thousand liri
shall become payable on the coming into force of this Act and the
balance shall be paid as and when required by the Exchange.
(2) The Exchange shall endeavour to meet all expenses in
connection with its operations through the income accruing to it
and for this purpose the Council may by means of bye-laws impose
such fees and charges, including fees for membership and listing of
companies, as it deems fit.
(3) For the purpose of carrying out any of its functions under
this Act, the Council may borrow or raise money in such manner,
from such person, body or authority, and under such terms and
conditions as it may deem appropriate and may secure the
repayment of any money borrowed or raised by hypothecation,
charge or pledge upon the whole or any part of its property or
assets, whether present or future.
(4) The Minister may make advances to the Exchange of such
sums as he may agree to be required by the Council for carrying out
any of its functions under this Act, which advances are to be repaid
  18      CAP. 345. ħ                 FINANCIAL MARKETS
by the Council on such terms and conditions as the Minister may
deem appropriate.
Annual accounts.
Amended by:
XVII. 2002.110, 
121.
31. (1) The Council shall as soon as possible but not later than
four months after the closing of each financial year of the Exchange
transmit to the competent authority a copy of the annual audited
accounts and the annual report on the activities of the Exchange
and shall publish such accounts and report in at least two daily
newspapers within one month thereafter.
(2) The accounts of the Exchange shall be audited by auditors
appointed by the Council with the approval of the competent
authority.
(3) All profits realised by the Exchange shall be put to a
reserve fund which shall be used for such purposes as the Council
may deem to be required to meet the objects of the Exchange,
including the repayment of any liabilities.
PART V
REGULATORY AND INVESTIGATORY POWERS
Power to require 
information.
Added by:
XVII. 2002.122.
32. (1) The competent authority may, by notice in writing,
require -
(i) any recognised investment exchange;
Cap. 370.
(ii) any person who holds or held a licence under the
Investment Services Act, or who appears to be or
to have been acting as a licence holder
thereunder; or
(iii) any person who is or was an officer, employee or
agent of a recognised investment exchange or
any other person who is or was involved in the
operations of a recognised investment exchange;
(iv) any person who is or was carrying on, or who
appears to be or have been carrying on any
activity in connection with quoted securities;
to do all or any of the following -
( a ) to furnish to the competent authority, at such time and
place and in such form as it may specify, such
information and documentation as it may require;
( b ) to furnish to the competent authority any information
or documentation as it may require verified in such
manner as it may specify;
( c ) to attend before the competent authority, or before a
person appointed by it, at such time and place as it
may specify, to answer questions and provide such
information and documentation as it may require;
( d ) to give the competent authority any assistance which it
may require and which that person is reasonably able
                        FINANCIAL MARKETS ġ CAP. 345.        19
to give.
(2) Without prejudice to anything which the competent
authority may require under subarticle (1), all information in
respect of listed securities held on the Register of the Central
Securities Depository shall be freely accessible to the competent
authority.
(3) The competent authority may take copies of any documents
furnished, provided or to which it has access under this article.
Cap. 9.
(4) Without prejudice to the provisions of article 642(1) of the
Criminal Code a statement made and any information or
documentation provided in pursuance of any requirement under this
article may be used in evidence against any person to whom they
relate:
Provided that nothing in this section shall preclude any
person with respect to any question that may be put to him from
claiming any privilege that would be competent to a witness before
a court of criminal jurisdiction in respect of any question the
answer to which may incriminate such person, and where the
competent authority disagrees that any such claim is justified, it
may by application to the Court of Appeal (Inferior Jurisdiction),
request such court to determine upon such claim, and the said court
shall, after hearing the person who has claimed such privilege and
the competent authority, determine such question with urgency:
Cap. 377.
Provided further that nothing in this article shall require
any person, who by reason of his calling, profession or office
becomes the depository of any secret confided in him, to disclose
any information or produce any document which is subject to the
duty of professional secrecy, unless upon the application of the
competent authority the Court of Appeal (Inferior Jurisdiction) is
satisfied, after hearing the person concerned and the competent
authority that notwithstanding the provisions of the Professional
Secrecy Act, the disclosure or production is necessary and should
be allowed, and the Court of Appeal shall determine any question
referred to it hereunder with urgency.
(5) The power to require the production of documentation
under the provisions of this article shall be without prejudice to
any, pledge, charge or other security interest claimed by any person
in relation to such documentation but notwithstanding such pledge,
charge or security interest, the competent authority shall have a
right to require production of such document and to make a copy
thereof.
(6) Where the Competent Authority has appointed a person
under subarticle (1)( c ) such person shall, for the purposes of
carrying out his functions under his appointment, have all the
powers conferred on the competent authority by this section,
including the power to apply to the Court of Appeal in the
circumstances described in subarticle (4), and a requirement made
by him shall be deemed to be and have the same force and effect as
a requirement of the Competent Authority.
Cap. 12.
  20      CAP. 345. ħ                 FINANCIAL MARKETS
Organisation and Civil Procedure shall make rules with respect to
any procedures under this article.
(8) The Minister responsible for justice may prescribe fees in
connection with procedures before the Court of Appeal under this
article.
Appointment opf 
inspectors.
Substituted by:
XVII. 2002.123.
33. (1) The competent authority may, whenever it deems it
necessary or expedient, appoint an inspector or inspectors to
investigate and report on the affairs of any persons referred to in
article 32(1)(i) to (iv).
(2) An inspector appointed under subarticle (1) -
( a ) may, if he thinks it necessary or expedient for the
purposes of an investigation, investigate the affairs of
any person mentioned in subarticle (1);
( b ) shall have and may exercise all the powers, conferred
on the competent authority by article 32, including the
power to apply to the Court of Appeal in the
circumstances described in subarticle (4) of that
article, and any requirement made by him shall be
deemed to be and have the same force and effect as a
requirement of the competent authority;
( c ) may, and if so directed by the competent authority
shall, make interim reports and on the conclusion of
his investigation shall make a final report to the
competent authority.
(3) In appointing an inspector or inspectors under subarticle (1)
the competent authority may direct that the investigation shall be
carried out within such time and shall be confined to such specific
or general matters as the competent authority may deem fit.
(4) In the event that it results that the investigated person shall
have been in breach of any provision of law, regulation or in breach
of a licence condition, the competent authority shall have power to
order that all reasonable expenses of an investigation pursuant to
this article be paid by any of the persons concerned. Any such order
shall be communicated to the persons concerned by a notice for
payment. A notice for payment under this article shall:
( a ) be in writing; and
( b ) require the authorised person to pay the expenses of
and incidental to the investigation before the end of
such period being not less than fourteen days from the
date of service of the notice, as may be specified in the
notice.
(5)  Any person who is aggrieved by a decision of the
competent authority with respect to any order concerning the
expenses of and incidental to an investigation under this article
shall have a right of appeal to the Tribunal in accordance with
article 43.
