Listing in Malta - Main Market vs Prospects MTF

A guide on two key Listing Markets when listing In Malta

Dr. Priscilla Mifsud Parker | 11 Apr 2018

Listing in Malta  Main Market vs Prospects MTF

Capital markets in Malta are increasingly experiencing growth as well as liquidity. Malta has proved to be successful in the various financial services sectors and is also committed to develop its capital markets. In this respect, in October 2016, the Malta Stock Exchange (MSE) launched the ‘National Capital Markets Strategic Plan’ with the aim to enhance the potential of the Maltese capital markets and increase Malta’s international profile as a proactive financial centre. The ‘National Capital Markets Strategic Plan’ included various proposals and initiatives as part of the MSE’s overall long-term strategy to develop a liquid and efficient securities market for the benefit of issuers as well as investors. Accordingly, in mid-January 2017, this strategic plan was officially launched by the MSE.

Malta’s Capital Markets

Malta currently has five regulated markets, namely: (i) the Main Market, which is targeted to issuers operating in compliance with all the listing requirements as laid down in Chapter 3 to the Listing Rules issued by the Listing Authority (LA); (ii) the Alternative Companies List, which was introduced for those issuers which do not fulfil all the requirements of the Main Market; (iii) the European Wholesale Securities Market, which market relates wholly to wholesale debt securities, and is a joint venture between the MSE and the Irish Stock Exchange; (iv) the Institutional Financial Securities Market, which was launched in October 2017 and is the first fully Maltese regulated wholesale securities market; and (v) Prospects MTF, which was launched in October 2016 and is a Multilateral Trading Facility (MTF) specifically targeted for smaller SMEs.

Main Market vs Prospects 

The process to admit financial instruments to the Main Market starts with a prospective issuer seeking admissibility to listing from the LA. On the other hand, the admission process on Prospects MTF is managed and regulated by the MSE and approval for admissibility to listing is obtained directly from the MSE’s listing committee. 

Prospects MTF targets security issues of less than €5 million in value and where the offer is not made to more than 150 natural or legal persons in any one Member State of the EU. On the other, anything else would need to be listed on the Main Market.

Prospectus vs Company Admission Document

When a company intends to be admitted on Prospects MTF that would trigger the obligation to draw up a Company Admission Document fully compliant with the Prospects MTF Rules which authorisation would fall under the remit of the MSE. On the other hand, offers to the public would result in the requirement to publish a Prospectus fully compliant with the EU Prospectus Directive and the Listing Rules, which authorisation would fall under the remit of the MFSA and not the MSE. 

Applications for Main Listing  require a Registration Document, a Securities Note and a Summary Note. On the other hand, the Prospects MTF Rules include an appendix which provides the building blocks of the Company Admission Document, which is similar to a Prospectus. 

Sponsor vs Corporate Advisor

Another major difference between the Main Market and Prospects MTF is that a company seeking to list securities on the Main Market is obliged to appoint a Sponsor in terms of Chapter 2 of the Listing Rules, while Prospects MTF Rules stipulate that an issuer needs to appoint a Corporate Advisor. 

The Sponsor has a key role in liaising between the applicant, its advisory team and the LA and must perform all its responsibilities in connection with the application process. In essence, a Sponsor must ensure that the company satisfies all conditions for listing; it must inform the company and its directors of the responsibilities attached to being a listed company; and it must ensure that all matters have been duly disclosed in the Prospectus or to the LA, as applicable. 

The role of the Corporate Advisor is to guide the applicant through the listing process as well as consistently ensure adherence to the company’s compliance obligations and continuing obligations as laid down in the Prospects MTF Rules. Consequently, the role of the Corporate Advisor is very onerous and includes drafting and submitting all required documents; carrying out the necessary due diligence on the applicant; assessing whether the applicant has adequate corporate governance in place; and assessing whether the financial sustainability forecasts are realistic, achievable and attainable. As opposed to the role of the Sponsor, the relationship between the applicant and the Corporate Advisor must be retained for both the admission process as well as for the duration of the security’s term. 

Capital Requirements

Another important requirement for a company seeking admissibility to listing of securities on the Main Market is that it must have a minimum paid-up share capital of €1 million in the case of equity listings and €250,000 in the case of debt listings. In case of admission of equity or debt securities to Prospects MTF a company must have a minimum paid-up share capital of €46,588. 

Shares in Public Hand 

In the case of companies listing equity securities on the Main Market, they must have at least 25% of the listed equity securities in public hands while in the case of equity securities admitted on Prospects MTF there is no minimum value of shares to be in public hands.

The Future of Capital Markets in Malta

As the Maltese financial markets are increasingly becoming remarkably sophisticated, a significant growth in size and liquidity may be noted in the jurisdiction’s capital markets. Despite its relatively small size, the MSE has proved to be a successful stakeholder in the capital markets value chain and has a sound reputation internationally for its high standard of operation and for providing effective facilities for the trading, settlement and registration of securities. 
Through the launch of the ‘National Capital Markets Strategic Plan’, the MSE has taken a structured approach geared towards modernising the Maltese capital markets to compete effectively with other European exchanges. In Malta the major players in the capital markets are highly encouraged to continue the positive trend initiated by the MSE. Thus, it is essential that all parties in the value chain are geared towards modernising the Maltese capital markets by being proactive in developing next generation technology such as blockchain technology. The major players in the Maltese capital markets can be part of the future as blockchain technology will positively change capital markets and the financial services industry as we know it today. Certainly, as with all economic and technological transformations, those participants that manage to adapt first are the ones that will find themselves at the centre of this emerging economic ecosystem. 
In conclusion, it is vital that there is a collective effort amongst the major participants of the Maltese capital markets through collaboration with regulators and amongst themselves to adopt blockchain technology in the industry. In the absence thereof, local market participants could be left lagging behind if, or rather when, these developments start to leave a real impact on the market place. 

How can Chetcuti Cauchi assist you in your capital markets and blockchain project?

As your corporate advisor we can provide a full range of services connected with the MSE’s listing, as well as assistance with all taxation and legal requirements. We are highly experienced in the field of raising finance, with a deep involvement and understanding of the local market. Furthermore, should you wish to discuss the possibility of setting up your blockchain-based business, we encourage you to get in touch with our financial services specialists at Chetcuti Cauchi on 

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