September 27, 2017

Malta exchange approved to list insurance-linked securities

The Malta Stock Exchange has been approved by its regulators to launch an Institutional Financial Securities Market (IFSM), which would enable any insurance-linked securities (ILS) issued in the country to be listed in Malta.

The IFSM will be open to issuers of securities which fall under Malta’s Wholesale Securities Market rules, the purchase of which is only open to institutional investors.

Listed securities would have a minimum denomination of €100,000 and can include instruments such as asset-backed debt, convertible debt securities, derivatives and insurance or reinsurance linked securities.

The IFSM will be regulated by the Malta Financial Services Authority. Any interested securities ssuers would have to apply to the Listing Authority for approval. This IFSM is an EU regulated Market, so benefiting from both HMRC recognition and enjoying withholding tax exemptions.

This all puts Malta onto a level playing field as far as attracting securities listings and further advances its ability to offer another domicile choice to the ILS and reinsurance linked investments market.

Malta already has a reinsurance special purpose vehicle available for use, but at this time only one vehicle has been set up as far as we’re aware, the USA Risk operated Exchange Re RSPV vehicle, and it’s unknown whether it has been active in collateralised reinsurance yet.

Chairman of the Malta Stock Exchange Joseph Portelli, commented that he, “Believes that this market not only complements the other markets operated by the Exchange but also creates new opportunities for the institutional players, issuers and stakeholders who all have an interest in seeing this exciting market develop and grow both locally and internationally. We look forward to the official launch of the IFSM in October 2017.”

The range of domiciles offering issuance and listing services to ILS market participants continues to expand, although it is proving difficult for new entrants to attract business in any volume so far.

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