                        FINANCIAL MARKETS ġ CAP. 345.        21
Right of entry.
Added by:
XVII. 2002.124.
34. (1) Any officer, employee or agent of the competent
authority, on producing, if required, evidence of his authority, may
enter premises occupied by a person on whom a notice has been
served under article 32 or whose affairs are being investigated
under article 33, for the purpose of obtaining therefrom the
information or documents required by that notice, or otherwise for
the purpose of the investigation, and of exercising any of the
powers conferred by the said articles.
(2) Where any officer, employee or agent of the competent
authority has cause to believe that if such notice as is referred to in
subarticle (1) were served it would not be complied with or that any
documents to which it could relate would be removed, tampered
with or destroyed, such officer, employee or agent may, on
producing, if required, evidence of his authority, enter any
premises referred to in subarticle (1) for the purpose of obtaining
therefrom any information or documents specified in the authority,
being information or documents that could have been required
under such notice as is referred to in subarticle (1).
(3) For the purposes of any action taken under the provisions of
this article, the competent authority may request the assistance of
the Commissioner of Police, who may for such purpose exercise
such powers as are vested in him by law.
No enquiries to be 
made into the 
affairs of any 
person trading on a 
recognised 
investment 
exchange.
Substituted by:
XXVI. 2002.125.
Cap. 375.
35. Nothing in this Act or any regulations made thereunder, or
in any rules or bye-laws of a recognised investment exchange shall
authorise the Minister, the competent authority, the Listing
Authority, any recognised investment exchange or any person
whomsoever to enquire or cause an enquiry to be made into the
affairs of any person except for the purpose of ensuring compliance
with the provisions of this Act, any regulations made thereunder,
the rules and bye-laws of the recognised investment exchange
concerned and the Insider Dealing and Market Abuse Offences Act
or any regulations made thereunder.
Insider dealing and 
market abuse.
Added by:
XVII. 2002.126.
Cap. 375.
36. (1) Where the Exchange or any recognised investment
exchange suspects that there may exist circumstances to indicate
that any offence in terms of the Insider Dealing and Market Abuse
Offences Act may have been committed, is being committed or is
likely in the circumstances to be committed, it shall report such
suspicion to the competent authority.
(2) Where the competent authority, whether pursuant to a
report in terms of subarticle (1), or otherwise, suspects that there
may exist circumstances to indicate that an offence in terms of the
Insider Dealing and Market Abuse Offences Act may have been
committed, is being committed or is likely in the circumstances to
be committed, it shall appoint in an inspector or inspectors under
article 33 to carry out an investigation for the purpose of
establishing whether or not any offence in terms of the said Act
may have been committed, is being committed or is likely in the
circumstances to be committed, and to report the results of the
investigation to it.
(3) Where from an inspector’s final report the competent
authority has reason to believe that an offence in terms of the
  22      CAP. 345. ħ                 FINANCIAL MARKETS
Insider Dealing and Market Abuse Offences Act has been
committed the competent authority shall refer the matter together
with a copy of the report to the Commissioner of Police.
(4) A person found guilty of insider dealing or market abuse
shall be liable to pay to such person as may be determined by the
Tribunal compensation in an amount to be fixed by the tribunal on
the application of any person who in a transaction for the purchase
or sale of securities entered into with the offender or with a person
acting for or on the offender’s behalf suffers loss. An action under
this subarticle shall be barred by the lapse of two years from the
date on which judgement in which the person liable to pay
compensation has been found guilty shall have become  res
judicata .
(5) The right to claim compensation under this section shall not
prejudice, and shall be in addition to, the right of any person to
claim damages under any other law.
Co-operation with 
overseas regulatory 
authority.
Added by:
XVII. 2002.126.
Amended by:
IV. 2003.20.
37. (1) The competent authority may exercise the following
powers at the request of or for the purposes of assisting an overseas
regulatory authority:
( a ) the powers of inquiry under article 32;
( b ) the power to appoint inspectors under articles 33 and
36;
( c ) the power to communicate to the overseas regulatory
authority information which is in the possession of the
competent authority, whether or not as a result of the
exercise of any of the above powers.
Cap. 370.
(2) In the exercise of the powers assigned to the competent
authority by virtue of this article, the provisions of article 17(2) of
the Investment Services Act shall apply  mutatis mutandis .
Confidentiality of  
information. 
Substituted by:
XVII. 2002.127.
Amended by:
IV. 2003.21.
Cap. 370.
38. (1) Recognised investment exchanges and their officers
and other staff shall deal with all documents and other information
relating to the relevant recognised investment exchange or to
dealings therewith or therein, or otherwise obtained for the
purposes of, or pursuant to, any of the provisions of this Act or of
any regulations made thereunder and not yet officially divulged,
and all matters and things related to such documents and
information as confidential and protected by the duty of
professional secrecy, and shall not disclose the same to any other
person, and the provisions of article 26 of the Investment Services
Act shall apply  mutatis mutandis .
(2) The competent authority, its officers and other staff are
prohibited from using such documents and information and all
other matters which in accordance with subarticle (1) are
confidential and protected by the duty of professional secrecy and
which comes to their knowledge by virtue of their position, in order
to secure any advantage for themselves or for any third parties
whether such third parties are connected or not with the securities
market.
(3) The provisions of subarticle (2) shall apply  mutatis
                        FINANCIAL MARKETS ġ CAP. 345.        23
mutandis  to all recognised investment exchanges, their officers and
other staff.
Cap. 375.
(4) Any person who acts in contravention of subarticle (2) or
(3) shall, without prejudice to the provisions of the Insider Dealing
and Market Abuse Offences Act, be guilty of an offence against
this Act, and shall on conviction be liable to a fine ( multa ) of five
thousand liri or to a term of imprisonment not exceeding two years
or to both such fine and imprisonment.
(5) Any person other than those mentioned in subarticles (1)
and (2) who acquires any documents or any other information to
which the said subarticles relate and who uses such documents or
information, with intent to secure advantage either for himself or
any other person, shall without prejudice to the provisions of the
Insider Dealing and Market Abuse Officers Act, be guilty of an
offence against this Act and shall on conviction be liable to the
same penalty established for an offence against the provisions of
subarticles (2) and (3).
Powers of the 
Court to make 
certain orders.
Added by:
XXVII. 2002.128.
39. (1) If, on an application by the competent authority made
to the Civil Court, First Hall, the said court is satisfied:
( a ) that there is reasonable likelihood that a person will
contravene any of the provisions of this Act, the
regulations made thereunder or the rules or bye-laws
of a recognised investment exchange or will
contravene or fail to comply with any obligation,
requirement, directive, or order made or given under
any of the provisions of this Act, the regulations made
thereunder or the rules or bye-laws of a recognised
investment exchange; or
( b ) that a person has contravened any such provision or
has contravened or failed to comply with any such
obligation, requirement, directive, or order and that
there is a reasonable likelihood that the contravention
will continue or be repeated, 
the court may give such orders as it may deem appropriate to
restrain the contravention.
