In the second part of the CP Sound Bites episode dedicated to capital Markets, Malcolm Falzon, Partner at Camilleri Preziosi, and Lorraine Vella, Head of Capital Markets at the Malta Financial Services Authority (MFSA) resume their discussion on the future of Malta’s capital markets.
Scale and liquidity are the key constraints, and an ageing retail investor base means younger investors are needed. Innovation in the launch of new products will be key in this regard.
At European level, the Capital Markets Union, launched in 2015, has struggled, as fragmentation follows without aligned economic policy. Its successor, the Savings and Investments Union, shares the same goal with a more tangible framing, while the Listing Act's simpler prospectus rules are vital for an SME-heavy market like Malta's. Looking outwards, the Malta Financial Services Advisory Council (MFSAC) is working on internationalisation, with a particular focus on institutional investors. In terms of industry sectors, Tech and Gaming are natural fit. Success requires a coordinated national strategy and an appetite for risk.
Data analytics is transforming supervision, and the European Single Access Point will bring issuers' regulated information into one EU repository. The Malta Stock Exchange (MSE) is upgrading its systems as changes in European regulation reflect shifting cyber risk, and changing priorities for investors. The MFSA is working with the MSE, the Central Bank and industry on T+1 readiness and has issued a discussion paper on tokenisation.
Sustainable finance is about integrating ESG principles in, amongst others, Capital Markets. Efforts are underway to render this segment more appealing, including through the preparation of an extensive regulatory framework, which would enable the issuance of sustainable finance products extending beyond green traditional bonds. Overall, the outlook is cautiously optimistic, with real potential for growth through collaboration among all stakeholders Listen to the full episode of CP Sound Bites now.