(2) If, on an application by the competent authority made to the
Civil Court, First Hall, the said court is satisfied -
( a ) that a person has contravened any of the provisions of
this Act, the regulations made thereunder, the rules of
a recognised investment exchange or any obligation,
requirement, directive, or order made or given under
any of the provisions of this Act or under the rules or
bye-laws of a recognised investment exchange; and
( b ) that there are steps which could be taken for
remedying the contravention,
the court may give such orders as it may deem appropriate to
require that person and any other person who appears to the court to
have been knowingly concerned in the contravention, to take such
steps as the court may direct to remedy it or to mitigate its effect, as
  24      CAP. 345. ħ                 FINANCIAL MARKETS
appropriate.
(3) If, on an application by the Competent Authority made to
the First Hall Civil Court, the court is satisfied -
( a ) that a person has contravened any of the provisions of
this Act, the regulations made thereunder, the rules or
bye-laws of a recognised investment exchange or any
obligation, requirement, directive, or order made or
given under any of the provisions of this Act, the
regulations made thereunder or the rules or bye-laws
of a recognised investment exchange; or
( b ) that any person has been knowingly concerned in the
contravention,
it may make an order restraining him from disposing of, or
otherwise dealing with, any assets of his which it is satisfied he is
reasonably likely to dispose of or otherwise deal with.
(4) If, on an application made under subarticle (1), the court is
further satisfied that -
( a ) profits have accrued to any person as a result of the
contravention; or 
( b ) an investor has suffered loss or has been otherwise
adversely affected as a result of that contravention,
the court may order the person responsible for the contravention to
pay into court such sum as appears to it to be just having regard to
the extent of the profit, loss or adverse effect as aforesaid, and
order such sum to be paid out as the court may direct to the persons
who have entered into transactions as a result of which profits have
accrued or losses or adverse effects have been suffered as
aforesaid.
(5) For the purposes of this article the court may order the
production by any person of such accounts and the provision of
such information, and verified in such manner, as the court may
deem appropriate.
(6) The First Hall Civil Court shall after hearing the person or
persons mentioned in this article and the competent authority
determine an application made under this section with urgency.
(7) The provisions of this article shall be without prejudice to
any right of any aggrieved person to bring proceedings directly in
respect of any right such person may otherwise have independently
of the competent authority.
Cap. 12.
(8) The provisions of this article shall be without prejudice to
the right of any person to demand the issue of any precautionary act
under Title VI of Book Third of the Code of Organisation and Civil
Procedure.
Offences.
Added by:
XXVII. 2002.128.
40. (1) Any person who contravenes or fails to comply with
any of the provisions of article 32 or of any court order made under
article 39 or fails to comply with any condition, obligation,
requirement, order, directive, rule or regulation made or given
under any of the provisions of this Act shall be guilty of an offence
                        FINANCIAL MARKETS ġ CAP. 345.        25
under this Act.
(2) Any person who in purported compliance with any
requirement imposed by or under this Act, the regulations made
thereunder or the rules or bye-laws of a recognised investment
exchange knowingly or recklessly gives the competent authority,
any person appointed by it under article 32(1)( c ) or any inspector
appointed under article 33 information which is false or misleading
in a material particular shall be guilty of an offence.
(3) Any person who with intent to avoid detection of the
commission of an offence under this Act, removes, destroys,
conceals or fraudulently alters any book, document or other paper,
shall be guilty of an offence under this Act.
(4) Any person who intentionally obstructs a person exercising
rights conferred by this Act shall be guilty of an offence under this
Act.
Criminal 
proceedings.
Added by:
XXVII. 2002.128.
41. (1) A person guilty of an offence under the provisions of
section 40 shall be liable on conviction to a fine ( multa ) not
exceeding two hundred thousand liri or to a term of imprisonment
not exceeding four years, or to both such fine and imprisonment.
(2) No proceedings for an offence under this Act shall be
commenced without the consent of the Attorney General.
(3) The provisions of this Act shall not affect any criminal
proceedings that may be competent under any other law.
PART VI
FINANCIAL SERVICES TRIBUNAL
Appeal to 
Financial Services 
Tribunal.
Added by:
XXVII. 2002.128.
42. (1) The Tribunal shall have the exclusive competence to
determine all appeals as may be referred to it under articles 4(10),
16(7), 17(3), 18(6), 20(6) and 33(5) or under any regulations made
by the Minister under articles 3 and 49.
(2) An appeal shall also lie to the Tribunal from a decision of
the Council of the Malta Stock Exchange under paragraphs 5(1),
6(1) and 6(2) of the Statute as well as from any decision of a
recognised investment exchange to suspend or revoke membership
of any of its members or to impose a penalty in excess of five
hundred Maltese liri.
Ground for appeal.
Added by:
XXVII. 2002.128.
43. (1) An appeal to the tribunal under article 42 shall lie only
on any of the following grounds -
( a ) that the competent authority, the Listing Authority, the
Exchange or the recognised investment exchange
concerned, as the case may be, has wrongly applied
any of the provisions of this Act, of the regulations
made thereunder or of the rules or bye-laws of the
Exchange or the recognised investment exchange
concerned; or
  26      CAP. 345. ħ                 FINANCIAL MARKETS
( b ) that the decision of the competent authority, the
Listing Authority, the Exchange or the recognised
investment exchange concerned, as the case may be,
constitutes an abuse of discretion, provided that the
discretion of any of the aforesaid bodies may not, so
long as it has been exercised properly, be queried by
the tribunal.
(2) An appeal made under this section shall not, unless the
tribunal otherwise determines in the course of the proceedings,
suspend the operation of any decision from which the appeal is
made except in the case of an appeal from:
( a ) a decision to discontinue the listing of any securities as
is mentioned in article 18(5); and
( b ) a decision to publish a statement of censure under
article 20:
Provided that a decision on any of the matters as is referred
to in paragraphs ( a ) and ( b ) shall become operative on the date of
the decision of the tribunal dismissing the appeal, or on the date on
which the appeal is abandoned.
Appeal from 
decision of the 
Financial Services 
Tribunal.
Added by:
XXVII. 2002.128.
44. There shall be an appeal on questions of law only from a
decision of the Tribunal to the Court of Appeal (Inferior
Jurisdiction). Upon the hearing of such an appeal, the Court of
Appeal shall have all the powers of the Tribunal to make orders.
PART VII
MISCELLANEOUS
Trading outside 
recognised 
investment 
exchanges.
Added by:
XXVII. 2002.128.
45. (1) Quoted securities may not be traded outside the
recognised investment exchange on which they are listed: 
Provided that with effect from such date as the Minister
may by order establish and save as may otherwise be determined by
regulations made by the Minister in accordance with article 3( g ),
quoted securities may be traded outside the recognised investment
exchange on which such quoted securities are listed and other than
by means of facilities provided by any such recognised investment
exchange.
(2) Nothing in this Act shall preclude:
Cap. 386.
( a ) such quoted shares or debentures as are mentioned in
article 395(1)(b) of the Companies Act, from being
traded outside a recognised investment exchange and
other than by means of facilities provided by any
recognised investment exchange;
Cap. 370. ( b ) units as defined by the Investment Services Act, of a
collective investment scheme licensed under that Act,
whether or not they are quoted securities, from being
traded outside a recognised investment exchange and
other than by means of facilities provided by any
                        FINANCIAL MARKETS ġ CAP. 345.        27
recognised investment exchange, by or with the
manager of the scheme or a person acting for him and
under his authority.
( c ) securities issued by or guaranteed by the Government
from being traded outside a recognised investment
exchange as the minister may determine.
Transfer of 
securities.
Added by:
XXVII. 2002.128.
46. Notwithstanding the provisions of any other law, the
transfer of quoted securities in quoted companies need not be made
by an instrument in writing.
Civil Code.
Added by:
XXVII. 2002.128.
Cap. 16.
47. The provisions of article 1966(3) and (4) of the Civil Code
shall not apply with respect to quoted securities and the privilege
referred to in Title XXI of Part II of Book Second of the said Code
shall arise where the pledge has been duly registered with the
Exchange in accordance with the bye-laws.
Temporary 
suspension of 
operations.
Substituted by:
XVII. 2002.129.
48. (1) Without prejudice to the provisions of article 17 the
Listing Authority shall have the power to suspend temporarily the
trading in securities on any recognised investment exchange, if in
its opinion, the orderly transaction of business is being prevented,
or is likely to be prevented because of the occurrence of:
( a ) any emergency or natural disaster;
( b ) any economic, financial or political crisis; or
( c ) any other event which disrupts trading.
(2) The Minister may recommend to the Listing Authority the
temporary suspension of trading if he is of the opinion that the
orderly transaction of business of a recognised investment
exchange is being disrupted because of any of the occurrences
referred to in subarticle (1)( a ), ( b ) or ( c ) which in the opinion of the
Minister merits such closure.
(3) The Listing Authority may order that for such time as it
may determine no trading of any kind may be transacted in one or
more specified securities of quoted companies if it has reasons to
believe that this would be in the interest of the recognised
investment exchange concerned, the public or investors generally:
Provided that a temporary suspension ordered by the
Listing Authority under this article may not be of more than thirty
days in a period of three months unless such longer suspension is
approved by the Minister.
(4) No transaction may be executed at any time in the event of
the temporary suspension of trading under this article. Any
transaction so executed in contravention of this subsection shall be
invalid.
Power to make 
regulations.
Added by:
XVII. 2002.130.
Substituted by:
IV. 2003.22.
49. The Minister, acting on the advice of the competent
authority, may make regulations:
( a ) to give effect to the provisions of this Act, including
regulations for the better regulation of recognised
investment exchanges and, or the admissibility to
listing of securities thereon and to provide for the
  28      CAP. 345. ħ                 FINANCIAL MARKETS
direct or indirect membership of, or access to,
recognised investment exchanges within the terms of
and in line with Malta’s international commitments;
( b ) to govern the transfer of ownership and, or delivery of
securities quoted on a recognised investment
exchange, clearing and settlement of transactions
effected on a recognised investment exchange,
payment in respect of the transfer of securities quoted
on a recognised investment exchange, pledging of
securities quoted on a recognised investment
exchange;
( c ) to regulate the application of article 50 to recognised
investment exchanges, other than the Exchange, and to
commercial partnerships other than companies;
( d ) to regulate the transposition, implementation and
giving effect to the provisions, requirements,
obligations and commitments relating to regulation of
recognised investment exchanges and, or the
admissibility to listing of securities thereon arising out
of membership of, affiliation to or relationship with
international or regional organisations or groupings of
countries or out of any treaty, convention or other
international agreement whether bilateral, regional or
multilateral, to which Malta is a party.
Exemptions from 
income tax and 
duty on 
documents.  
Amended by:
V. 1992.5;
XVI.1994.14;
XVII. 2002.110; 
131. 
Cap. 123.
50. * (1) Notwithstanding anything contained in the Income Tax
Act, or in any enactment replacing the said Act where a company
acquires the status of a quoted company, the rate of income tax
chargeable on the gains or profits arising to it shall be reduced in
respect of the said gains or profits so arising in the year in which it
acquires the status of a quoted company on the Exchange and in the
subsequent two years as follows:
- by two percentage points if 20% or more but less than
30% of its issued voting share capital is offered to the
public as a listed security;
- by 3.5 percentage points if 30% or more but less than
40% of its issued voting share capital is offered to the
public as a listed security;
- by five percentage points if 40% or more of its issued
voting share capital is offered to the public as a listed
security:
Provided that any of the percentage points reduction listed
above shall be applicable on the issue of new shares or where
existing shares within the percentage proportion stated are actually
offered for sale to the public by the existing shareholders and shall
be effective from the tax year in which the new shares or existing
shares are issued as aforesaid:
Provided further that the reduction in the rate of tax shall
apply only in respect of a quoted company which has been so
* See  Legal Notice 16 of 1997.
                        FINANCIAL MARKETS ġ CAP. 345.        29
quoted within five years from the date this Act comes into force but
the Minister may, if he deems it to be in the public interest, extend
this period to ten years by notice in the Gazette:
Provided further that any one company may not benefit
more than once in the said period of five or ten years as the case
may be but the percentage points reduction in tax as aforesaid can
increase depending on the percentage of issued voting share capital
offered to the public within the three years from the date the
company acquired the status of a quoted company as aforesaid.
Cap. 364.
Documents and Transfers Act, or in any Act replacing that Act, no
duty shall be payable in accordance with that Act in respect of any
transfer of any securities of a quoted company, or the transfer of
any securities of the Government or any body corporate established
by law, where such transfer is made in the Exchange.
Executive title.
Added by:
XVII. 2002.132.
Cap. 12.
51. (1) An order for the payment of expenses of and incidental
to, an investigation under article 33(4) shall constitute an executive
title within the meaning and for the purposes of Title VII of Part I
of Book Second of the Code of Organisation and Civil Procedure.
(2) If all or any of the amount payable under an order under
article 33(4) is outstanding at the end of the specified period, the
Competent Authority may proceed to enforce payment after two
days from the service on the debtor of an intimation for payment
made by means of a judicial act.
Exclusion of 
liability.
Added by:
XVII. 2002.132.
52. Neither the competent authority, nor the Listing Authority,
nor any officer or employee of the competent authority or the
Listing Authority, nor any other person appointed thereby to
perform a function under this Act shall be liable in damages for
anything done or omitted to be done in the discharge or purported
discharge of any functions under this Act or any rules or
regulations made thereunder, unless the act or omission is shown to
have been done in bad faith.
Amended by: 
L.N. 2 of 1992; 
V.1992.2. 
Substituted by: 
L.N. 76 of 1994.
Amended by:
IX. 1997.5;
L.N. 90 of 1999;
L.N. 91 of 1999;
L.N. 124 of 2000.
Substituted by:
XVII. 2002.133.
Amended by:
L.N. 370 of 2003.
SCHEDULE
ġArticle 28ħ
THE STATUTE
1. Applicability
This Statute applies to the Malta Stock Exchange.
2. Interpretation and General Provisions
(1) In this Statute unless the subject or context otherwise
requires:
"the Act" means the Financial Markets Act;
"College of Stockbroking Firms" means the College established
by article 9 of the Statute;
  30      CAP. 345. ħ                 FINANCIAL MARKETS
"Committee" means any Committee established by article 10 of
the Statute;
"securities" means -
( a ) shares, stock, bonds, debentures, certificates of
deposits, notes and other like instruments denoting
ownership or creating or acknowledging indebtedness:
Provided however that securities shall not mean:
(i) any instrument acknowledging or creating
indebtedness for, or for money borrowed to
defray, the consideration payable under a
contract for the supply of goods or services;
(ii) a cheque or other bill of exchange, a banker's
draft or a letter of credit; or
(iii) a banknote, a statement showing a balance in a
current deposit or savings account or (by reason
of any financial obligation contained in it) to a
lease or other disposition of property, or an
insurance policy;
Cap. 370.
( b ) units in a collective investment scheme as defined in
the Investment Services Act;
( c ) warrants, options, certificates or other instruments,
including any record whether or not in the form of a
document, entitling the holder to subscribe for,
acquire, sell or otherwise dispose of, underwrite or
convert any instrument or an interest in any instrument
falling within this definition or for any currency;
( d ) certificates or other instruments which confer property
rights in respect of any instrument falling within this
definition;
( e ) futures and foreign exchange contracts entered into for
investment purposes or foreign exchange acquired or
held for investment purposes;
( f ) rights under a contract for differences or under any
other contract the purpose or intended purpose of
which is to secure a profit or avoid a loss by reference
to fluctuations in the value or price of property of any
description or in an index or other factor designated
for that purpose in the contract.
3. Membership
Members.
Cap. 370.
(1) The membership of the Exchange shall consist of
stockbrokers licensed in terms of the Investment Services Act, to
carry out the functions of broker for the purchase or sale of quoted
securities:
Provided that a person or persons nominated by the Central
Bank shall be licensed to act as stockbroker for the purpose of
trading solely in securities issued by the Government and of
executing transactions on behalf of Government, of quoted
securities of companies or other entities, owned wholly or in part
                        FINANCIAL MARKETS ġ CAP. 345.        31
by the government, subject to the following conditions:
( a ) such person or persons will not be entitled to vote at
any meeting of the members of the Exchange or the
College of Stockbrokers;
( b ) such person or persons will take a position and act as a
principal for the Central Bank;
( c ) such person or persons are exempt from the
applicability of the provisions of paragraphs ( b ) and
( c ) of subarticle (3), subarticles (4) to (6), (9), (13) and
(14) of this article.
Application.
for admission to membership in writing to the General Manager, in
such form as the Council may from time to time by bye-laws
establish.
Qualifications.
Exchange unless such person:
Cap. 370.
Services Act, (such person being hereinafter referred
to as a "licensed stockbroker");
( b ) is, in the opinion of the Council, a fit and proper
person to be a member of the Exchange;
( c ) deposits such security and, or, indemnity, if any, as the
Council may in the bye-laws establish:
Provided that the security and, or, indemnity shall
be established in an amount which shall be equal to all
stockbrokers, so however that the Council may at any
time, with the consent of the competent authority, alter
the amount of the security and, or, indemnity as it may
deem fit, giving when such amount is raised at least
thirty days within which licensed stockbrokers shall
have to comply; and
( d ) possesses such other qualifications and fulfils such
other requirements as may from time to time be
established by bye-laws.
Notification.
the Council shall fix a date on which it will consider such
application and, at least six weeks prior to that date, the Exchange
shall post a notice at the Bor ża stating the name, address and other
relevant details of the applicant, and giving the date, which shall
not be less than four weeks after the date of posting of the notice by
which any person may make written submissions to the Council
with respect to such application.
Consideration.
considered by the Council on the date fixed in accordance with
subarticle (4) and subsequently at such other meeting of the
Council as the Council may deem to be necessary.
Voting.
resolution of the Council supported by at least four votes.
  32      CAP. 345. ħ                 FINANCIAL MARKETS
Acceptance/ 
Rejection.
(7) The General Manager, on the direction of the Council
following such voting, shall in writing inform the applicant of the
decision of the Council with regard to his application. Upon being
admitted to membership by the Council the candidate shall become
a member of the Exchange.
Disclosure. (8) The Council shall be required to state the reasons for its
decision.
Rejected 
applications.
(9) Following the rejection of an application for membership,
the applicant may not again apply for membership before the lapse
of twelve calendar months from the date of such rejection.
Registered 
addresses.
(10) Every licensed stockbroker admitted to membership of the
Exchange as aforesaid shall furnish the General Manager with a
business address in Malta, not being a post office box number, to
which all communications and correspondence shall be sent.
Members shall notify the General Manager of any change of
address.
Members’ 
Register.
(11) A register of members together with their registered
addresses shall be kept and maintained by the Exchange and shall
be open to inspection by members and the public during normal
business hours.
Resignation. (12) ( a ) A member wishing to resign membership shall do so in
writing, to the Council which shall forthwith post a
notice on the notice board at the Bor ża. Such notice
shall remain posted for such time as may be
determined in the bye-laws.
( b ) The members of the Exchange, including the member
intending to resign shall within such time as may be
established in the bye-laws advise the Council of any
outstanding debts, obligations, or commitments of the
member intending to resign and of any outstanding
dealings and transactions in which such member may
be concerned in connection with its activities as a
member of the Exchange.
( c ) Notwithstanding its resignation a member shall retain
all its obligations and liabilities arising under the Act,
this Statute and the bye-laws unless the Council shall
have discharged such member therefrom in writing.
Re-admission. (13) Any licensed stockbroker that has resigned its membership
may re-apply for admission; such new application shall be subject
to the conditions applicable to the admission of new members at the
time of its filing.
4. Disciplinary Procedure
In the fulfilment of its functions in terms of law:
(1) The Council shall have -
( a ) such regulatory and monitoring powers in relation to
issuers of listed securities as may be specified by
listing rules made under Part III of the Act;
( b ) such disciplinary and enforcement powers in relation
                        FINANCIAL MARKETS ġ CAP. 345.        33
to issuers of listed securities as may be specified by
listing rules under Part III of the Act;
( c ) such further powers as may be delegated to the
Council by the Listing Authority under the Act.
(2) It shall be the duty of the Council to enforce the Statute
and bye-laws and to ensure compliance therewith by:
( a ) the members of the Exchange;
Cap. 370.
Services Act, acting or purporting to act as
intermediaries in relation to members of the Exchange.
(3) Any of the persons mentioned in subarticles (1) and (2) of
this article whose conduct is being investigated by the Council,
shall be given the opportunity to appear before the Council in their
own defence, either in person or assisted by an advocate, on such
day and at such time as the Council may determine, being not less
than fourteen days from the service of notice on such person giving
him particulars of his right to make his submissions and to produce
such evidence as the Council may allow.
5. Suspension and revocation of membership
(1) The Council may suspend or revoke the membership
granted to any licensed stockbroker:
Cap. 370.
( a ) if the member no longer holds a licence to act as
stockbroker under the Investment Services Act;
( b ) if it is of the opinion that such person is no longer a fit
and proper person to remain a member of the
Exchange;
( c ) if the member no longer fulfils the requirements of, or
has failed to satisfy or comply with or has contravened
any provisions of the Statute or bye-laws or in
purported compliance with any such provisions has
furnished the Council false, inaccurate or misleading
information; or has acted in a manner which is
detrimental to the Exchange, its members or the public
in general;
( d ) in any circumstances as may be provided for in this
Statute and the bye-laws.
(2) Suspension of membership under this Act shall be for such
period not in excess of one year as the Council may determine,
provided that such suspension may be extended by the Council for
a good and sufficient reason. During such period of suspension the
suspended member shall not carry on business as a member of the
Exchange. A copy of the notice of the revocation or suspension of
membership shall be kept in a book kept for the purpose by the
Council, which book shall be open to inspection by the public at all
reasonable times.
(3) Before suspending or revoking membership of a licensed
stockbroker the Council shall give the licensed stockbroker written
notice thereof stating the reasons for such suspension or revocation
  34      CAP. 345. ħ                 FINANCIAL MARKETS
of membership.
(4) Where a member has resigned, or where membership of a
member is revoked or where a member is insolvent or is unable to
meet its liabilities to other members or to the Exchange, the
Council shall have the power to retain or to call in the security
deposited in terms of article 3(iii)( c ) of this Statute and to place
such monies or other sums realised thereby to such reserve or other
account as the Council shall deem fit and to use all or any of such
monies to discharge the liabilities of the member towards fellow
members to the Exchange and any surplus, shall be refundable to
the member.
6. Other Disciplinary Measures
(1) If it appears to the Council that a member of the Exchange
has contravened or has failed to comply with any of the provisions
of the Statute or the bye-laws, the Council may publish a statement
to that effect.
(2) If it appears to the Council that a member has contravened
or has failed to comply with any of the provisions of this Statute or
the Bye-laws, the Council may require him to pay an administrative
penalty not exceeding five thousand liri (Lm5,000) in respect of
such contravention or failure. A penalty under this sub-article shall
be payable to the Exchange.
(3) Before publishing a statement under subarticle (1) or
imposing an administrative penalty under subarticle (2), the
Council shall:
( a ) give the person concerned written notice of the
proposed statement providing reasons therefore and
setting out the terms of the statement; or
( b ) give the person concerned written notice of the
proposed administrative penalty, stating the amount of
the penalty and of the reasons for which it is proposed
to act.
(4) Where the reasons stated in the written notice of the
proposed statement relate specifically to matters which -
( a ) refer to a person identified in the notice other than the
person who is the subject of the notice; and
( b ) are in the opinion of the Council prejudicial to that
person in any office or employment,
the Council shall, unless it considers it impracticable to do so,
serve a copy of the notice on that person.
(5) A notice served on a person pursuant to the provisions of
subarticle (3) and (4) shall give particulars of the person's right of
appeal under section 42 of the Act and of the provisions of
subarticle (6) of this article.
(6) Subject to the provisions of subarticle (5), upon expiry of
such period as may be specified in the notice, (being not less than
fourteen days from the date of service of the notice under subarticle
(3) or of a copy of the notice under subarticle (4), whichever was
                        FINANCIAL MARKETS ġ CAP. 345.        35
the later), the Council may publish the proposed statement and,
after publication shall send a copy to that person and to any person
on whom a copy of the notice was served under subarticle (4). 
(7) Subject to the provisions of subarticle (5), upon expiry of
such period as may be specified in the notice under subarticle (3),
(being not less than fourteen days from the date of service of the
notice), the Council may give the person concerned a notice for
payment. A notice for payment under this subarticle must:
( a ) be in writing; and
( b ) require the notified person to pay the penalty before
the end of such period (being not less than fourteen
days from the date of service of the notice) as may be
specified in the notice.
(8) Nothing in this article shall restrict or otherwise prejudice
the powers of the competent authority or the Listing Authority
under the Act.
7. Power to issue directives
(1) Without prejudice to any of the powers delegated to it
under the Act and any of the powers conferred on it by this Statute,
the Council may, whenever it deems it necessary give any of the
persons mentioned in article 4(2) of this Statute, by notice in
writing, such directives as it may deem appropriate in the
circumstances; and any person as is referred to in article 4(2) of
this Statute to whom or to which notice is given shall obey, comply
with and otherwise give effect to any such directive within the time
and in the manner stated in the directive or further directive.
(2) Without prejudice to the generality of the foregoing
provisions of this article, a directive under this article may -
( a ) require anything to be done or be omitted to be done,
or impose any prohibition, restriction or limitation, or
any other requirement, and confer powers, with respect
to any transaction or other act, or to any assets, or to
any other thing whatsoever;
( b ) require that any person having functions in relation to
the persons mentioned in article 4(2) of this Statute be
removed or removed and replaced by another person
acceptable to the Council;
( c ) in the event of a member which is to cease or has
ceased operations or is to wind up or has wound up its
affairs, provide for the appointment of a person to take
possession and control all documents, records, assets
and property belonging to or in the possession or
control of the member by reason of or in connection
with his membership of the Exchange.
(3) The power to give directives under this article shall include
the power to vary, alter, add to or withdraw any directive, as well
as the power to issue new or further directives.
(4) Where the Council is satisfied that the circumstances so
warrant, it may at any time subject to the provisions of article 5 of
  36      CAP. 345. ħ                 FINANCIAL MARKETS
this Statute, make public any directive it has given under any of the
provisions of this article.
8. Council
(1) The Council established in virtue of article 4 of the Act
shall be constituted in accordance with the following paragraphs of
this article.
Chairman (2) The Minister shall appoint one of the members of the
Council as Chairman.
Membership in the 
Council
(3) ( a ) The Council shall consist of a Chairman and four other
members.
( b ) The members of the Council, including the Chairman,
shall be appointed by the Minister from among persons
who, in his opinion, have had experience of and shown
capacity in matters relating to business, financial
activities, the professions or academic affairs.
Co-opted members (4) In addition to the above members the Council may co-opt
not more than two other persons to be members of the Council as it
may deem expedient.
Deputy Chairman (5) The Council shall elect one of its members as Deputy
Chairman who shall act as chairman in the absence of the
Chairman.
Terms of office (6) The members of the Council shall hold office for a period
not exceeding three years but shall be eligible for re-appointment.
Executive 
Committee
(7) The Council shall establish an Executive Committee which
shall be responsible for implementing the policies of the Council
and for planning and formulating new development policies for
approval by the Council. The Council shall appoint a Chief
Executive Officer to head the Executive Committee and may
appoint such other officers to perform such functions in relation to
the Executive Committee as the Council shall deem fit.
General Manager (8) ( a ) The Council shall appoint a General Manager who
shall be responsible for the day to day management of
the Exchange according to the policy set by the
Council.
( b ) The General Manager shall have such duties as are
assigned to him by this Statute or the Bye-laws and
shall act under the general direction of the Council.
Council member 
involved in matter 
under discussion
(9) Any member of the Council who is directly or indirectly
involved in any matter under discussion before the Council shall
withdraw from the sitting of the Council when such matter is being
discussed or decided upon and in such an event for all intents and
purposes the Council shall be constituted of all the other members.
Incumbency of 
decision about 
member’s 
involvement
(10) The determination as to whether a member of the Council
is directly or indirectly involved in any such manner, shall rest
exclusively with the other members of the Council to the exclusion
of such member.
                        FINANCIAL MARKETS ġ CAP. 345.        37
9. College of Stockbrokers
(1) ( a ) There shall be a College of Stockbrokers made up of
members of the Exchange, in accordance with
paragraph ( a ) of this subarticle, hereinafter referred to
as the ''College'' whose task it shall be:
(i) to tender advice to the Council on matters
affecting trading procedures;
(ii) to report to Council any matter of concern to the
members of the Exchange or incidental to the
proper functioning of the Exchange;
(iii) to examine any complaint and/or report received
from members of the Exchange, clients and/or
the Council of alleged misconduct or failure of a
member in maintaining the highest ethical
standards or of any alleged failure of a member
to comply with the Act, Statute and bye-laws;
(iv) to report to the Council on any findings
whatsoever and to make such recommendation
as the College may deem necessary.
( b ) In exercise of the task mentioned in paragraph
(1)( a )(iii), the College shall have all such powers,
including the power of holding meetings with any
complainant or any person lodging a report as
aforesaid, as may be necessary or expedient.
( c ) Each stockbroker which is admitted to membership of
the Exchange shall be a member of the College.
( d ) Each member of the College shall appoint an
individual to represent it on the College and attend any
meetings thereof.
( e ) The College shall elect from among the individuals
appointed to represent the members thereof, a
Chairman, a Deputy Chairman and a Secretary.
( f ) Each individual elected to hold office as Chairman,
Deputy Chairman, and Secretary shall hold Office for
a period of one year effective from the first day of
April but shall be eligible for re-appointment.
Vacancies in the 
College
(2) ( a ) The appointment of the individual appointed to
represent a member of the College shall cease in the
following cases:
(i) if he ceases to represent the member concerned,
for any reason whatsoever;
(ii) upon resignation notified in writing to the
Chairman of the College;
(iii) in the event that he is adjudged bankrupt or is
convicted of any crime involving public trust;
(iv) in the event that he has been interdicted or
incapacitated;
( b ) Where a vacancy occurs among the individuals
appointed to represent members of the College such
  38      CAP. 345. ħ                 FINANCIAL MARKETS
vacancy shall be filled by another representative of the
member that was previously represented by the
representative giving rise to the vacancy.
Meetings of the 
College
(3) ( a ) The College shall meet on such dates and at such
places as the College Chairman shall from time to time
determine so however that the College shall meet at
least once every calendar month.
( b ) Notice of the date, place and time of the College
meeting stating the business to be dealt with in the
meeting shall be given in writing by the College
Chairman to each member of the College.
( c ) In the event that the appointed representative is unable
to attend, the member shall have the right to be
represented at the meeting by an alternative
representative in lieu of the appointed representative.
( d ) No business shall be transacted at any meeting of the
College unless a quorum of members is present. The
quorum necessary for the transaction of business shall
be at least fifty per cent of the members entitled to
attend. If within thirty minutes after the time fixed for
the meeting the representatives present are not
sufficient to form a quorum, such meeting shall stand
adjourned to the same day in the next week, at the
same time and place, and a notice to this effect shall be
sent to all members.
( e ) If at the adjourned meeting a quorum is not present
within thirty minutes from the time fixed for the
meeting, the members present shall then form a
quorum.
( f ) Every member of the College shall have one vote.
( g ) All decisions of the College shall require the support
of a least sixty percent of the representatives present at
the meeting.
( h ) Special meetings of the College may be convened by
the College Chairman on the request by notice in
writing of not less than fifty per cent of the College
members and shall be held within one week of such
request. Notice of any such special meeting, stating the
objects thereof shall be given by the Chairman to each
representative at least seventy-two hours before the
date fixed for such meeting.
( i ) Any College member who is directly or indirectly
involved in any matter under discussion before the
College shall withdraw from the meeting when such
matter is being discussed or decided upon and in such
an event for all intents and purposes the meeting shall
be constituted of all the other members:
Provided that where the College is fulfilling the
task mentioned in article 9(1)( a )(iii) of the Statute it
shall afford an opportunity to the member concerned to
                        FINANCIAL MARKETS ġ CAP. 345.        39
present his case.
( j ) The College shall have the power, subject to the
provisions of this Statute, to fix its own meetings and
regulate its own proceedings.
10. Committees
(1) The Council may establish any committee or committees
which shall be responsible for performing such functions as the
Council may direct and for tendering advice to the Council on such
matters as may be determined by the Council.
(2) The Council shall appoint one of its members to head any
committee established herein and may appoint any person or
persons (whether or not a member of the Council or of the
Exchange) to sit on such committee.
(3) The Council may at any time dismiss or replace any
member sitting on any committee established herein or if it
considers it appropriate to dissolve any such committee altogether.
(4) Every such committee shall determine the frequency of its
meetings and shall regulate its own procedure.
11. Vacancies in the Council
Vacancies
following cases:
( a ) upon resignation notified in writing to the Minister;
( b ) if he ceases to be qualified to be appointed or
nominated as a member of the Council;
( c ) in the event that he is adjudged bankrupt or is
convicted of any crime involving public trust;
( d ) in the event that he has been interdicted or
incapacitated;
( e ) upon unjustified absence from meetings of the Council
on three consecutive occasions.
Personal interest
office by reason only of his being a member, director or officer of
any company which has entered into contracts with or done any
work for the Exchange, but a member of the Council shall disclose
any personal interest in any transaction or contract and may not
vote in respect of any such contract or work. A member of the
Council who acts in contravention of this paragraph shall be liable
to be removed by order of the Minister and shall be liable to
compensate the Exchange for any loss caused by him in
consequence of such act.
Removal
subarticle (1) the Council shall declare that the seat of the Council
member concerned has become vacant.
Other vacancies
Council, such vacancy shall be filled by the appointment of another
person by the Minister, in accordance with the provisions of article
8(3) of this Statute.
  40      CAP. 345. ħ                 FINANCIAL MARKETS
Voting (5) Every member of the Council shall at a Council meeting
have only one vote except for the Chairman, or the Deputy
Chairman in the absence of the Chairman, who shall have an
original and a casting vote. Decisions of the Council shall be taken
by a simple majority unless otherwise provided for in the Statute.
Remuneration (6) The Chairman and members of the Council shall be paid
such remuneration as may be approved by the Minister. The
remuneration of the Chief Executive and the General Manager shall
be decided by the Council.
Indemnity (7) Every member of the Council shall be indemnified by the
Exchange against all liabilities, costs, losses and expenses to which
such member of the Council may become liable in respect of any
matter or thing done in good faith by him in the execution of his
duties as a member of the Council:
Provided that no such member may accept liability without
the authority of the Council.
12. Council Meetings
Frequency (1) Meetings of the Council shall be held on such dates and at
such places as the Chairman of the Council shall from time to time
determine so however that the Council shall meet at least once
every calendar month.
Notice (2) Notice of the date, place and time of a Council meeting
stating the business to be dealt with in a meeting shall be given in
writing by the General Manager to each member of the Council.
Quorum (3) ( a ) No business shall be transacted at any meeting of the
Council unless a quorum of members is present. The
quorum necessary for the transaction of business shall
be three members qualified to vote.
( b ) If within thirty minutes after the time fixed for the
meeting the members present are not sufficient to form
a quorum, such meeting shall stand adjourned to the
same day in the next week, at the same time and place,
and a notice to this effect shall be sent to all the
members.
( c ) If at the adjourned meeting a quorum is not present
within thirty minutes from the time fixed for the
meeting, the members present shall then form a
quorum:
Provided, however, that a meeting with such
reduced quorum shall not have power to amend the
bye-laws.
Proceedings (4) The Council shall have the power, subject to the provisions
of this Statute, to fix its own meetings and regulate its own
proceedings.
13. Finance
Funds (1) The funds of the Exchange shall be held in such banks as
the Council shall from time to time determine. All cheques drawn
on account of the Exchange shall be signed by such person or
                        FINANCIAL MARKETS ġ CAP. 345.        41
persons as the Council may from time to time direct.
Income
solely towards the promotion of the objects and in the interest of
the Exchange as the Council may determine.
Proper books of 
accounts
(3) The Council shall cause proper books of accounts to be
kept with respect to:
( a ) all sums of money received and expended by the
Exchange and the matters in respect of which the
receipt and expenditure takes place;
( b ) all sales and purchases by the Exchange; and
( c ) the assets and liabilities of the Exchange.
True and fair view
fair view of the state of the Exchange's affairs and to explain its
transactions.
Place where 
accounts are kept
(5) The books of accounts shall be kept at the registered office
of the Exchange and shall always be open to inspection by the
members of the Council, and as the Council may from time to time
determine.
Appointment of 
auditors
(6) Auditors shall be appointed annually by the Council at a
fee to be agreed by the Council.
Compensation Fund
S.L. 370.09
The Compensation Fund and the Select Committee
established by Bye-laws in terms of this Schedule shall cease to be
in effect as from the date of the coming into force of these
regulations and the Compensation Fund shall as from such date
become absorbed as an integral part of the Investor Compensation
Scheme established under the Investor Compensation Scheme
Regulations, subject to the following provisions of this paragraph:
S.L. 370.09
(1) The Bye-laws as in force immediately before the coming
into force of these regulations, shall  mutatis mutandis  continue to
regulate any claim made by an investor in terms of Bye-law 7.03
with reference to events occurring prior to 3rd January, 2003 and
any reference to the Council shall be deemed to be a reference to
the Compensation Schemes Management Committee established
under the Investor Compensation Scheme Regulations.
(2) ( a )  The portion of the Compensation Fund comprising the
payments made by the Malta Stock Exchange in terms of Bye-law
7.12( b ) shall be transferred back to the Malta Stock Exchange:
Provided that the Malta Stock Exchange shall keep such
portion of the Compensation Fund separate and distinct from any
other funds or assets.
( b )  The Malta Stock Exchange shall provide an indemnity
in favour of the Investor Compensation Scheme, up to the amount
of funds kept separate and distinct in accordance with the proviso
to the immediately preceding subregulation and in proportion to the
percentage of the funds constituting the Compensation Fund that
have been transferred back to it, and it shall remain responsible in
accordance with the provisions of the first proviso to paragraph ( b )
  42      CAP. 345. ħ                 FINANCIAL MARKETS
of subregulation (3), up till 3rd January, 2008, for any claims that
may arise with reference to events occurring prior to 3rd January,
2003.
S.L. 370.09
(3) ( a )  The portion of the Compensation Fund that had been
paid by the members of the Malta Stock Exchange in terms of Bye-
law 7.12 ( a ) and any other remaining funds pertaining to the
Compensation Fund shall be transferred to the Investor
Compensation Scheme as established under the Investor
Compensation Scheme Regulations, and shall become an integral
part thereof:
Provided that a moratorium shall be allowed in favour of
members of the Malta Stock Exchange who had paid such portion
to the Compensation Fund as in force immediately before the
coming into force of these regulations, so that their respective
contributions to the Compensation Fund shall be set off against
contributions now due by them to the Investor Compensation
Scheme.
( b )  The Investor Compensation Scheme shall be
responsible for claims made against the Compensation Fund by
investors in terms of Bye-law 7.03 and arising out of or with
reference to events occurring prior to 3rd January, 2003:
Provided that claims accepted for settlement by the
Compensation Schemes Management Committee shall be settled
out of funds transferred from the Compensation Fund to the
Investor Compensation Scheme and the Malta Stock Exchange  pro
rata :
Provided further that the liability of the Investor
Compensation Scheme shall not exceed the amount of funds
transferred in accordance with the provisions of paragraph ( a ) of
subregulation (3) and the responsibility of the Investor
Compensation Scheme shall expire on 3rd January, 2008.
(4) Any reference in any law to the Compensation Fund
established by Bye-laws in terms of this Schedule, shall henceforth
be deemed to be a reference to the Investor Compensation Scheme.
